NRI buyer, resident seller: you deduct 1%, not Section 195

The confusion comes from thinking the heavy NRI-property TDS follows you. It does not. Section 194-IA applies where the buyer pays a resident transferor, and it says nothing about the buyer's own residency, so your being an NRI does not change it.

So when you buy a resale flat worth ₹50 lakh or more from a resident seller, you deduct 1% under Section 194-IA, on the price or the stamp-duty value, whichever is higher, file a Form 26QB and do not need a TAN, exactly as a resident buyer would. It is only Section 195, which governs payments to a non-resident, that carries the heavier treatment, a TAN, a quarterly Form 27Q and a deduction on the gain rather than a flat 1%. And that applies only when the seller is an NRI. As an NRI buying from a resident, you are firmly in the 1% world.

The real risk runs the other way. If you buy assuming the seller is a resident, deduct only 1% under Section 194-IA, and the seller is in fact an NRI, you have under-deducted, because their sale needed Section 195. And the liability for that shortfall sits on you, the buyer: you are treated as an assessee in default for the tax that should have been deducted, plus interest and penalty, and the department recovers it from you, not the seller.

So the seller's residency is not a detail to take on trust. Residency here means income-tax residency for the relevant year, based on days in India, which is not the same as FEMA residency, so a person with an Indian passport can still be a tax non-resident. Before you deduct, get the seller's PAN and a written residency declaration, and look at the real signals, an address abroad, a power-of-attorney holder signing, money asked to an NRE or NRO account. If it is genuinely unclear, the safe course is to treat the seller as non-resident and deduct under Section 195, or have them get a lower-deduction certificate, because under-deducting is your exposure, not theirs.