An NRI connected to Myanmar selling property in India faces TDS under Section 195 of the Income Tax Act, generally at 20% plus applicable surcharge and cess on long-term capital gains. An India-Myanmar DTAA was signed 2 April 2008; this platform could not confirm its entry-into-force date from a primary source. Reported rates from a secondary source are dividends 5%, interest 10%, and royalties 10%, with no separate Fees for Technical Services article found. A lower or nil TDS certificate is available under Section 197.
How capital gains are calculated on property connected to Myanmar
For property located in India and sold by an NRI connected to Myanmar, the computation is identical
to that for any NRI seller: under Section 49 of the Income Tax Act, inherited property carries over the
original owner's cost of acquisition and holding period rather than resetting on the date of
inheritance, so most inherited-property sales qualify for long-term capital gains treatment with
indexation benefit where applicable. This is entirely separate from -- and should not be confused with
-- any tax treatment of property actually located in Myanmar, which this platform's Property guide for
Myanmar discusses separately given the restrictions on foreign land ownership there.
TDS under Section 195, and getting a lower or nil TDS certificate
Section 194-IA's 1% TDS applies only to resident sellers. For a non-resident seller, the buyer must
instead deduct TDS under Section 195, generally on the full sale consideration at the capital-gains rate
unless a lower-deduction certificate has been obtained. An NRI seller connected to Myanmar can apply to
the jurisdictional Assessing Officer, via Form 13 under Section 197, for a certificate authorizing TDS
at a lower or nil rate based on the actual computed gain -- worth evaluating with a chartered accountant
before the sale closes.
The India-Myanmar DTAA -- a confirmed signing date, with rates and entry-into-force flagged
An India-Myanmar Double Taxation Avoidance Agreement was signed on 2 April 2008, per the Income Tax
Department's own published page. That page did not state the treaty's entry-into-force date, and this
platform could not confirm it from a primary source -- readers relying on treaty relief should confirm
the applicable provisions and dates directly against the Department's full treaty text with a chartered
accountant. Reported withholding rates from a secondary tax-advisory compilation, not the primary treaty
text, place dividends at 5%, interest at 10%, and royalties at 10%, with no separate article found for
Fees for Technical Services -- meaning such payments would likely fall back to domestic Income-tax Act
rates rather than a treaty-specific rate. This platform recommends independently verifying all four
figures against the primary treaty document before relying on them.
Common mistakes in this process:
- Relying on the reported DTAA withholding rates without confirming them against the Income Tax
Department's own primary treaty text, given this platform's flagged sourcing gap.
- Assuming a Fees for Technical Services treaty rate applies -- this platform found no such
article in this treaty.
- Not applying for the Section 197 lower-deduction certificate before a property sale closes.
