When an NRI sells property in India, two things matter: capital gains tax and TDS (tax deducted at source by the buyer). This is more involved than a resident sale.
Capital gains
- Long-term (property held over 24 months) vs short-term (24 months or less) are taxed differently. Budget 2024 changed long-term capital gains rules — confirm the current rate and whether indexation applies with a CA.
- Gains can be reduced/exempted by reinvesting under Sections 54 / 54EC (conditions apply).
TDS (the big one for NRIs)
- The buyer must deduct TDS on the sale when paying an NRI seller — typically on the full sale consideration, at the rate applicable to the gains, plus surcharge and cess.
- This is often higher than the actual tax due — so the NRI can apply to the Income Tax Department (Form 13) for a lower or nil TDS certificate based on the real gain.
- The buyer needs a TAN and must deposit the TDS and issue Form 16A.
Repatriating the proceeds
After tax, sale proceeds can be repatriated within FEMA limits — see our repatriation guide.
Strong advice: NRI property-sale taxation is rate-sensitive and changed recently — always work with a chartered accountant to get the TDS certificate and file correctly.
This guide is general information, not legal, tax or financial advice. Rules (FEMA, income tax, TDS, stamp duty) change and depend on your situation — please confirm current rules with a qualified chartered accountant, lawyer or the relevant authority before acting.