NRI Selling Property in India – TDS, Capital Gains & Lower Deduction Certificate

When a Non-Resident Indian (NRI) sells property in India, tax rules are very different from resident sellers.

Buyers are required to deduct TDS at much higher rates, and capital gains computation becomes more complex.

This 2026 guide explains:

• TDS rate on NRI property sale

• Indexation benefit

• Section 54 exemption

• Lower TDS certificate (Form 13)

• Repatriation of funds

• Joint property capital gains

📍 NRI Capital Gains Advisory – South Delhi
📞 CA Shiwali – 9266032777

Who is Considered an NRI for Property Sale?

Under the Income Tax Act, residential status determines taxation.

If you qualify as an NRI during the financial year of sale, special TDS provisions apply.

TDS on NRI Property Sale

Unlike resident sellers (1% TDS under Section 194IA), NRIs are subject to higher deduction.

TDS Rates (2026)

• 20% for long-term capital gains

• 30% for short-term capital gains

• Plus surcharge and cess

Effective rate can exceed 23–34% depending on income slab.

This is deducted by the buyer at the time of payment.

Capital Gains Calculation for NRI

Long-term property (held more than 24 months):

• Indexation benefit available

• Tax at 20%

Short-term property:

• No indexation

• Taxed at slab rates

(link to Indexation page here)

Section 54 & 54F Exemption for NRI

NRIs can claim:

• Section 54 (sale of residential house)

• Section 54F (sale of other assets)

Reinvestment must be in residential property in India.

( link to Section 54 page)

Lower TDS Certificate – How NRIs Save Huge Cash Blockage

Buyers often deduct full 20–30% on sale value.

However, actual capital gains tax may be much lower.

NRIs can apply for:

👉 Lower deduction certificate under Section 197 (Form 13)

If approved:

• Buyer deducts reduced TDS

• Cash flow improves significantly

This is extremely important in high-value South Delhi transactions.

Repatriation of Sale Proceeds

NRIs may repatriate funds abroad subject to:

• RBI compliance

• Proper documentation

• Tax clearance

Planning should be done before executing sale deed.

Section 50C & Stamp Duty Valuation

If sale consideration is lower than stamp duty value:

• Section 50C may apply

• Higher deemed value may increase tax

(link to Section 50C page)

Common Mistakes in NRI Property Sale

❌ Not applying for lower TDS certificate
❌ Wrong capital gains calculation
❌ Ignoring surcharge impact
❌ Delayed CGAS deposit
❌ Incorrect residential status determination

Professional advisory before sale agreement is strongly recommended.

FAQs – NRI Property Sale

1. Is 1% TDS applicable to NRI property sale?

No. 1% TDS applies only to resident sellers. NRIs face higher TDS rates.

2. Can NRI claim indexation benefit?

Yes, for long-term property, indexation is available.

3. How can NRI reduce TDS on property sale?

By applying for lower deduction certificate under Section 197.

4. Can NRI reinvest in property and save tax?

Yes, subject to Section 54 or 54F conditions.

NRI Capital Gains Consultant – South Delhi

If you are an NRI planning to sell property in South Delhi or Delhi NCR, proper tax planning can save significant tax and prevent excess TDS deduction.

📞 9266032777
CA Shiwali – NRI Property & Capital Gains Specialist

Read our complete Capital Gains & Property Advisory Guide for detailed planning.