Eldeco EOE NRI TDS 2026 | 1% Rule, Section 195, Form 27Q, Repatriation

Quick Answer

Two distinct TDS rules apply to NRI property transactions: (1) 1% TDS rule (Section 194-IA) applies when a resident buyer purchases an Eldeco EOE unit from a resident seller for over ₹50 Lakh — the buyer deducts 1% TDS on the agreement value and remits to the tax authority. (2) Section 195 TDS applies when an NRI sells the property (post-possession) — the resident buyer deducts 20%+ TDS on the sale value (rates vary by holding period and capital-gains treatment). For NRI buyers of Eldeco EOE under-construction inventory, Section 195 does NOT apply because the seller is the developer (a resident company). NRI buyers fund via NRE/NRO accounts under FEMA, with Form 27Q reporting on TDS deducted. Lower-TDS certificate (Form 13) can be obtained to reduce the 20%+ rate for NRI sellers. Last reviewed: 13 May 2026.

Two Distinct TDS Rules — Don't Confuse Them

NRI property tax mechanics in India are governed by two separate TDS provisions, each triggered by different scenarios:

Rule	Trigger	TDS rate	Form
Section 194-IA (1% rule)	Resident seller → any buyer (resident or NRI), agreement value > ₹50 Lakh	1% on agreement value	Form 26QB
Section 195 (NRI seller rule)	NRI seller → resident buyer	20%+ on sale value (LTCG) or 30%+ (STCG)	Form 27Q (quarterly)

For NRI buyers of Eldeco EOE under-construction inventory, Section 194-IA (the 1% rule) applies because the developer is a resident company. Section 195 becomes relevant only on the eventual resale exit when an NRI owner sells the property.

The 1% TDS Rule (Section 194-IA) — Mechanics

When buying Eldeco EOE (any configuration above ₹50 Lakh), the buyer (resident or NRI) deducts 1% TDS from each milestone instalment paid to the developer. The standard sequence:

Developer issues an invoice for the milestone instalment (e.g., 10% booking = ₹13.9 Lakh on a ₹1.39 Cr unit).
Buyer remits 99% of the instalment to the developer (₹13.76 Lakh) and 1% (₹13,950) directly to the tax authority via Form 26QB on the TIN-NSDL portal.
Buyer receives a Form 16B (TDS certificate) which the developer needs for tax-return reconciliation.
Process repeats for each milestone instalment.

Practically, the developer typically routes this for the buyer — Vidastu coordinates with the developer's finance team so the buyer doesn't need to manually file Form 26QB for each tranche. The total 1% TDS on a ₹1.39 Cr 3 BHK + 2T = ₹1.39 Lakh, paid across the 30:40:30 schedule.

Section 195 — When an NRI Sells

This is the rule that matters when an NRI Eldeco EOE owner eventually sells the property to a resident buyer. The resident buyer must deduct TDS at a much higher rate than the 1% rule:

Long-Term Capital Gains (LTCG) — property held over 24 months. TDS rate: 20% on sale value + 15% surcharge (if income above ₹50 Lakh) + 4% cess. Effective rate ~23%.
Short-Term Capital Gains (STCG) — held under 24 months. TDS rate: 30% on sale value + surcharge + cess. Effective rate ~32%.

Note: TDS is on SALE VALUE, not on capital gain. So if an NRI sells an Eldeco EOE 3 BHK for ₹2.5 Cr (having bought at ₹1.39 Cr — gain of ~₹1.1 Cr), the buyer deducts 20% × ₹2.5 Cr = ₹50 Lakh as TDS, even though the actual LTCG tax liability is only ~₹22 Lakh (20% × indexed gain). The NRI seller recovers the excess by filing their Indian tax return at year-end.

Lower-TDS Certificate (Form 13) — The Pre-Sale Optimization

To avoid the cash-flow hit of having 20% of sale value tied up until year-end refund, NRI sellers can apply for a lower-TDS certificate under Section 197. Mechanics:

Engage a CA to prepare the application showing actual capital-gains computation (with indexation for LTCG, exemptions under Section 54 if reinvesting in another property).
File Form 13 application with the Income Tax authority via the e-TRACES portal.
Authority reviews and issues a certificate specifying the lower TDS rate — typically reflecting actual tax liability (often 1-5% rather than 20-30%).
NRI seller hands the certificate to the buyer; buyer deducts at the certificated rate.

Application takes 30–60 days. For high-value NRI exits, this is well worth doing — it can free up tens of lakhs in working capital that would otherwise be locked in TDS.

NRI Funding Routes (FEMA Compliance)

Under the Foreign Exchange Management Act (FEMA), NRIs fund property purchases through specific account types:

NRE Account (Non-Resident External)

Funded by foreign-earned currency converted to INR. Fully repatriable. Both principal and interest can flow back to the NRI's foreign account without limit. Best for NRIs whose primary income is overseas and who want maximum repatriation flexibility.

NRO Account (Non-Resident Ordinary)

Funded by India-source income (rental, FD interest, dividends, sale proceeds). Repatriation capped at USD 1 million per financial year, with Form 15CA + 15CB (CA certificate) filings. Best for NRIs who have India-source income they need to deploy.

Direct Foreign Remittance

NRIs can remit foreign currency to the developer's INR account; the developer's bank converts at the prevailing rate. Common practice for first-time NRI buyers without an established NRE account. Tracked under FEMA via the developer's bank reporting.

No physical foreign cash is accepted under FEMA — all NRI payments must flow through banking channels with traceable origin.

Repatriation at Exit

When the NRI owner eventually sells Eldeco EOE and wants to repatriate the proceeds:

Funds originally remitted via NRE account — principal portion repatriable without limit; gain portion (post-TDS) falls under USD 1M annual cap.
Funds originally remitted via NRO account — entire sale proceeds fall under USD 1M annual repatriation cap.
Form 15CA + 15CB filings — required for any repatriation above ₹5 Lakh in a single transaction (CA-certified Form 15CB plus electronic Form 15CA).
Tax clearance — TDS must be deducted and remitted before repatriation can begin.

Worked Example — NRI Buyer / Eventual NRI Seller

NRI Buyer at Booking (2026)
Buys 3 BHK + 2T at ₹1.39 Cr, funded 30% from NRE account + 70% home loan
1% TDS on each instalment under Section 194-IA, routed via developer
Total 1% TDS on full BSP = ₹1.39 Lakh, paid across milestones
5% GST on under-construction instalments — ~₹4.89 Lakh
Stamp duty + registration at AFS — ~₹11.12 Lakh

NRI Seller at Exit (Year 2034 — Hypothetical Sale at ₹2.5 Cr)
Holding period: 8 years (LTCG)
Indexed cost of acquisition: ~₹1.95 Cr (with CII indexation)
LTCG: ~₹55 Lakh
LTCG tax @ 20% + surcharge + cess: ~₹13 Lakh
WITHOUT lower-TDS certificate: buyer deducts 20% × ₹2.5 Cr = ₹50 Lakh TDS at sale; NRI seller recovers ₹37 Lakh via year-end return.
WITH lower-TDS certificate (Form 13): buyer deducts the actual tax liability ₹13 Lakh; NRI seller has ₹37 Lakh more in immediate cash flow.
Repatriation under FEMA, with Form 15CA + 15CB.

What Vidastu Coordinates for NRI Buyers

FEMA-compliant funding route confirmation (NRE vs NRO vs direct remittance).
1% TDS routing via the developer's finance team (no manual Form 26QB filings for each tranche).
Form 27Q reporting if applicable (relevant on eventual resale exit).
POA validation for buyers signing remotely.
Lower-TDS certificate application coordination at the exit-sale stage.
Form 15CA / 15CB liaison with the developer's CA at repatriation.

Bottom Line

NRI TDS at Eldeco EOE has two distinct rules — the 1% buyer-side rule (Section 194-IA) at purchase, and Section 195 (20%+) at eventual NRI resale exit. The 1% rule is administrative and typically routed by the developer; the 20%+ rule on resale is where NRIs should plan ahead with a lower-TDS certificate application to free up working capital. FEMA compliance via NRE / NRO routes is straightforward but documentation-heavy. Vidastu coordinates the end-to-end flow so NRI buyers transact with minimal personal time investment — typically just signing the AFS in person or via validated POA, and providing KYC for FEMA reporting.

NRI Buying or Selling? Sachin Coordinates the Full TDS + FEMA Flow

Sachin Bansal, VP Sales, Vidastu Advisory — UP RERA channel partner UPRERAAGT000309/01/2026. Zero buyer-side brokerage.

📞 Call Sachin — +91 99583 02906 💬 WhatsApp

Frequently Asked Questions

Do I need to deduct 1% TDS when buying Eldeco EOE?

If you're a resident buyer purchasing from a resident seller (which the developer Eldeco Sohna Projects Limited is) for over ₹50 Lakh — yes, you deduct 1% TDS on each instalment under Section 194-IA. Developer typically issues a TDS-net invoice, you remit the 1% to the tax authority and file Form 26QB. The developer claims credit when filing their own return. For Eldeco EOE 3 BHK + 2T at ₹1.39 Cr: 1% TDS = ₹1.39 Lakh, paid across the milestone instalments.

Does 1% TDS apply if I'm an NRI buying from the developer?

Yes — Section 194-IA applies based on the seller's residential status (here, the developer is a resident company, so 1% TDS rule applies) regardless of the buyer's residential status. NRI buyer still deducts 1% from each instalment and files Form 26QB. The developer claims it back in their corporate tax return.

What is Section 195 and when does it apply?

Section 195 of the Income Tax Act covers TDS on payments to NON-RESIDENT sellers. It applies when an NRI sells the property (post-possession) to a resident buyer. The resident buyer must deduct TDS at 20%+ (rate depends on holding period and capital-gains classification — long-term vs short-term). For an Eldeco EOE first-sale by the developer, Section 195 does NOT apply (seller is resident). It becomes relevant only when an NRI Eldeco EOE owner later sells the unit.

What rate of TDS applies under Section 195 when an NRI sells?

Standard rates: (1) Long-term capital gains (property held over 2 years): 20% TDS on the sale value (not just the gain) — plus surcharge + cess; (2) Short-term capital gains (held under 2 years): 30% TDS on sale value + surcharge + cess. The buyer can apply for a lower-TDS certificate (Form 13) on behalf of the NRI seller, reducing the TDS to the actual capital-gains tax liability — but this requires applying to the Income Tax authority in advance, which takes 30–60 days.

What is Form 27Q?

Form 27Q is the quarterly TDS return for payments to non-residents under Section 195. The resident buyer (deducting TDS) files Form 27Q within the prescribed deadline (typically by end of next quarter). For Eldeco EOE NRI buyers buying from the developer, Form 27Q is NOT applicable; Form 26QB applies for the 1% TDS instead. Form 27Q becomes relevant only on the resale exit when an NRI seller is involved.

How can an NRI seller reduce the 20%+ TDS via lower-TDS certificate?

Apply for a lower-TDS certificate (Form 13) under Section 197 of the Income Tax Act, before the property sale. The CA prepares the application showing actual capital-gains calculation (with indexation benefit for LTCG, exemptions under Section 54 if reinvesting in another property). If approved, the buyer deducts TDS at the certificated rate (often 1-5% rather than 20%+). The application takes 30–60 days; plan the sale timeline accordingly.

Can NRI buyers fund Eldeco EOE in INR or foreign currency?

Under FEMA, NRIs fund property purchases via two routes: (1) NRE account (Non-Resident External — funded by foreign earnings, fully repatriable); (2) NRO account (Non-Resident Ordinary — funded by India-source income, repatriation capped at USD 1M per year with form filings). Both are INR accounts in India. Direct foreign-currency remittance is allowed but converts to INR before the developer accepts it. No physical foreign cash is accepted under FEMA.

Can I repatriate sale proceeds when I sell Eldeco EOE?

Yes — under FEMA, NRIs can repatriate up to USD 1 million per financial year from NRO account proceeds (which is where post-sale funds typically land). Two restrictions: (1) tax must be paid / TDS deducted before repatriation; (2) Form 15CA + 15CB (CA certificate) filed for any repatriation. For sales funded originally through NRE account, the principal can be re-repatriated without limit (only the gain portion, post-tax, falls under the USD 1M cap).