Selling Indian property as an NRI is straightforward once you understand one harsh fact: the buyer is legally bound to deduct TDS on the entire sale price, not just your profit — and at a far higher rate than the 1% that applies to a resident seller. Get this wrong and a large chunk of your money is parked with the tax department for up to a year. This guide explains the rates, the certificate that fixes the over-withholding, what you can repatriate, and the documents you'll need. Rules are as of June 2026; confirm current law and rates before transacting.
TDS rate on an NRI property sale
The TDS rate depends on how long you held the property:
| Holding period | Gain type | Base TDS rate | Effective (with surcharge + cess) |
|---|---|---|---|
| More than 24 months | Long-term capital gain (LTCG) | 20% | ~20.8% – 23.92% |
| 24 months or less | Short-term capital gain (STCG) | Slab rate | Up to ~30%+ |
Effective rates vary with the sale value because surcharge bands apply on higher amounts. As of June 2026 — verify the current surcharge slabs and any Budget changes.
Crucially, the buyer deducts this on the gross sale consideration, even though your actual tax is only on the capital gain. On a ₹2 crore long-term sale, that is roughly ₹41–48 lakh withheld upfront — usually far more than the real tax due.
The fix: a Section 197 lower-deduction certificate
The over-withholding is solved by applying for a Lower / Nil Deduction Certificate under Section 197 before the sale. You file Form 13 online with the cost of acquisition, indexation and any Section 54/54EC reinvestment plan; the Assessing Officer then certifies TDS on your actual gain rather than the full price. The buyer deducts the lower certified amount. This single step is the difference between locking up lakhs for a year and keeping your money working — apply early, as processing takes weeks.
How much can you repatriate?
From the NRO account that receives the proceeds, an NRI can repatriate up to USD 1 million per financial year, provided the taxes are paid and a chartered accountant files Form 15CB with your Form 15CA. If the property was originally bought with foreign funds routed through an NRE/FCNR account, repatriation of that original investment is more liberal. Proceeds always land in the NRO account first — see why in our NRE vs NRO guide.
Document checklist
- Title documents — sale deed, prior title chain, encumbrance certificate.
- Identity — PAN, passport, OCI/PIO card or visa.
- Section 197 certificate — if obtained, hand a copy to the buyer.
- Forms 15CA & 15CB — for repatriating the proceeds (CA-certified).
- NRO bank account proof for the credit.
- Power of Attorney — registered, if you cannot attend in person.
- Reinvestment proof — for Section 54 (new house) or 54EC (bonds) exemptions.
Saving tax on the gain
The long-term gain can be reduced or eliminated by reinvesting under Section 54 (buy another residential house in India) or Section 54EC (up to ₹50 lakh in NHAI/REC bonds within six months). Claim these in the Section 197 application so they also cut the TDS at source. For how the rest of your Indian income is taxed alongside the gain — and how DTAA and RNOR fit in — read our NRI tax slab guide.