Tax implications for NRI buying property in India

If you are planning to buy a flat from an NRI, you must understand the NRI Property Tax implications in India and possible deductions on such properties while purchasing it. In case you purchase property from Non-Resident, as per the section 195, 20% of TDS deductions is applicable.

Key Points of Tax implications for NRI buying property in India

Know the status of seller whether he/she is a tax resident or not, To do so check out his/her passport details or I-T returns to determine stayed numbers of days in India during that period of owning the property asset.
If the seller has given property to power of attorney(POA), he/she is Non-Resident Indian.
An individual must have TAN(Tax Collection and Deduction Account Number) otherwise there would be a penalty on buyer if he/she apply for deductions without it.
Taxability differ from person to person so check out people status i.e resident, non-resident, resident not ordinary resident(RNOR). NRI Taxation policies will be different from that of resident tax.
In other words a resident will pay the tax on both income either it's earned from India or abroad.
Non-resident or RNOR Indian will exempt from such tax in India on an income earned in abroad country.
If case of double taxation, they can follow Double Taxation Avoidance Agreement scheme between two countries if same income is taxed in both countries.

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