Explanation
Section 195 of IT Act 1961 (§395 in IT Act 2025) is the applicable TDS section when an NRI sells property in India. Critical differences from §194IA: (1) No ₹50 lakh threshold — TDS applies from rupee one. (2) TDS is on the ENTIRE sale consideration (not just the profit). (3) Rate is based on long-term/short-term capital gains rates + surcharge + cess (can be 20–33%+). (4) Buyer MUST have TAN. (5) Form 27Q (Form 143 under IT Act 2025) must be filed. The NRI seller can apply for a lower TDS certificate under §197 if actual gains are lower than the sale price. From 1 October 2026, PAN-based payment is an alternative for the buyer. Verify on the income-tax portal before filing.