Your early 20s are a time for growth. New friends, new jobs, new towns. But with so many firsts, mistakes are only natural. Financial mistakes, however, can be costly. Chartered accountant and tax consultant Yash Shah is here to help you.
If you are buying a house from an NRI, the most important provision to keep in mind is the TDS to be deducted from the payments made to the NRI. Normally any property purchased from a resident in excess of 50 lakhs is subject to TDS 1%.
However, if the same property is purchased from a Non-Resident, the TDS to be deducted is in the range of 20% to 28% depending on the price of the property and depending on the holding period of the seller. This is because the seller NRI is staying abroad so they want to protect tax revenues.
Hence, such a high TDS normally results in a deal-breaker as well, as NRIs are apprehensive of getting so many amounts deducted that are directly being paid to the government as their taxes deducted. Hence, please be extremely careful of getting in touch with your chartered accountant to know the exact rate of TDS. There are certain ways to bring this tax rate down for the NRIs by applying to the tax department for a lower rate.
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