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Property — Sale

Splitting the TDS when a property has more than one buyer or seller

The sale is not one-to-one: there are two buyers, or you are one of several co-owners, and no one is sure how the TDS is supposed to be split.

The deal has more than two parties. Perhaps a couple is buying together, or the property you are selling is co-owned by you and your siblings, some resident in India and some not. The buyers do not know how much tax to deduct or against whom, and everyone reaches for the simple 1% figure they have heard of. For a sale involving a non-resident that simple approach is wrong, and getting it wrong leaves both sides exposed. The rules are clear once the shares are separated out.
Last reviewed: 26 July 20267 min readReviewed by Preetesh Maloo, CA

The short answer

The TDS is split by party, not applied as one blended figure. Where you sell to more than one buyer, each buyer deducts under Section 195 on the part of the price they pay you, and each of them needs their own TAN. Where the property is co-owned, each seller is taxed only on their own share, so the buyer must apply Section 195 to a non-resident co-owner's share and the 1% resident rule (Section 194-IA, Form 26QB) only to a resident co-owner's share. The 1% resident-buyer rule does not reach your NRI share at all, so a buyer who deducts a flat 1% on the whole property has under-deducted on your portion and left themselves exposed.

References on this page

  • Section 195: each buyer deducts on the part of the price paid to the non-resident seller
  • Section 194-IA applies only to a resident transferor (1%, Form 26QB, PAN), not an NRI seller
  • Each buyer of an NRI's share needs its own TAN (Section 195 requires a TAN)
  • Each co-owner's capital gain is computed on their own share

More than one buyer: each deducts on their part

Where a property is sold to more than one buyer, for example a couple buying jointly, the withholding does not fall on one of them for the whole price. Each buyer deducts tax under Section 195 on the portion of the consideration that they pay to you, and each of those buyers needs their own TAN to do it, because Section 195 deduction runs through a TAN and a joint one is not allowed.

So a sale to two buyers means two deductors, two TANs, two sets of Form 27Q filings, each for their share of the payment. This is more administrative than a single-buyer sale, and it is where co-purchases to an NRI seller most often go wrong, one buyer assumes the other is handling it, or they try to run it through a single PAN-based deduction. A practising CA sets each buyer up correctly so the credit reaches your PAN in full.

Co-owned property: each seller on their own share

When the property has several sellers, each co-owner is a separate taxpayer. Each seller's capital gain is computed on their own share of the price and their own share of the cost, and each is taxed individually. There is no single gain for the property as a whole.

The deduction has to follow the same logic. If the co-owners are a mix of residents and non-residents, the buyer cannot apply one rate to the whole consideration. On a resident co-owner's share the buyer uses the 1% rule under Section 194-IA with Form 26QB and the seller's PAN. On your non-resident share the buyer uses Section 195, with a TAN and Form 27Q. Blending the two, or applying 1% across the board, under-deducts on the NRI share and exposes the buyer, so the shares must be separated at the point of deduction.

Why the 1% shortcut is the trap, and the fix

The 1% resident-buyer rule under Section 194-IA is written to apply only where the seller is a resident. It does not reach a non-resident seller at all. So a buyer who deducts a flat 1% on the whole price of a property that has an NRI co-owner has short-deducted on the NRI portion, and as the deductor it is the buyer who is treated as in default for the shortfall, with interest and penalties.

The fix is to compute each seller's share up front, apply the right regime to each, and, for your NRI share, use a Form 13 lower-deduction certificate so the Section 195 withholding is on your real gain rather than a heavy flat rate on the gross. A practising CA maps the shares, gets the buyers their TANs where needed, and lines up the certificates so everyone's deduction is correct and your credit is clean.

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What's involved

What the CA actually does

  1. 1

    We separate the shares

    We compute each seller's gain on their own share and each buyer's payment portion, so nobody is taxed or deducted on the whole property.

  2. 2

    We get the deduction right per party

    We apply Section 195 to your non-resident share and the 1% rule only to any resident co-owner's share, and we make sure each buyer of your share has a TAN.

  3. 3

    We reduce the withholding on your share

    We file a Form 13 so the Section 195 deduction on your portion is on your real gain, not a flat rate on the gross value of your share.

  4. 4

    We reconcile the credit

    We carry the split TDS into your return so the credit for your share reaches your PAN in full and any excess is refunded.

What to have ready

Documents you'll typically need

  • The sale agreement showing all buyers and sellers and their shares
  • The ownership documents establishing each co-owner's share
  • The cost records for the property, to apportion by share
  • PAN and residency details for each party

Your destination country can change the details

Requirements differ from one consulate, university and visa route to the next — how recent the figures must be, how long funds must have been held, and which certificates are mandatory. We assemble the documents around the exact checklist you're applying under. To see how India's tax treaty with your country of residence affects related filings, set your country below or compare all 31 countries.

Frequently asked questions

Common questions

Multiple buyers or co-owners on the sale?

Tell us the parties and the shares. A practising CA will split the TDS correctly on a free call, no obligation.

No card, no obligation. All certification and filing work is handled by ICAI-registered practising Chartered Accountants.