TDS on payment to NRI

[Asked by Guest]

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

TDS on payments to non-residents: buyer must deduct tax on capital gains; comply with Form 15CA/15CB or obtain AO certificate.
A buyer paying a non-resident for Indian immovable property must withhold tax on the seller's capital gain unless the payee obtains an assessing officer certificate; the payer may rely on a Chartered Accountant's computations, apply to the assessing officer to determine the taxable proportion, or require Form 15CB/Form 15CA compliance for remittance and repatriation, with PAN and bank/RBI procedural requirements affecting withholding and fund transfer.