​When a non-resident sells immovable property in India, the buyer is required to deduct tax at source (TDS) under ​​​​Section 195 of the Income Tax Act. The applicable TDS rates are as follows:

If the property is held by the non-resident for more than 24 months, the gain on sale of such property would be treated as long-term capital gains. The tax shall be deducted from the gains at the following rate under Section 195 of the Income-tax Act:

• 20% if the transfer took place before 23-07-2024; 
• 12.5% if the transfer took place on or after 23-07-2024.

 

If the property is held by the non-resident for 24 months or less, the gain on the sale of such property would be treated as short-term capital gains. The tax shall be deducted from such gains at the following rate under Section 195:

• 30% if the non-resident is an individual/firm; 
• 35% if the non-resident is a foreign company.

Notes:

1. TDS rate shall be further increased by applicable surcharge and Health and Education cess.
2. For non-residents, the final TDS rate is determined by analyzing the provisions of the DTAA. In most DTAAs India has signed, the country where the property is located has the right to tax the income according to domestic laws. Therefore, the TDS rate on the sale of immovable property by the non-resident shall be the TDS rate specified under the Income-tax Act.