Short answer
If you live in UAE and sell property in India, buyer deducts TDS on your full sale value: 13% to 14.95% for property held over 24 months. Your actual tax is often far lower. UAE doesn't levy income tax on individuals, so there's no tax back home to set India tax against. India tax is your final cost, and excess TDS stays locked until India refunds it.
Two moves fix most of this: a lower deduction certificate (Form 128) before sale, and planning reinvestment early.
Why this matters more if you live in UAE
If your country of residence also taxes this gain, a tax credit there may offset India tax. UAE doesn't levy income tax on individuals, so for a UAE resident:
- India tax on your gain is your only tax on it. Cutting it is a real saving.
- Excess TDS waits with India's tax department until refund, with nothing abroad to offset it.
Living in Saudi Arabia, Qatar, Kuwait, Bahrain or Oman? Check how your country treats a gain made abroad before you plan around this.
How much buyer deducts
Unless you have a certificate from tax department, buyer deducts TDS under Section 393(2) of Income-tax Act, 2025 (earlier Section 195) on full sale value, not on your gain. 1% TDS with a ₹50 lakh threshold applies only when seller is a resident. For an NRI seller, there is no threshold.
| Sale value | Property held over 24 months |
|---|---|
| Up to ₹50 lakh | 13.00% |
| ₹50 lakh to ₹1 crore | 14.30% |
| Above ₹1 crore | 14.95% |
Rates include surcharge and 4% cess. Held 24 months or less? Your gain is short-term, and buyer deducts at 30% plus surcharge and cess: at least 31.2% of sale value. Work out your own number with our property TDS calculator.
Three examples
These use made-up numbers to show how rules work. They are not client cases.
1. Dubai: long-term sale, small gain
You sell a Pune flat for ₹90 lakh that you bought in 2016 for ₹70 lakh.
- Buyer deducts 14.3% of ₹90 lakh: ₹12.87 lakh.
- Your gain is ₹20 lakh. As an NRI you get no indexation and can't set your basic exemption limit against this gain: both reliefs in Section 197 are for residents only.
- Tax on that gain at 12.5% plus 4% cess: ₹2.6 lakh, assuming no surcharge.
- About ₹10.3 lakh of your own money waits with tax department until your return is processed.
2. Sharjah: selling too early
You bought a Noida flat in March 2025 for ₹55 lakh and sell it in October 2026 for ₹60 lakh. You've held it under 24 months, so your gain is short-term.
- Buyer deducts 30% plus 10% surcharge and 4% cess: 34.32% of ₹60 lakh, ₹20.59 lakh.
- Your gain is only ₹5 lakh. Even taxed at 30% plus cess, tax on it would be ₹1.56 lakh.
- Sell after March 2027 instead and it turns long-term: TDS drops to 14.3% (₹8.58 lakh), and tax on a ₹5 lakh gain at 12.5% plus cess is ₹65,000.
3. Abu Dhabi: large sale, planning to reinvest
You sell a Bengaluru house for ₹2.4 crore that you bought in 2012 for ₹1.2 crore. Your gain is ₹1.2 crore.
- Buyer deducts 14.95% of ₹2.4 crore: ₹35.88 lakh.
- Investing ₹50 lakh in Section 85 bonds within six months, and buying a residential house in India within two years under Section 82, can sharply cut tax on that gain, subject to each section's conditions.
- Buyer still deducts full ₹35.88 lakh unless a Form 128 certificate is in place. Form 128 is where you show tax department your estimated income and tax, so file it before sale.
In each case, a Form 128 certificate obtained before payment means buyer deducts at certificate rate instead.
Step 1: Get a Form 128 certificate before sale
Form 128 asks your Assessing Officer for a certificate to deduct TDS at a lower rate, or not at all, under Section 395(1). Once it is issued, buyer must deduct at rate in certificate.
- It is filed online on TRACES, with a computation of your estimated income and tax for that year.
- File it as early as possible. Income Tax Department's own FAQs say it can't be processed once transaction is completed.
Step 2: Cut actual tax before you sell
- Sold a residential house? Section 82 (earlier Section 54): buy one residential house in India within one year before or two years after sale, or build one within three years. Cost above ₹10 crore is not counted.
- Section 85 (earlier Section 54EC): invest gain from land or building in specified bonds (NHAI, REC or other notified bonds) within six months of sale, up to ₹50 lakh. Sell or borrow against these bonds within five years and exempt gain becomes taxable.
Both carry further conditions, and time limits run from your sale date. Plan before you sell, not after.
Getting money out of India
- NRIs can remit up to USD 1 million per financial year (April to March) from NRO account balances.
- If you bought property with foreign exchange sent through banking channels, or from NRE or FCNR funds, sale proceeds can be repatriated under property rules, for up to two residential properties.
- Before money goes abroad, Form 145 (earlier 15CA) is filed, with a CA's certificate in Form 146 where required.
Checklist
- Once you have a buyer: work out your gain, decide on reinvestment, file Form 128.
- Before payment: give buyer your certificate.
- After sale: check TDS shows against your PAN on income tax portal.
- File your India return: claim exemptions and refund of excess TDS.
- To move money: Forms 145 and 146, within USD 1 million per financial year.
How we help
We handle Form 128, capital gains computation, return filing and repatriation for NRIs living in Gulf. Tell us your sale details: a Chartered Accountant replies within one working day with next steps, then scope and fee in writing. Book a consultation.
General information, not individual tax advice. Section references are to Income-tax Act, 2025, as amended by Finance Act 2026. Last reviewed November 2026.