EaseValueBuying a house is the one transaction where an ordinary individual is made a tax collector. The obligation to withhold tax out of the price sits on the buyer, not on the seller, and so does the liability if it is not done. Where the seller is a resident the job is simple: deduct 1% of the higher of the agreement value and the stamp duty value once the price reaches the threshold, pay it with a single challan-cum-statement quoting both PANs, and no TAN is needed. Where the seller is a non-resident, almost nothing about that description survives. The deduction moves to Section 393 of the Income-tax Act, 2025 (old Section 195); the rate is 12.5% for a long-term holding or the slab rate for a short-term one rather than 1%; surcharge and cess are added on top; there is no threshold at all, so even a small flat is covered; you must obtain a TAN before you pay the first rupee; and the simple challan-cum-statement route is closed to you. A buyer who treats a non-resident seller as a resident under-deducts by an order of magnitude, and the department recovers that shortfall, with interest and a late-filing fee, from the buyer — long after the seller has taken the money abroad. This calculator runs both paths on your numbers, handles deeds where only some of the co-owners are non-resident, and puts a rupee figure on what the mistake costs.
How it’s calculated
- Start with the only question that really matters: is any seller a non-resident? Judge it on tax residence for the year of sale, not on citizenship, not on the passport at the registration desk, and not on where the money is being sent.
- Enter the sale consideration for the property as a whole — the full agreement value, not your share of it and not the instalment you happen to be paying today.
- Enter the stamp duty value if the circle rate is higher than your price. On a purchase from a resident seller, TDS runs on the higher of the two, so a circle rate above your price increases the deduction even though no extra money changes hands.
- Enter the number of sellers named on the deed, and then how many of those are non-resident. Each seller's share follows that seller's own status, so a deed with one resident and one NRI co-owner is two transactions run side by side, not one.
- Enter the number of buyers. This shows your personal share of the price and of the tax, but it does not divide the threshold — that test is applied to the property as a whole.
- Set the holding period. It only matters where a seller is an NRI, because it decides whether the withholding runs at the long-term rate under Section 198 (old Section 112) or at the short-term slab rate. Ask for the seller's purchase deed and keep a copy.
- Confirm whether you hold a valid PAN for every seller. Without one, the rate on a resident seller's share rises sharply, and on a non-resident seller a missing PAN can push the deduction higher still while leaving the seller unable to claim credit for tax you have genuinely paid.
- The rate for a resident seller is pre-filled at 1% — the levy formerly at Section 194-IA — and the threshold at ₹50,00,000. Both are editable so you can test a different assumption rather than take a hard-coded figure on trust.
- Read the threshold row. On a resident deed it tells you whether you are over the line and by how much. On an NRI deed it tells you the threshold does not exist, which is the single most expensive thing most buyers do not know.
- Read the two TDS rows separately. The resident row is a flat percentage with no surcharge and no cess. The NRI row is the base rate plus surcharge, capped at 15% because the higher surcharge rungs do not reach capital gains, plus 4% health and education cess on the whole thing.
- Read the exposure row, which is the reason this calculator exists. It is the shortfall you would create by treating a non-resident seller as a resident, plus interest for every month you are late in deducting or depositing, plus the late-filing fee on the statement.
- Set the delay in months to test what a mistake costs if it surfaces at assessment rather than at registration. The interest rate and the daily fee are inputs, with 1% a month and ₹200 a day as defaults, so you can stress-test your own position.
- Read both warning boxes. The first tells you what to do on your figures. The second covers whichever trap your inputs have triggered — the mixed-ownership deed, the surcharge split across co-owners, the missing PAN, the stamp duty value or the instalment timing.
The buyer is the one who pays for the seller's status
Almost every other tax obligation in a property deal belongs to the seller. The capital gain is theirs, the exemptions are theirs, the return is theirs. Withholding is the exception, and it is an exception with teeth. The statute makes the payer responsible for deducting tax out of the payment and depositing it, and where the payer fails to do so the payer is treated as being in default for the amount. That means the buyer. Not the buyer's lawyer, not the broker, not the registrar, and not the seller who assured everybody that everything was in order.
The practical shape of that risk is worth stating plainly, because it is unlike most tax risks a private individual runs. If you under-deduct, the department can recover the shortfall from you, with interest running from the date the tax was deductible rather than from the date anybody noticed. You will also face a fee for filing the statement late, running per day until it is filed. You may then try to recover the money from the seller. Whether you succeed depends entirely on whether they still want something from you, and by the time the notice arrives — typically well after the assessment year has closed — they usually do not.
That asymmetry is at its sharpest with a non-resident seller, for the obvious reason: they have left. A resident seller who has under-collected can, in practice, often be found and reasoned with, and in many cases they have already offered the gain in their own return, which limits the recovery to interest. A non-resident seller who has taken their proceeds out of the country under a remittance certificate is a different proposition. The department is not obliged to chase them before coming to you, and it does not.
The correct mental model is therefore not "how much tax does the seller owe" but "what am I required to withhold, and can I prove I did it". You are not being asked to compute the seller's tax. You are being asked to apply a rule to a payment. The rule is mechanical, and where the seller is a resident it is genuinely easy. The whole of the difficulty, and effectively all of the money at risk, sits in one factual question that has to be answered before the first payment leaves your account.
The two paths, side by side
On a purchase from a resident seller, the deduction is the 1% levy on transfers of immovable property — the provision formerly numbered Section 194-IA. It applies where the consideration or the stamp duty value reaches ₹50,00,000, and it is computed on the higher of those two figures. No surcharge is added. No cess is added. You do not need a TAN. The tax is deposited using a combined challan-cum-statement that quotes your PAN and the seller's, filed online within the prescribed period after the end of the month of payment, and you then issue the seller a certificate for the deduction. For a straightforward flat purchase this is an evening's work.
On a purchase from a non-resident seller, every one of those statements changes. The deduction falls under Section 393 of the Income-tax Act, 2025, the successor to old Section 195, which covers any sum chargeable to tax paid to a non-resident. The rate is not 1%. For a property held more than 24 months the long-term rate under Section 198 (old Section 112) is 12.5%; for a shorter holding the gain is short-term and taxed at slab rates, for which 30% is the indicative top figure. On top of the base rate comes surcharge — 10% where the amount exceeds ₹50 lakh and 15% where it exceeds ₹1 crore — and 4% health and education cess on the total. There is no threshold: a ₹30 lakh flat bought from an NRI attracts withholding where the identical flat bought from a resident attracts none.
The compliance path diverges just as sharply. You must obtain a TAN before making the payment, because the combined challan-cum-statement route is not available for payments to non-residents. The tax is deposited against that TAN, and you then file the quarterly return for non-resident deductions and issue the seller the corresponding certificate. None of this is difficult, but all of it takes time, and a buyer who discovers the requirement on the morning of registration is in an unpleasant position: pay without deducting and take the exposure, or delay the deed.
Put the two together on a real number and the gap is not marginal. A ₹1 crore purchase from a resident seller carries ₹1,00,000 of withholding. The same ₹1 crore purchase from a non-resident seller holding long-term carries ₹14,30,000 — twelve and a half lakh of base tax, ten percent surcharge, four percent cess. The difference of ₹13,30,000 is what a buyer who classified the seller wrongly has failed to withhold, and it is the amount that comes back to them, with interest, if the seller does not settle it themselves. Where the holding is short-term the arithmetic is harsher still: an ₹80 lakh purchase attracts ₹27,45,600 of withholding, more than a third of the price.
Establishing the seller's status — and what does not count as evidence
Because the entire exposure turns on one fact, it deserves more care than it usually gets. Residential status for tax is a question of physical presence in India during the relevant year and the years preceding it, tested against day-count rules. It is not a question of citizenship. An Indian citizen who has lived in Dubai for six years is a non-resident. A foreign citizen who has been working in Bengaluru for three years is very likely a resident. Both of them can own a flat in India and both of them can sell it to you.
Several things that buyers routinely rely on are not evidence of residence. An Indian passport is not. An Aadhaar number is not. An Indian address on the sale deed is not, and neither is an address in the seller's PAN record, which may be a decade old. A resident savings bank account is not, because a non-resident may still hold NRO accounts and may not have redesignated an old account as they were required to. Assurance from the broker is not evidence of anything at all. The one thing all of these have in common is that they are exactly what a seller who does not want a 14% deduction will point to.
What you should take instead is a written declaration of residential status from the seller for the year of sale, supported by whatever is available — passport pages showing entry and exit dates, a tax residency certificate for the other country, or their recent Indian returns showing the status claimed. A declaration does not transfer your liability. Nothing does. But it establishes that you enquired, it gives you a claim against the seller if it turns out to be false, and in practice it makes a seller who is quietly non-resident far more likely to say so before the deed is signed rather than after.
One further point of timing. Status is tested for the financial year in which the transfer takes place, not for the year the seller bought the property or the year they left India. A seller who emigrated eight months ago may or may not be non-resident for the current year depending on how many days they spent in India before leaving. Where the answer is close to a line, this is a question for a professional before completion rather than a judgement to make across a table at the registrar's office. The cost of the advice is trivial against the exposure.
The threshold, the stamp duty value, and the co-ownership traps
On the resident path the ₹50,00,000 threshold is tested on the value of the whole property, and that single sentence disposes of the most popular piece of bad advice in Indian property transactions. Splitting the deed between two buyers so that each pays ₹40 lakh of an ₹80 lakh price does not take the transaction under the threshold; the threshold looks at the property, so the deal is covered and each buyer deducts on their own share. The same is true of multiple sellers. A ₹90 lakh flat owned by three co-owners is not three ₹30 lakh transactions outside the net. It is one covered transaction on which each seller's share is deducted separately and deposited against that seller's own PAN.
The second trap on the resident path is the stamp duty value. TDS runs on the higher of the agreement value and the stamp duty value, so where the circle rate exceeds your negotiated price, the deduction goes up although the money you pay does not. On a ₹80 lakh purchase where the ready-reckoner value is ₹86 lakh, you deduct ₹86,000 rather than ₹80,000 and hand the seller ₹6,000 less than they expected. That is a small number in itself, but the same gap has a longer life elsewhere: a price significantly below circle rate has consequences in the seller's capital gains computation and can be treated as income in the buyer's hands where the difference is large. A price meaningfully below the stamp duty value is a conversation to have before signing, not after.
The trap that costs the most money is the mixed-ownership deed. Property in India is very often held jointly by a couple, and it is extremely common for one of them to have emigrated while the other has not. The buyer looks at the property, sees a familiar family, and applies one rule to the whole price. The statute looks at each name on the deed. If one of two equal co-owners is non-resident, you run the 1% route on half the value and the full Section 393 route — TAN, deposit, quarterly return and all — on the other half. On a ₹2 crore purchase that is ₹1,00,000 on one side and ₹14,30,000 on the other, and a buyer who missed it has under-deducted by more than thirteen lakh on a deed that looked entirely ordinary.
Co-ownership also produces one effect that runs in the buyer's favour and is worth knowing because it looks like an error when you first see it. Surcharge is tested on the amount payable to each non-resident seller, not on the price. A ₹2 crore property sold by a single NRI attracts 15% surcharge; the same ₹2 crore sold by two NRI co-owners in equal shares gives each of them ₹1 crore, which attracts 10%. The withholding falls from ₹29,90,000 to ₹28,60,000. Nothing has been avoided — the sellers' actual liability is computed on their own returns — but the amount you are required to withhold genuinely differs, and the calculator flags the difference so it does not look like a mistake in your working.
Doing it properly on the non-resident path
If a seller is non-resident, the sequence matters as much as the arithmetic, because most of the failures are failures of order rather than of computation. Apply for a TAN first. It is a straightforward online application, and until you have it you cannot deposit tax against a payment to a non-resident at all. Where two people are buying jointly, each buyer who makes a payment needs their own. Do this at the point the deal is agreed, not the week of registration, because the deed cannot sensibly be executed until it is in place.
Deduct when you pay, on every payment, and not at the end. Where the price is being paid in tranches — a booking amount, a bank disbursement, a final payment at registration — the obligation attaches to each of them as it is made. Buyers who plan to net the whole deduction off the final payment discover two problems at once: the seller declines to absorb the entire amount at the last moment, and interest has been running since the first tranche. Both are avoidable by deducting from the first rupee.
Deposit within the prescribed period after the month of payment, then file the quarterly statement for deductions from non-residents and issue the seller their certificate. The certificate matters more than buyers realise. It is what lets the seller claim credit for the tax and, in due course, claim the refund of any excess. A seller who cannot get credit for tax that you did in fact pay will come back to you, and the resulting dispute is expensive out of all proportion to the paperwork that would have prevented it.
Two further practical points. First, do not accept a lower deduction on the strength of anything except a certificate under Section 395 (old Section 197) issued to the seller and produced to you. A seller's computation showing a small gain, an accountant's letter, a valuation, a promise that the certificate is coming next week — none of these protect you. If the certificate has not been issued, withhold at the full rate; the seller can still recover the excess by filing a return. Second, the remittance of sale proceeds abroad has its own banking requirements which the seller must satisfy, and the tax paperwork you generate is what the seller's bank will want to see. Doing it properly is not merely defensive. It is what allows the deal to close.
What it costs when it goes wrong, and how it usually surfaces
The exposure is not merely the tax you failed to withhold, and this is where buyers underestimate it. Start with the shortfall itself, which on a ₹1.5 crore long-term purchase from an NRI treated as a resident is ₹20,92,500 — the ₹22,42,500 that should have been withheld against the ₹1,50,000 that was. Add interest, charged for every month or part of a month from the date the tax was deductible, which at 1% for six months is ₹1,25,550. Add the fee for filing the statement late, running per day until it is filed and capped at the amount of the TDS. On these figures the total is ₹22,54,050, against a purchase where the buyer believed their entire tax obligation was ₹1,50,000.
It surfaces in a way that gives the buyer very little room. Property registrations are reported to the department, and a transaction of any size will appear in the buyer's annual information statement and the seller's alike. Where a large payment has gone to a person the department knows to be non-resident, with no corresponding deduction under the non-resident provisions, it is a visible mismatch. The notice, when it comes, arrives after the assessment year has closed and often a good deal later, which is precisely when the seller is least reachable and least motivated.
There is a real defence, and it is worth knowing that it exists, but it is narrower than buyers hope. Where the recipient has themselves offered the income and paid the tax on it, the payer is generally not required to pay the same tax a second time. That does not extinguish the interest, and it does not extinguish the fee, and — crucially — it depends on the seller having filed and paid, and on your being able to obtain proof of it from a person who has no obligation to help you. It is a fallback, not a plan.
Set against that, the cost of getting it right is a TAN application, a slightly longer completion timetable and a professional fee that on any transaction of this size is a rounding error. If there is one thing to take from this calculator it is the order of operations: establish the residential status of every seller in writing before you pay anything, and let that answer determine the rate, the base, the registration you need and the returns you file. Everything else is arithmetic. If a seller is reluctant to state their status plainly, treat that reluctance as information, and take advice before completion rather than after.
Frequently asked questions
Who has to deduct TDS when a property is bought — the buyer or the seller?
The buyer. The obligation to withhold tax out of the payment and deposit it sits on the person making the payment, and so does the liability if it is not done. If you under-deduct, the department recovers the shortfall from you, with interest running from the date the tax was deductible and a fee for filing the statement late. You may then try to recover it from the seller, which works only if the seller still needs something from you — and by the time the notice arrives, usually years later, they do not.
What TDS applies when I buy from a resident seller?
One per cent of the higher of the agreement value and the stamp duty value, once the property reaches the ₹50,00,000 threshold. This is the levy formerly at Section 194-IA. No surcharge and no cess are added, and you do not need a TAN — the tax is paid with a single challan-cum-statement online quoting your PAN and the seller's, within the prescribed period after the end of the month of payment. You then issue the seller a certificate for the deduction.
What changes if the seller is an NRI?
Almost everything. The deduction moves to Section 393 of the Income-tax Act, 2025, the old Section 195. The rate is 12.5% for a long-term holding under Section 198, or the slab rate for a short-term one, rather than 1%. Surcharge of 10% above ₹50 lakh or 15% above ₹1 crore is added, plus 4% health and education cess. There is no threshold at all. You must obtain a TAN before paying, and the simple challan-cum-statement route is closed to you — the deposit goes against your TAN and a quarterly return follows.
Is there a minimum value below which no TDS applies on an NRI sale?
No. The ₹50,00,000 threshold belongs to the resident route only. A ₹30 lakh flat bought from a non-resident seller attracts withholding of ₹3,90,000 on these rates, where the identical flat bought from a resident would attract nothing at all. This is the single most expensive gap in most buyers' understanding, because the deal feels far too small to involve anything complicated.
How do I establish whether the seller is a resident?
Residential status turns on physical presence in India during the year of sale, tested against day-count rules. It is not citizenship. An Indian passport, an Aadhaar number, an Indian address on the deed or in the PAN record, and a resident-looking bank account are none of them evidence of residence — they are exactly what a seller who does not want a 14% deduction will point to. Take a written declaration for the year of sale supported by passport entry and exit pages or a tax residency certificate. It does not transfer your liability, but it establishes that you enquired.
We are two buyers and the price is ₹80 lakh, so is each half under the threshold?
No. The threshold is tested on the value of the whole property, not on each buyer's share, so splitting the deed does not take the deal out of the net. The same applies to co-owning sellers: a ₹90 lakh flat with three sellers is one covered transaction, and each seller's share is deducted and deposited separately against that seller's own PAN. Depositing one combined amount against one PAN is the most common filing error on co-owned property.
One of the two joint sellers is an NRI and the other is resident. What do I do?
You run both routes at once, because each seller's share follows that seller's own status. On equal shares of a ₹2 crore property you deduct 1% on ₹1 crore for the resident seller and the full Section 393 amount on the other ₹1 crore, with a TAN, a separate deposit and a separate quarterly return for the second. Mixed-ownership deeds — very often a resident spouse and an emigrated one — are where this is missed most often, because the buyer looks at the property rather than at each name on it.
The seller says they have applied for a lower-TDS certificate. Can I deduct less?
Not until the certificate has actually been issued under Section 395 (old Section 197, Form 13, now Form 128) and produced to you. An application, a computation showing a small gain, an accountant's letter or a promise that it is coming next week protect you from nothing — if the certificate is not in your hands, withhold at the full rate. The seller loses nothing permanent by that: they recover any excess by filing a return. You, by contrast, lose the entire shortfall plus interest if you deduct on a promise that never materialises.
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