Under Section 195 of the Indian Income Tax Act, buyers purchasing property from Non-Resident Indians (NRIs) are required to deduct TDS at a flat rate of **20% (plus applicable surcharge and cess, effectively coming to 22.88% or higher)** on the total sale value.
However, your actual tax liability is calculated on your **Capital Gains** (Sale Price minus Cost of Acquisition), not the total sale value. To prevent massive tax amounts from being blocked with the government for up to 18 months, NRIs can file Form 128 (erstwhile Form 13) with the IT department to receive a certificate allowing the buyer to deduct TDS at a drastically lower rate.
Ideally immediately after signing the Draft Sale Agreement and before receiving any payment from the buyer.
No, the buyer's PAN is mandatory as the TDS certificate is linked directly to the buyer's TAN/PAN details.