For NRI owners selling
Selling property in India as an NRI: TDS, LDC, and repatriation
Published 4 September 2026·8 min read
Selling a property in India as an NRI is mostly a tax exercise. The transaction itself is ordinary; what is not ordinary is that the buyer is legally required to withhold tax on the whole sale price before paying you — not on your profit — unless you have arranged otherwise in advance. The gap between doing this well and doing it badly is often several months of your money locked with the tax department.
General information, not tax advice. The rates and forms here change with each finance act; confirm the current position with a chartered accountant before you list.
What changes when the seller is an NRI
When a resident sells, the buyer deducts 1 percent TDS on sales of 50 lakh or more and that is the end of it. When an NRI sells, three things change:
- TDS is deducted under Section 195, not 194-IA, at the capital-gains rate, and on the full consideration unless you reduce it with a certificate.
- The buyer must obtain a TAN, deposit the tax, file Form 27Q, and issue you Form 16A. Many resident buyers do not know this, so it becomes your job to guide them.
- Repatriating the proceeds needs a specific paperwork trail — Form 15CB from a CA, then Form 15CA — before the bank will send money abroad.
TDS on the sale: the big one
For a property held more than 24 months (a long-term asset), the buyer withholds at 12.5 percent plus surcharge and cess for transfers on or after 23 July 2024. Before that date it was 20 percent with indexation. Surcharge depends on the sale value and is capped at 15 percent for capital gains; with cess the effective long-term rate tops out around 15 percent of the gain — but remember the default is that it is deducted on the entire sale price.
| Holding period | Gain type | Indicative TDS basis |
|---|---|---|
| 24 months or less | Short-term | Slab rates, on the gain (or full value without an LDC) |
| More than 24 months | Long-term | 12.5% + surcharge + cess (from 23 Jul 2024) |
| More than 24 months, pre-23 Jul 2024 transfer | Long-term | 20% + surcharge + cess, with indexation |
On a 2 crore sale, deduction on the full price at the long-term rate is roughly 25 to 30 lakh withheld, when your actual tax on the gain might be a fraction of that. The rest is refunded — after you file your return for the year and the department processes it, which is rarely quick.
The lower-deduction certificate (Form 13)
The fix is to apply, before the sale, for a lower- or nil-deduction certificate under Section 197. You file Form 13 online with the Assessing Officer, showing your expected capital gain and the tax on it. The officer issues a certificate telling the buyer to deduct TDS on that lower figure instead of the full price.
- Apply on Form 13 through the TRACES / e-filing portal.
- Supply the purchase deed, the draft sale deed, a capital-gains computation, and proof of any reinvestment you intend.
- Allow a few weeks to a couple of months for processing — this is why it has to start before you are at the registration table.
- Give the certificate to the buyer so they deduct the reduced amount.
Capital gains and exemptions
The gain is the sale price less the indexed or actual cost and the cost of transfer. NRIs get the same principal exemptions as residents:
- Section 54 — reinvest the long-term gain from a residential property into another residential property in India, within one year before or two years after the sale (three years to construct).
- Section 54EC — invest the gain, up to 50 lakh, in specified bonds (NHAI, REC and similar) within six months, locked for five years.
- Section 54F — for a gain on a non-residential asset, if you reinvest the whole net consideration in a house.
The timing conditions are strict and unforgiving. If you cannot complete the reinvestment before your return is due, the gain goes into a Capital Gains Account Scheme deposit to hold the exemption.
Moving the proceeds abroad
Sale proceeds land in your NRO account first. From there:
- The portion equal to what you originally paid through NRE / FCNR / inward remittance, for up to two residential properties, is repatriable on production of the original inward-remittance evidence, outside the annual cap.
- The balance is repatriable up to USD 1 million per financial year, after a CA certifies the tax position on Form 15CB and you file Form 15CA.
If you inherited the property, you can still repatriate up to the USD 1 million annual limit, with documentation of the inheritance.
A realistic timeline
| Stage | Rough duration | Runs in parallel with |
|---|---|---|
| Decide to sell → Form 13 filed | 1–2 weeks | Listing the property |
| Form 13 processing → certificate | 3–8 weeks | Finding a buyer, agreement |
| Agreement → registration | 2–4 weeks | Buyer arranges TAN, funds |
| Registration → funds in NRO | Days | — |
| CA 15CB + 15CA → money abroad | 1–2 weeks | Return filing for the year |
Common questions
How much TDS does a buyer deduct when buying from an NRI?
Tax is deducted under Section 195 at the NRI seller’s capital gains rate, and for a long-term gain that is 12.5 percent plus surcharge and cess for transfers on or after 23 July 2024, where it was 20 percent with indexation before. Crucially it is deducted on the entire sale consideration, not just the gain, unless the seller produces a lower- or nil-deduction certificate.
What is a lower-deduction certificate and why does it matter?
It is an order from the Income Tax Department, applied for on Form 13, that tells the buyer to deduct TDS on the actual expected gain rather than the full sale price. Without it, a large part of your sale proceeds is withheld and locked up until you file a return and claim the refund a year or more later.
Can an NRI claim the Section 54 capital gains exemption?
Yes. An NRI can claim exemption on a long-term gain from a residential property by reinvesting in another residential property in India under Section 54, or in specified bonds under Section 54EC, on the same conditions as a resident. The reinvestment timing rules are strict, so plan before you sell.
How do I take the sale proceeds out of India?
Through your NRO account, up to USD 1 million per financial year, after your bank has a chartered accountant’s certificate on Form 15CB and you have filed Form 15CA. Proceeds up to the amount you originally brought in through foreign channels for up to two residential properties can be repatriated without counting against that limit.
Talk it through with an advisor
This guide is general information. For your own purchase, an advisor can walk through what applies to your situation, from shortlist to registration.
Written by the NelaZo team
NelaZo’s guides are prepared with Manjunath Vishwanath, co-founder, and reviewed with the legal and CA partners advisors work with. General information, not legal, tax, or investment advice — confirm the current position with a qualified professional before you act.
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