Sec 195 · NRI Property Sale
How much TDS will buyer deduct?
Section 393(2) (earlier Section 195) - TDS on payments to non-residents
When an NRI sells property in India, buyer is legally required to deduct TDS before paying. And it can run to 13 percent or more of full sale price, not just profit. This calculator shows exact TDS under Section 393(2) for flats, plots, and commercial property. It covers both long-term and short-term capital gains, and shows reduced rate available if you have applied for a Lower Deduction Certificate using Form 128 (earlier Form 13) from income tax department.
Sale details (₹)
Buyer will deduct (TDS)
₹29,90,000
Effective on full sale consideration @ 14.95%
Base rate12.5%
Capital gain₹1,20,00,000
Actual tax liability₹17,94,000
Actual tax assumes no other Indian income.
Excess TDS (refundable)₹11,96,000
A lower deduction certificate (Form 128) could free up ₹11,96,000 at sale, instead of waiting months for a refund.
How this is computed
- ·Long-term capital gain: property held >24 months. For transfers on or after 23 July 2024, a non-resident is taxed at 12.5% without indexation, plus surcharge (capped at 15%) and 4% cess.
- ·Short-term capital gain: holding ≤24 months. Taxed at applicable slab rate: buyer typically deducts at 30% maximum slab.
- ·TDS is on FULL sale consideration, not just gain. This is a #1 issue for NRI sellers. Only a lower deduction certificate under Section 395(1) (Form 128, earlier Form 13) fixes it.
- ·LDC processing: file Form 128 (earlier Form 13) with jurisdictional TDS officer; processing usually takes several weeks. Apply BEFORE sale agreement.
- ·Surcharge on LTCG is capped at 15% even if sale value triggers higher bracket.
- ·Health & Education Cess of 4% is applied on (tax + surcharge).
- ·Excess TDS can be claimed as refund by filing ITR in India, but money can stay blocked for several months.
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