Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The buyer's checklist
Unlike a 1% deduction from a resident, buying from an NRI puts the buyer under Section 195, which needs more setup. The buyer must obtain a TAN (Tax Deduction Account Number), have your PAN, deduct at the correct rate before paying, and deposit the tax by challan by the 7th of the next month.
The returns and certificate
After depositing, the buyer files a quarterly Form 27Q (the TDS return for payments to non-residents) and issues you a Form 16A as proof. Only once Form 27Q is filed does the TDS show in your Form 26AS / AIS — which you need to claim any refund. A buyer who skips this leaves your credit missing.
Make it easy — an example
Example: you obtain a Section 197 certificate fixing TDS at, say, ₹3 lakh. You hand the buyer the certificate, your PAN, and a short note on the steps. The buyer applies for a TAN, deducts ₹3 lakh, deposits it, files Form 27Q and gives you Form 16A — clean for both sides. Because most resident buyers have never done this, walking them through it (or having a CA do it) avoids a stuck registration. Our NRI property service manages the deduction for buyer and seller.