Before the token: is the seller really an NRI, and at what rate?
If the seller is non-resident for the year you pay, every payment carries a deduction at the non-resident rate, so confirm status and PAN before the token.
| Check | Why it matters | Who does it |
|---|---|---|
| Seller's residential status for the financial year of payment (Section 6) | An NRI seller means tax on every payment at the non-resident rate, with no Rs 50 lakh threshold (Section 393(2), formerly 195). A resident, including an RNOR, means 1% where the price or stamp value is Rs 50 lakh or more (Section 393(1), formerly 194-IA) | You, from a written declaration plus passport or visa evidence |
| PAN, and that it is operative | No PAN, or an inoperative one, raises the rate to at least 20% (Section 397(2), formerly 206AA). A seller with no PAN escapes that only by giving name, email, phone, foreign address, tax residency certificate and foreign tax number (Rule 217, formerly 37BC) | You, on the e-filing portal's Verify PAN status |
| Date the seller acquired it | Held 24 months or less is short-term, which means a higher deduction rate | Your CA, from the seller's purchase deed |
| Lower-deduction certificate | The usual way to deduct less (Form 128, formerly Form 13; Section 395, formerly Section 197) | The seller applies; you check it |
If the seller says they are resident so you can deduct 1%, and they are not, the shortfall is yours. A declaration helps your file; it does not move the liability.
Before the agreement: the title documents to check
Your advocate should check these eight records before you sign the agreement; your lender will ask for most of them too.
| Document | What it proves |
|---|---|
| Every registered deed back through the chain of title | Each owner had the right to sell to the next |
| Encumbrance certificate from the sub-registrar | No registered mortgage, charge or other sale |
| Mutation or khata extract in the seller's name | The municipal or revenue record matches the deed |
| Society NOC and share certificate (flat in a society) | The society accepts the transfer and the seller holds the shares |
| Property tax, maintenance and utility receipts | No dues pass to you |
| RERA registration, occupancy and completion certificates (newer buildings) | The building is approved and lawfully occupied |
| Court and revenue litigation search | No pending suit, attachment or tenancy claim |
| Seller's loan statement and the bank's NOC | The bank is paid from the sale money at completion and releases the original deeds to you |
If the NRI seller signs through a power of attorney
A power of attorney works only if it names this property, was authenticated abroad and was stamped in India in time.
| Check | What good looks like |
|---|---|
| Scope | Names this property and expressly allows sale, signing, registration and receipt of the price. A general "manage my affairs" document is not enough |
| Execution abroad | Signed before, and authenticated by, a notary, Indian consul or other listed officer (Registration Act, Section 33); in practice an apostille or Indian-mission attestation |
| Stamping in India | Within three months of first reaching India (Indian Stamp Act, Section 18, and state equivalents) |
| Registration | Where state law requires it. Kerala does, unless the attorney is a close relative |
| Still valid | The seller is alive and has not revoked it; a power of attorney normally ends on the principal's death |
Ask the seller for a dated written confirmation of the sale from their own email, close to registration. The attorney signs; only the registered sale deed passes title. See the POA sale guide, attestation by country and stamping rules.
Inherited property sold by an NRI heir
An heir can sell only what they inherited, so confirm who all the heirs are and that each one either signs or has given up their share by a registered deed.
| Situation | What to ask for |
|---|---|
| Will | The will, plus probate if obtained; the other heirs' consent where the will could be contested |
| No will | Legal-heir or family-member certificate and a family tree that matches the personal law |
| Some heirs not selling | Registered release or relinquishment deeds in favour of the sellers |
| Records | Mutation into the heirs' names before your deed, where the local office allows |
Probate is no longer compulsory for wills covering property in Mumbai, Kolkata or Chennai, where it once was: Section 213 of the Indian Succession Act was omitted by the Repealing and Amending Act 2025, assented to on 20 December 2025. Your lender or registrar may still ask for it. A succession certificate covers debts and securities, not a flat. Compare the documents on the legal-heir, succession and probate page.
Before the deed: price, stamp value, TDS and payment
Put the tax base, the certificate rate and the payee account into the agreement before registration.
| Item | The rule |
|---|---|
| Tax base | The full price at the non-resident rate, including any part used to clear the seller's loan, unless a certificate says otherwise. That is the safe default, because you cannot verify the seller's gain |
| Certificate | Check the rate, amount and validity period; use it only for payments it covers |
| Price below stamp-duty value | For you: if stamp value exceeds price by more than the higher of Rs 50,000 and 10% of the price, the gap is your income (Section 56(2)(x) of the 1961 Act, carried into the 2025 Act). For the seller: above 110% of price, stamp value becomes their sale price (Section 78 of the 2025 Act, formerly 50C) |
| Joint sellers | A separate deduction per seller, by status and share |
| Where you pay | The seller's own Indian account, normally NRO. Not abroad, not a relative's account |
The seller may not accept Rs 20,000 or more in cash as an advance or price for property (Section 269SS of the 1961 Act, carried into the 2025 Act). For co-owners, use the joint-seller split and the multiple buyers or sellers checklist.
After each payment: deposit, report, certify
The route depends on the date of each payment and on who you are, not on the registration date.
| Payment and buyer | Pay and report | Certificate to the seller |
|---|---|---|
| Any buyer, paid up to 30 September 2026 | TAN; deposit by the 7th of the next month (30 April for March); quarterly Form 144, formerly Form 27Q | Form 131, formerly Form 16A |
| Company, firm, NRI or other buyer that is not a resident individual or HUF, any date | Same TAN route | Form 131, formerly Form 16A |
| Paid from 1 October 2026 by a resident individual or HUF | No TAN; pay and report together on Form 141, Schedule E, within 30 days of the month-end | Form 132 |
Keep the deed, agreement, certificate, challans, bank trail and the seller's status evidence together. If you deducted too little or paid late, you are treated as the defaulter (an assessee in default under Section 398 of the 2025 Act, formerly Section 201): interest runs at 1% a month for not deducting and 1.5% a month for deducting but not paying. Correct it while you can still reach the seller. See the 2026 TAN and form changes and the wrong-form fix.
Precautions: the red flags that should stop the deal
Stop before paying if any check above fails, or if you see one of these.
| Red flag | What it usually means | What to do |
|---|---|---|
| Seller wants the full price with no tax deducted | They are pushing their tax onto you | Refuse; ask for a Form 128 certificate instead |
| Original title deeds are "with a relative" or cannot be produced | A possible undisclosed loan or earlier sale | Inspect the originals before the token |
| You can reach the seller only through the attorney | The POA may be revoked, or the seller may have died | Speak to the seller directly before each payment |
| Pressure to pay the token before papers are shared | You lose leverage to fix any gap | Documents first, token second |
Edge cases that change the answer
These situations change what you deduct, who may buy, or which papers you need.
| Situation | What changes |
|---|---|
| Seller becomes resident mid-deal | Payments falling in two financial years can need two treatments |
| Certificate names a different buyer | It does not cover you. The seller asks for a fresh certificate naming you |
| Your home loan pays the seller directly | The bank does not deduct for you. Deduct from your own contribution, or split the disbursement |
| Under-construction flat resold by the allottee | Still a sale by an NRI. Add the builder's NOC, the endorsed allotment and any tripartite loan papers |
| Seller is an OCI or foreign citizen | Same deduction. A foreign citizen who is not an OCI, or a citizen of certain neighbouring countries, may need RBI permission to sell |
| Seller is a company | An Indian company is resident: the 1% route. A foreign company: non-resident deduction at company rates, plus a board resolution naming the signatory |
| Agricultural land | NRIs and OCIs cannot buy it. An NRI heir can sell it only to a resident Indian citizen. Rural farmland may not be a capital asset, so ask for a nil certificate rather than judging it yourself |
| You are also an NRI | You may buy, paying from NRE, NRO or FCNR(B) or by inward remittance. You deduct and report like a company buyer, on the TAN route in the payment table |
Missed a step? Most can still be fixed
Fix the tax gaps first, because they grow every month. Fix title gaps, such as a power of attorney revoked before the deed or an heir who never signed, by a further registered deed while that person can still be reached. The missed-step fix guide takes each gap in turn.
A worked example: Rohan in Hyderabad
Rohan, a resident, agrees to buy Priya's Hyderabad flat for Rs 1.20 crore. Priya lives in Dubai and bought it in 2016 for Rs 60 lakh, so her gain is long-term. Stamp-duty value is Rs 1.30 crore. Every payment is made in November 2026, and his bank lends Rs 80 lakh, paid straight to Priya's NRO account.
Stamp value: the Rs 10 lakh gap is under 10% of the price (Rs 12 lakh), so nothing is taxable for Rohan and Priya's gain uses Rs 1.20 crore.
| No certificate | Certificate at 7% | |
|---|---|---|
| Tax deducted | Rs 17,94,000 (14.95%) | Rs 8,40,000 |
| From the bank to Priya | Rs 80,00,000 | Rs 80,00,000 |
| From Rohan to Priya | Rs 22,06,000 | Rs 31,60,000 |
| Priya receives | Rs 1,02,06,000 | Rs 1,11,60,000 |
14.95% is 12.5% plus 15% surcharge (payment above Rs 1 crore) plus 4% cess. Rohan's own Rs 40 lakh covers the tax either way. Paying as a resident individual after 1 October 2026, he needs no TAN and reports on Form 141, Schedule E.