My friend wrote to me:
"I need a small favour if possible , the situation is like this : I booked one apartment in Delhi from DLF but the delivery is delayed by 4 years . They are paying compensation for delay . I have made entire payment from NRE a/c of Sbi Nri br. But Dlf is deducting TDS from the compensation money @ 30.9 percent . I need to know is this compensation is taxable if so under which category and what is the percent .
I don't have any earning in India . Can I get back this money if TDS certificate is produced"
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  • Any investment proceeds to an NRE/NRO account has a TDS of 30+% applied on it. Any excess tax deducted over the applicable tax as per income slabs can be claimed as refund while filing IT return.
  • Compensation received is taxable to you as "Income from other sources". Since you are a non resident, the remitter (DLF)of funds has to mandatorily deduct 30.90% TDS. This is irrespective of which account you made the initial payment.

    Options for you is to either apply for a nil/lower tax deduction certificate to your Assessing Officer and provide that certificate to DLF however, obtaining this certificate takes time.

    Better option is to suffer the tax, file a return in India and claim refund.

  • Thank you very much.They have deducted 2.2 lacs as TDS. My friend paid from NRE account while purchasing the apartment.Therefore , how it can be recovered to NRE account? What is the procedure for filing a tax return by NRI ?