Selling Property in India as an NRI: Taxes, TDS & Repatriation

Selling property as an NRI triggers capital gains tax and TDS obligations. LTCG (held >2 years) taxed at 12.5% without indexation (post-July 2024); STCG at slab rates. Buyer deducts TDS (30% STCG, 12.5% LTCG + surcharge/cess). Repatriation up to USD 1M/FY after taxes.

This guide covers tax calculation, TDS, exemptions, repatriation and tips. For sale agreement, TDS certificate or repatriation, consult experts at ezyLegal.

Capital Gains Tax for NRIs

STCG (held ≤2 years): Taxed at slab rates (up to 30% + cess).

LTCG (held >2 years):

• Pre-July 23, 2024 purchase: 20% with indexation.
• Post-July 23, 2024 purchase: 12.5% without indexation.

Cost: Original purchase + improvements + transfer expenses. Holding includes donor’s period for gifted/inherited.

TDS:

• Buyer deducts: 30% STCG, 12.5% LTCG + surcharge/cess (effective 13–14.95%).
• Deposit by 7th next month.
• File Form 26Q quarterly.
• Issue Form 16A to NRI.

Lower/Nil TDS Certificate

Apply via Form 13 on TRACES portal (faceless):

• Provide PAN, passport, ITR, sale agreement, cost proofs, valuation.
• AO issues certificate if liability lower.
• Buyer deducts per certificate.

Excess TDS refundable via ITR.

Repatriation of Sale Proceeds

Limits:

• NRE/FCNR-purchased: Full repatriation (2 residential properties lifetime limit).
• NRO/resident-purchased: USD 1M/FY.
• Inherited/gifted: USD 1M/FY.

Process:

1. File Form 15CA/15CB.
2. Get CA certificate.
3. Submit to authorized bank.

Exemptions to Save Tax

Section	Eligibility	Limit/Conditions
54	LTCG from residential house	Reinvest in new residential house in India (₹10 crore cap)
54EC	LTCG from any asset	Invest in NHAI/REC bonds (₹50 lakh max)
54F	LTCG from non-residential asset	Reinvest full proceeds in residential house

Real-World Examples

1. Post-2024 Sale: Flat bought 2025 sold 2026, LTCG 12.5% no indexation.
2. Lower TDS: Applied Form 13, TDS reduced to 5%.
3. Repatriation: NRO sale proceeds, USD 1M transferred; rest next FY.
4. Exemption: LTCG invested in Section 54EC bonds, tax saved.
5. Inherited Property: Inherited house sold, USD 1M repatriated.

Practical Tips

• Time sale for LTCG.
• Use RERA-compliant agents.
• Check Form 26AS for TDS.
• Plan reinvestment early.
• Get CA certificate for repatriation.
• File ITR-2 timely.

Frequently Asked Questions

Q1. What is the capital gains tax rate for NRIs selling property in India?

Ans1. STCG (held ≤2 years): slab rates (up to 30% + cess). LTCG (held >2 years): 12.5% without indexation (post-July 2024); 20% with indexation if pre-July 2024.

Q2. What is the TDS rate when an NRI sells property in India?

Ans2. Buyer deducts TDS: 30% for STCG, 12.5% for LTCG + surcharge/cess (effective 13–14.95% based on sale value).

Q3. Can an NRI get a lower or nil TDS certificate on property sale?

Ans3. Yes, apply via Form 13 on TRACES portal with sale agreement, cost proofs, valuation. AO issues if liability lower; buyer deducts per certificate.

Q4. How can NRIs repatriate proceeds from property sale in India?

Ans4. Up to USD 1M/FY from NRO (after taxes); full for NRE/FCNR-purchased (2 residential limit). File Form 15CA/15CB + CA certificate.

Q5. What exemptions can NRIs claim to save tax on property sale?

Ans5. Section 54 (reinvest in new residential house, ₹10 crore cap); Section 54EC (NHAI/REC bonds, ₹50 lakh max); Section 54F (full proceeds in residential house).

Q6. What documents are required for NRIs to apply for lower TDS certificate?

Ans6. PAN, passport, ITR/26AS, sale agreement, purchase deed, cost proofs, circle rate, valuation report, buyer TAN, capital gains computation.

Q7. How is capital gains calculated for an NRI selling property in India?

Ans7. Sale price minus (purchase price + improvements + transfer expenses). Holding includes donor’s period for gifted/inherited. Cost pre-2001: purchase price or FMV April 1, 2001.

Q8. Can NRIs sell property purchased while resident and repatriate full proceeds?

Ans8. Yes, but repatriation from NRO limited to USD 1M/FY; excess requires RBI approval.

Q9. What happens if the buyer fails to deduct TDS on property sold by NRI?

Ans9. Buyer liable for TDS amount + interest/penalties; can block NRI repatriation.

Q10. Can NRIs claim exemption under Section 54 if new property sold within three years?

Ans10. No, exemption withdrawn; original LTCG becomes taxable.

Q11. Is RERA compliance needed when NRI sells property?

Ans11. Yes, if resale of under-construction project, ensure RERA registration and disclosures.

Q12. How to repatriate proceeds from inherited property sale?

Ans12. USD 1M/FY after taxes; Form 15CA/15CB + CA certificate; no 2-property limit.

Q13. What is Form 15CA/15CB for repatriation?

Ans13. Form 15CA online declaration; Form 15CB CA certificate, mandatory for capital repatriation.

Q14. Can NRIs use Section 54F for non-residential property sale?

Ans14. Yes, reinvest full proceeds in residential house; conditions apply.

Q15. What is the TDS rate for NRI property sale?

Ans15. 30% STCG, 12.5% LTCG + surcharge/cess (effective 13–14.95%).

Q16. How long to hold property for LTCG?

Ans16. >2 years from purchase date.

Q17. What if property bought pre-2001?

Ans17. Cost: purchase price or FMV April 1, 2001 (higher).

Q18. Joint property sale by NRIs?

Ans18. TDS on each share; repatriation per owner rules.

Q19. Advance tax on capital gains for NRIs?

Ans19. Yes, if liability >₹10,000.

Q20. How to file ITR for property sale as NRI?

Ans20. Use ITR-2; report gains under capital gains head; claim exemptions.