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NRI Property Sale & Capital Gains

Selling property in India from abroad, planned before you sign. Capital gains, TDS, lower deduction certificates, reinvestment exemptions, and repatriation of proceeds, handled end to end by Chartered Accountants.

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?Quick Answer

How much tax does an NRI pay on selling property in India?

If you held property for more than 24 months, gain is taxed at 12.5% without indexation, plus surcharge and cess. Catch is TDS: buyer deducts it on full sale value, not your gain, which often locks up far more than you actually owe. A lower deduction certificate (Form 128), obtained before sale, brings TDS in line with your real tax.

Long-term rate
12.5%
Holding period
24 months
54EC bond cap
₹50 lakh
Key Facts at a Glance
Long-term gains (held over 24 months)12.5%, no indexation
Short-term gains (held up to 24 months)Slab rates
TDS calculated onFull sale value, not gain
Minimum TDS thresholdNone for NRI sellers
Indexation option (pre-July 2024 property)Residents only, not NRIs
Repatriation from NROUp to USD 1 million per year
What we handle

Selling from abroad, without losing lakhs to timing.

Many NRIs discover how much TDS is withheld only after a buyer has deducted it. We plan sale before deed is signed, so your money is not stuck with tax department for a year.

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01
Capital Gains Computation

We work out your gain from correct cost, improvement costs, and transfer expenses. For inherited property, we use previous owner's cost and holding period, as law requires.

02
Lower Deduction Certificate (Form 128)

We apply to tax department before sale, so buyer deducts TDS on your actual tax liability instead of full sale value.

03
Exemption Planning

We assess whether reinvesting in a new house in India (Section 54), buying specified bonds within six months (Section 54EC, up to ₹50 lakh), or Capital Gains Account Scheme can reduce or remove your tax.

04
Buyer-Side TDS Coordination

We guide your buyer on correct TDS form and deposit, so credit actually appears against your PAN. Resident-seller form (Form 141, earlier Form 26QB) cannot be used for an NRI sale.

05
ITR Filing & Refund

We report gain in your Indian return, claim credit for TDS deducted, and recover any excess as a refund.

06
Repatriation of Proceeds

We route proceeds through your NRO account and handle Form 145 (earlier Form 15CA) and Form 146 (earlier Form 15CB), so money moves abroad within USD 1 million annual limit without bank queries.

Selling property in India?

Book a 20-minute consultation. We will estimate your capital gains and TDS, and tell you whether a lower deduction certificate is worth applying for, before you sign anything.

Schedule a call
Frequently Asked Questions

NRI Property Sale - answered by CAs.

How much TDS is deducted when an NRI sells property in India?+
For long-term gains, buyer deducts TDS at 12.5% plus surcharge and 4% cess, roughly 13% to 15% in practice. For short-term gains, TDS is 30% plus surcharge and cess. In both cases it is calculated on full sale value, not your gain, unless you obtain a lower deduction certificate before sale.
Can NRIs claim indexation on property bought before July 2024?+
No. Option to pay 20% with indexation on property acquired before 23 July 2024 is available only to resident individuals and HUFs. NRIs pay 12.5% without indexation on long-term gains, regardless of when property was bought. Several widely read guides still say otherwise, but law limits this option to residents explicitly.
What is a lower TDS certificate, and when should I apply?+
It is a certificate from tax department (applied for using Form 128, earlier Form 13) that directs buyer to deduct TDS at a lower rate based on your actual tax liability. Apply before sale is registered. Once buyer has deducted TDS at full rate, only way to recover excess is by filing a return and waiting for a refund.
Is there a ₹50 lakh threshold for TDS when buying from an NRI?+
No. ₹50 lakh threshold applies only when seller is a resident. When seller is an NRI, TDS applies to every sale, whatever value.
Can I avoid capital gains tax by reinvesting money?+
Often, yes. Section 54 exempts long-term gains reinvested in one residential house in India, bought within one year before or two years after sale, or constructed within three years, subject to a ₹10 crore cap. Section 54EC exempts gains invested in specified bonds within six months, up to ₹50 lakh, with a five-year lock-in. Section 54F covers sale of assets other than a house.
How is inherited property taxed when I sell it?+
Inheriting property is not taxable. When you sell it, your gain is calculated using previous owner's cost of acquisition, and your holding period includes time previous owner held it, so most inherited property qualifies as long-term.
Can sale proceeds go straight into my NRE account?+
Generally, no. Sale proceeds are credited to your NRO account. RBI allows transfers from NRO to NRE, and remittance abroad, within USD 1 million per financial year limit, with Forms 145 and 146. If property was originally bought with NRE or FCNR funds, amount originally paid in foreign exchange can be repatriated outside that limit, for up to two residential properties.
Do I need to file an income tax return after selling?+
Yes. You must report capital gain in your Indian return. Filing is also only way to claim credit for TDS deducted and to receive a refund of any excess.
Does October 2026 no-TAN change affect NRI sellers?+
From 1 October 2026, resident individual and HUF buyers can deposit TDS using their PAN instead of a TAN. TDS rate, full-sale-value base, and buyer's liability are unchanged. Read our full breakdown: no-TAN rule, explained properly.
Can I sell through a power of attorney?+
Yes. A registered power of attorney holder can execute sale on your behalf, and tax and TDS rules are same. Drafting and registering power of attorney is legal work handled by an advocate; we manage tax side and coordinate with your advocate.
Related Services

Often combined with this service

Repatriation of Funds

Move property-sale proceeds abroad with Forms 145 and 146 and bank coordination.

Learn more →
NRI Taxation & ITR

Report capital gains, claim TDS credit, and recover excess deduction through your return.

Learn more →
DTAA Advisory

Coordinate Indian gains and tax credits with your country of residence.

Learn more →
Related

Related services & tools

Tool
Property TDS Calculator

TDS on sale or purchase of Indian property by an NRI.

Tool
Capital Gains Planner

Model gains, indexation and exemptions before you sell.

Guide
Buying property from an NRI: a 'no TAN' rule

What October 2026 TAN relief changes, and what it doesn't.

Service
Repatriation of Funds

Move up to USD 1M a year out of India, correctly documented.

Service
NRI Taxation & ITR

Residency-correct ITR filing and year-round tax planning for NRIs.

Section references are to the Income-tax Act, 1961. Under the Income-tax Act, 2025 (effective 1 April 2026), these provisions are renumbered: Section 54 is now Section 82, Section 54EC is Section 85, Section 54F is Section 86, Section 112 is Section 197, Section 195 is Section 393(2) and Section 197 is Section 395(1). Forms 13, 15CA and 15CB are now Forms 128, 145 and 146. The substantive rules described here are unchanged. Last reviewed October 2026.

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