Bought property from an NRI and missed a step: how to fix each one

Every TDS gap can still be fixed by depositing the shortfall; what it costs depends on which step you missed, and interest runs every month.

The penalty and the seller-paid relief are on the no TDS deducted page. The lower-deduction certificate is Form 128, formerly Form 13 (Section 395 of the 2025 Act, formerly Section 197).

If you deducted tax but never deposited it, deposit it today; a late statement or a missing Form 131 costs far less.

The late fee is capped at the tax (Section 234E of the 1961 Act, Section 427 of the 2025 Act). The Rs 10,000 to Rs 1 lakh penalty (Section 271H of the 1961 Act) is avoided if tax, fee and interest are paid and the statement filed within one month of its due date, or if you show reasonable cause. The statement is Form 144, or Form 27Q for payments up to 31 March 2026, due 31 July, 31 October, 31 January and 31 May. From 1 October 2026 a resident individual or HUF instead pays within 30 days of the month-end on Form 141, Schedule E, and gives the seller Form 132.

If you deducted 1% because the seller said they were resident, and they were an NRI for that financial year, the shortfall is yours, whatever their declaration said. The fix is on the 1% instead of the NRI rate page, and whether the declaration saves you the penalty is on the no TDS deducted page. Status turns on days in India in the year of sale, so ask for the day count, not just a declaration.

If you deducted the non-resident rate on the full price and the seller was resident, you deducted more, not less. The seller claims the excess in their return. An RNOR (resident but not ordinarily resident) counts as resident, so the 1% route was right for them where the price or stamp value was Rs 50 lakh or more.

Paying abroad or in cash does not remove the TDS: every part of the price still needs its deduction.

A payment to a person resident outside India is barred except as permitted (Section 3(b) of FEMA); where regularising is needed, the route is usually RBI compounding. The seller's penalty is for accepting Rs 20,000 or more in cash for property: see the cash limits page. The stamp-value gap is your income where stamp value exceeds the price by more than the higher of Rs 50,000 and 10% of the price (Section 56(2)(x) of the 1961 Act); an updated return can be filed within 48 months of the end of the assessment year, with additional tax.

Signing gaps add no interest, but they get harder once the seller or an heir stops answering. No fixed deadline applies to a confirming deed, but act while that person can still sign; stamping has its own window, below. Your advocate drafts each fix and confirms it works in your state.

The central law gives three months from the document's first arrival in India to stamp it without penalty, and caps a later penalty at ten times the duty (Indian Stamp Act, Sections 18 and 40). A buyer who did not know of a revocation may be protected (Indian Contract Act, Section 208), but do not rely on it. While the seller is alive, confirmation rests on their power to ratify an act done without authority (Indian Contract Act, Section 196). If an heir refuses, it becomes a civil dispute. See the POA sale guide, stamping rules and heirs abroad.

Record gaps do not grow with interest, and most are fixed with your registered deed.

The seller's duty to clear encumbrances is in Section 55 of the Transfer of Property Act; if they will not, it is a claim against them. The pending-suit rule is Section 52. A mutation entry is for tax purposes only and does not decide ownership, as the Supreme Court held in Jitendra Singh v State of Madhya Pradesh (2021); your registered deed does. Until mutation is done, tax bills keep going to the seller. The wrongful mutation page covers an entry made in someone else's name.

Suresh bought Anita's Chennai flat for Rs 90 lakh; Anita is an NRI in Dubai who owned it since 2012. On 10 February 2026 he deducted 14.3% (12.5%, plus 10% surcharge, plus 4% cess): Rs 12,87,000. He deposited it only on 20 September 2026 and filed the January to March statement, due 31 May 2026, on 30 September.

The tax itself was right. The delay alone cost Rs 1,78,840 before any penalty: the late deposit and late statement, not the rate, were the steps he missed.