TDS on payment to NRI

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I am buying a flat from an NRI residing in the Middle East. For this, I will be making payments using rupee DD / rupee cheques which the NRI will be depositing in their NRE or NRO account in Mumbai. Some other facts. I am an individual. Flat is in Mumbai. NRI bought this flat in 2006.

Q1 : Is there a TDS liability for me as a buyer? Even though the amount is not being remitted abroad but being deposited in an NRE or NRO account in Mumbai.

Q2: If there is a TDS liability, how do I determine the TDS amount? Is it a flat 20.6% of the total consideration? Or only the capital gain tax liability of the seller? The sellers CA has given me a certificate on his letter head computing the capital gains liability, but is not in the format ofForm 15CB. He says that as the payment is being made to NRE / NRO account in India, there is no requirement of complying with the requirement of Form 15CB and Form 15CA (for online payment of TDS).

Clarifications on the above will be much appreciated and welcome.

AI Summary

Buyer Must Deduct TDS on NRI Flat Purchase Under Section 195; Obtain Form 15CB, Consider Form 15CA Requirements An individual is purchasing a flat in Mumbai from a non-resident Indian (NRI) and queries about the tax deduction at source (TDS) liability under Section 195 of the Income Tax Act. The buyer is advised that TDS must be deducted on the capital gains amount, typically at 20.6%. The discussion covers the necessity of obtaining Form 15CB from a Chartered Accountant and whether Form 15CA is required. Various legal interpretations and procedures are discussed, including the need for a Permanent Account Number (PAN) for NRIs and the implications of not complying with TDS provisions.