TDS on Sale of Property other than Agricultural Land by Resident or Non-Resident (Section 194IA and Section 195 of the Income-tax Act 1961)

Section 194IA – TDS on Sale of Any Property by Resident -

1.    Immovable property means any land (other than agricultural land) or any building or part of a building.

2.    Any person, being Resident and a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property, shall, at the time of credit of such sum to the account of the transferor or at the time of payment shall deduct an amount equal to one per cent (1%) of such sum as income-tax thereon. (TDS shall be deducted irrespective of a capital gain on sale of the property and deducted TDS on sale consideration, not on capital gain)

3.    No deduction under section 194IA(1) of the Income-tax Act, shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees.

4.    The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

5.    TAN is not required for buyer.

Section 195 – TDS on Sale of Any Property by Non-Resident –

1.    Immovable property means any land (other than agricultural land) or any building or part of a building.

2.    Any person, being Non-Resident and a transferee, responsible for paying (referred to section 195) to a non-resident transferor any sum by way of consideration for transfer of any immovable property, shall, at the time of credit of such sum to the account of the transferor or at the time of payment shall, deduct an amount equal to twenty per cent (20%) of such sum as income-tax thereon. (TDS shall be deducted irrespective of capital gain on sale of property and TDS shall be deducted on capital gain amount)

3.    No deduction under section 195 of the Income-tax Act, shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees.

4.    The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

5.    TDS amount is computed by jurisdiction assessing officer.

6.    TAN is not required for buyer.

Particulars / Sales Consideration	Less than Rs. 50 Lakhs	Rs. 50 Lakhs to 1 Crores	More than Rs. 1 Crores
Long Term Capital Gain	20%	20%	20%
Add : Surcharge	Nil	10%	15%
Total Tax Rate	20%	22%	23%
Add : SHE Cess	4%	4%	4%
Effective TDS Rate	20.80%	22.88%	23.92%

Note : 20% rates applied on long term capital, otherwise apply the applicable rate on short term capital gain, (TDS calculated as per Income-tax slab rate as applicable to NRI).