# NRI TDS on Property Sale

> When an NRI sells property in India, the buyer must deduct TDS on the capital gain at the rates in force — 12.5% for long-term gains (held over 24 months) or 30% for short-term gains, plus surcharge and 4% cess. In practice buyers deduct on the full sale price unless the seller gets a lower or nil deduction certificate from the Assessing Officer. The buyer needs a TAN and files the non-resident TDS return (Form 144 from tax year 2026-27, formerly 27Q).

Interactive calculator: https://www.industax.com/calculators/nri-property-tds

- **LTCG TDS (incl. cess, ≤ ₹50L):** 13%
- **Above ₹1 crore (LTCG):** 14.95%
- **Buyer needs:** TAN + Form 144

## Effective TDS rates on NRI property sales

Surcharge on long-term capital gains is capped at 15%; for short-term gains taxed at normal rates, higher surcharge can apply above ₹2 crore of income.

| Amount (as buyers usually apply it) | LTCG (12.5% + surcharge + cess) | STCG (30% + surcharge + cess) |
| --- | --- | --- |
| Up to ₹50 lakh | 13.00% | 31.20% |
| ₹50 lakh – ₹1 crore (10% surcharge) | 14.30% | 34.32% |
| Above ₹1 crore (15% surcharge) | 14.95% | 35.88% |

## Lower deduction certificate

The NRI seller can apply online to the Assessing Officer for a certificate to deduct TDS only on the actual gain, or at a lower rate, when the gain is small or will be exempt under Section 54/54EC. It takes a few weeks, so apply before the sale agreement fixes the payment date.

## Buyer's obligations

- Obtain a TAN (not needed when buying from a resident)
- Deduct TDS at the time of payment or credit, whichever is earlier
- Deposit by the 7th of the next month and file the non-resident TDS return
- Issue the TDS certificate to the seller
- Buying from a resident instead: 1% TDS if price is ₹50 lakh or more, via Form 141 (formerly 26QB), no TAN needed

## Worked example: NRI selling a flat for ₹90 lakh

1. Bought for ₹50 lakh in 2015, sold for ₹90 lakh — long-term gain ₹40 lakh (no indexation for NRIs).
2. Without a certificate, the buyer deducts 14.3% of ₹90 lakh = ₹12.87 lakh.
3. Actual tax on the ₹40 lakh gain (no surcharge at this income) = 13% × ₹40 lakh = ₹5.2 lakh.

**Result:** A lower deduction certificate avoids about ₹7.7 lakh being locked up until the refund.

## FAQs

### Can the NRI claim a refund of excess TDS?

Yes, by filing an ITR showing the actual gain and exemptions. The refund comes after processing, which is why a lower deduction certificate before the sale is better.

### Can the sale proceeds be repatriated?

Yes. Up to USD 1 million a financial year can be remitted from the NRO account with Form 145/146 (formerly 15CA/15CB), and proceeds of property bought with foreign funds can be repatriated subject to limits.

### Is indexation available to NRIs?

No. The option to pay 20% with indexation on property bought before 23 July 2024 is available only to resident individuals and HUFs. NRIs pay 12.5% without indexation.

## Official sources

- Income Tax Department: https://www.incometax.gov.in/

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This is general information, not advice for your specific facts.