India Tax & Regulatory
TDS on Sale Consideration (Section 194-IA / 195)
The buyer's statutory obligation to deduct tax at source on specified payments to a seller — including immovable property transfers over ₹50 Lakh (Section 194-IA) or any payment to a non-resident seller (Section 195) — before releasing proceeds.
Seller Example
A non-resident co-promoter selling his stake in a Faridabad manufacturing unit applies in advance for a lower-deduction certificate under Section 195 from the tax department, reducing the TDS the buyer must withhold from the default 20%+ surcharge rate down to a rate reflecting his actual capital gains tax liability — meaningfully improving his immediate cash-in-hand at closing instead of waiting a full year to claim a refund while filing his tax return.