Moment guide · FY 2026-27

I am selling an Indian property as an NRI

What TDS applies when an NRI sells property in India?

Sec 195Sec 54Sec 48Sec FEMAVerified 2026-08-11

When an NRI sells Indian property, the buyer deducts TDS under section 195 on the full sale consideration — 20% for LTCG and 30% for STCG — unless you obtain a lower/no-deduction certificate on Form 13 before the sale. Section 54 reinvestment in one residential house (₹10 crore cap) still works for NRIs, and proceeds are repatriable up to USD 1 million a year with Form 15CA/CB.

Your legitimate options

Every route the statute actually gives you — with its condition, cap and deadline.

Route	Condition	Cap / deadline
Buyer's TDS on consideration	The buyer deducts TDS u/s 195 on the FULL SALE CONSIDERATION, not the gain: 20% for LTCG, 30% for STCG	Rates apply to the consideration unless a lower certificate is obtained
Form 13 for lower TDS	Apply for a lower/no TDS certificate on TRACES before the sale closes, so the buyer deducts at the certified rate	Must be obtained before the transaction
Section 54 reinvestment	LTCG on the property can be reinvested in one residential house within 2 years (or 1 before), with the ₹10 crore cap	Exemption up to ₹10 crore; gains must be parked in CGAS by the ITR due date

The #1 trap

The buyer deducts TDS on the sale consideration, not the gain — a ₹2 crore sale with a ₹50 lakh gain can attract TDS on ₹2 crore unless a Form 13 lower certificate is obtained first. Also, NRIs can still use section 54 with the ₹10 crore cap and CGAS, and sale proceeds are repatriable up to USD 1 million a year via Form 15CA/CB.

The decision path

Follow it top to bottom — the first condition that matches is your answer.

IF you sell Indian property as an NRI → the buyer deducts TDS u/s 195 on the sale consideration, not the gain.
IF the holding is over 24 months → the TDS rate is 20% (LTCG); within 24 months it is 30% (STCG).
IF you expect no tax or lower tax → obtain a Form 13 lower-deduction certificate on TRACES BEFORE the sale closes.
IF you reinvest the gain in one residential house within the section 54 window → the gain is exempt up to the ₹10 crore cap.
IF you cannot reinvest before filing → park the gain in CGAS by the ITR due date.
IF you repatriate the proceeds → the USD 1 million annual limit applies with Form 15CA/CB. [VERDICT: TDS on consideration — get Form 13 before closing.]

Worked example

Farida, NRI in London selling her Bengaluru flat

Farida, an NRI in London, sells her Bengaluru flat in January 2026 for ₹1,80,00,000. She bought it in 2010 for ₹45,00,000, so the holding is over 24 months and the gain is long-term. Under section 195, the buyer must deduct TDS on the FULL sale consideration of ₹1,80,00,000 at the LTCG rate of 20%, which is ₹36,00,000 — even though her actual tax on the long-term gain of ₹1,35,00,000 at 12.5% is only ₹16,87,500. Without a lower certificate, the buyer withholds ₹36,00,000 and Farida reclaims the excess at filing. Instead, she applies for a Form 13 certificate on TRACES before the sale closes, showing her cost of ₹45,00,000 and the actual 12.5% rate, and the AO issues a certificate at a lower rate, so the buyer deducts closer to the true liability. Farida plans to reinvest ₹1,20,00,000 in a new house in Pune within two years, and under section 54 the gain reinvested is exempt up to the ₹10 crore cap, so she deposits the intended amount in the Capital Gains Account Scheme by her ITR due date to protect the exemption. If she does not reinvest, the LTCG is taxed at 12.5% with no indexation after Finance Act 2024. The sale proceeds, net of the TDS, are repatriable to London up to USD 1 million per financial year, with Form 15CA filed online and a Form 15CB certificate from a chartered accountant. Farida keeps the sale deed, the buyer's TDS certificate and the reinvestment documents. A quick call with us dials in the final figure. Farida also confirms that the buyer's TDS under section 195 is on the full sale consideration and is not reduced by her cost, so the withholding can exceed her true liability until a Form 13 certificate is obtained. The Form 13 application on TRACES requires her PAN, the property details and the expected gain computation, and the certificate is issued for a specific transaction. If the sale completes before the certificate is issued, the buyer must deduct at the statutory rate and Farida claims the excess as a refund at filing. The section 54 exemption is available to NRIs, and the ₹10 crore cap applies from AY 2024-25, so a reinvestment above the cap leaves the excess gain taxable. A quick call with us dials in the final figure.

Claims influencers make about this moment

Trap“Once you are an NRI, all Indian income is tax-free”
Partly true“Sell your house, buy another, capital gains fully exempt under Section 54”

Questions people actually ask

How much TDS does the buyer deduct on an NRI property sale?

Under section 195, the buyer deducts TDS on the full sale consideration — 20% for LTCG and 30% for STCG — unless a Form 13 lower-deduction certificate is obtained first.

Can an NRI claim section 54?

Yes — reinvesting LTCG in one residential house within the section 54 window exempts the gain up to the ₹10 crore cap, with CGAS protection if reinvestment is pending.

How do I repatriate the sale proceeds?

Up to USD 1 million per financial year with Form 15CA and a Form 15CB certificate from a chartered accountant, through banking channels.

Capital Gains Calculator →TDS Rate Finder →Or talk to us about your numbers →

Sections: 195, 54, 48, FEMA · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).