NRI Selling Property in India: Tax, TDS, Repatriation and How to Bring Money Home
THE EDGE — Direct Answer
When an NRI sells property in India, the buyer must deduct TDS before paying — approximately 13–18% for long-term capital gains (property held 24+ months) or 30%+ for short-term gains. The most important step is applying for a Lower Deduction Certificate (Form 13) before the sale to prevent excess TDS from being locked up for 8–12 months in a refund cycle. After the sale, file an Indian Income Tax Return to claim Section 54F exemption (reinvest in residential property) or Section 54EC (invest up to ₹50 lakh in NHAI/REC bonds within 6 months). To repatriate sale proceeds abroad, submit Form 15CA and 15CB to your Indian bank — up to USD 1 million per year from an NRO account, unlimited from an NRE account. Total processing typically takes 5–15 business days.
TL;DR — KEY TAKEAWAYS
- The buyer must deduct TDS of ~13–18% (LTCG) or 30%+ (STCG) before paying an NRI seller.
- Apply for a Lower Deduction Certificate (Form 13) BEFORE the sale to avoid locking up cash in excess TDS.
- Repatriate via Form 15CA/15CB — up to USD 1M/year from an NRO account, unlimited from an NRE account.
- File an Indian ITR even if TDS was fully deducted, to claim refunds and Section 54F/54EC exemptions.
When an NRI sells property in India, the buyer must deduct TDS (Tax Deducted at Source) at 12.5–23% before paying — and the NRI must file an Indian Income Tax Return to claim any excess refund. After tax compliance, repatriation of sale proceeds to your overseas account is governed by RBI rules. This guide walks through the entire process — from sale to wire transfer abroad.
Reading time: 13 minutes | Last updated: July 2026 | Author: Girish Chhalwani, Founder & CEO, THE EDGE Developments
The most common mistake NRI property sellers make is not applying for a Lower TDS Certificate before the sale. If the buyer deducts 20–23% TDS at source and the NRI’s actual tax liability is only 12.5%, they must wait 8–12 months for an ITR refund. A Lower Deduction Certificate from the Income Tax Department, applied for before the sale, allows TDS to be deducted at the actual liability rate — dramatically improving cash flow. — Source: Income Tax Department Circular, NRI TDS Guidelines 2024
What is the step-by-step process for an NRI to sell property in India?
Five steps: calculate your capital gains tax, apply for a Lower TDS Certificate before selling, execute the registered sale, file your Indian ITR, and repatriate the proceeds using Form 15CA/15CB. Doing them in this order protects your cash flow.
Step 1: Determine Capital Gains Tax Liability
Before anything else, calculate what you owe:
- LTCG (held 24+ months): 12.5% flat rate on gains (post-Budget 2024); no indexation for properties acquired after July 23, 2024
- STCG (held under 24 months): Taxed at applicable income slab rate (30% at highest bracket + surcharge + cess)
- Add surcharge (10–37% of tax depending on gain amount) and cess (4%) to arrive at effective rate
Step 2: Apply for Lower TDS Certificate (Form 13) — Do This First
Before the sale, apply to the Income Tax Department for a Lower Deduction Certificate under Section 197. This certificate specifies the TDS rate applicable based on your actual tax liability — preventing over-deduction.
Timeline: Apply 30–60 days before expected sale date. Income Tax Department typically processes in 2–4 weeks.
Documents required: PAN, calculation of capital gain, purchase documents, sale agreement draft
Without this certificate: buyer deducts TDS at default NRI rates (significantly higher than actual liability in many cases).
Step 3: Execute the Sale
- Agree on sale price and terms with buyer
- Execute registered Agreement for Sale (AFS)
- Buyer deducts TDS (as per Lower Deduction Certificate or standard rates) and deposits with Income Tax Department via Challan 26QB
- Buyer provides TDS certificate (Form 16B) to seller
- Execute and register Sale Deed at Sub-Registrar office in India (NRI can attend in person or via registered POA)
Step 4: File Indian Income Tax Return (ITR)
NRI sellers must file ITR in India for the financial year of sale — even if all tax was deducted at source. Benefits of filing:
- Claim refund of any excess TDS deducted
- Claim Section 54F exemption (if reinvesting in residential property)
- Claim Section 54EC exemption (if investing in NHAI/REC bonds)
- Provide documentation for repatriation clearance
File ITR before July 31 of the assessment year following the sale. You can file online through incometax.gov.in.
Step 5: Repatriate Funds from India to Abroad
What can be repatriated:
- Sale proceeds from the sale of immovable property (up to 2 residential properties per NRI per year)
- Repatriation limit: USD 1 million per financial year for NRO account (which includes all sources)
- From NRE account: freely repatriable with no upper limit
Documents required for repatriation:
- Form 15CA (self-declaration) and Form 15CB (CA certificate) — uploaded to Income Tax portal
- Proof of property ownership and sale
- Evidence that TDS was deducted/paid (Form 16B / Challan 26QB receipt)
- ITR filing acknowledgement for the relevant year
- Original FIRC(s) from the purchase — proving original funds were remitted from abroad
What TDS rates apply to NRI property sellers in 2026?
For LTCG, TDS runs ~13% to ~18% of the sale value depending on the surcharge band; for STCG it starts at 30% and can exceed 42%. A Lower Deduction Certificate reduces this to your actual liability.
| Sale Type | Standard TDS Rate | Effective Rate with Surcharge & Cess |
|---|---|---|
| LTCG (held 24+ months, sale consideration ≤₹50L) | 12.5% | ~13.0% |
| LTCG (sale consideration ₹50L–₹1Cr) | 12.5% + 10% surcharge | ~14.3% |
| LTCG (sale consideration ₹1Cr–₹2Cr) | 12.5% + 15% surcharge | ~15.0% |
| LTCG (sale consideration ₹2Cr–₹5Cr) | 12.5% + 25% surcharge | ~16.3% |
| LTCG (sale consideration above ₹5Cr) | 12.5% + 37% surcharge | ~17.9% |
| STCG (held less than 24 months) | 30% | ~31.2% to 42.7% with max surcharge |
A Lower Deduction Certificate can reduce these rates to actual liability. Consult a chartered accountant before any NRI property sale.
What exemptions can an NRI seller claim?
NRIs can claim the same LTCG exemptions as residents: Section 54F (reinvest the full sale consideration in an Indian residential property) and Section 54EC (invest up to ₹50 lakh in NHAI/REC bonds within 6 months).
Section 54F: Reinvest in Residential Property
Same as for residents: reinvest entire net sale consideration (not just gain) in a residential property within 1 year before or 2 years after sale (purchase) or 3 years (construction). Exempts entire LTCG. The new residential property must be in India.
Section 54EC: Infrastructure Bonds
Invest up to ₹50 lakh in NHAI or REC bonds within 6 months of sale. Exempt LTCG up to ₹50 lakh. 5-year lock-in period.
Can NRIs sell agricultural land they inherited?
Yes — NRIs who inherited agricultural land (or received it as a gift from a resident Indian) can sell it to a resident Indian only (not to another NRI). The sale proceeds can be credited to NRO account and repatriated within the USD 1 million annual limit after tax compliance.
Frequently Asked Questions
What TDS is deducted when NRI sells property in India?
For LTCG (held 24+ months): TDS ranges from ~13% to ~18% depending on sale value, due to surcharge on higher amounts. For STCG (held under 24 months): TDS at 30% plus surcharge and cess, which can reach 42%+. Apply for a Lower Deduction Certificate before sale to avoid over-deduction.
How does an NRI bring money to the US/UK/UAE after selling property in India?
File Form 15CA and 15CB with Income Tax portal. Submit to your Indian bank (NRO account) along with sale documents, Form 16B, ITR acknowledgement, and original FIRC from purchase. The bank will then execute the international wire transfer. Processing typically takes 5–15 business days.
How much money can an NRI repatriate from sale of property in India per year?
From an NRO account: up to USD 1 million per financial year (covering all sources including property sale proceeds). From an NRE account: unlimited repatriation (if original purchase was funded from NRE account or foreign remittance). There is no restriction on repatriation from NRE accounts.
Does an NRI need to file ITR in India when selling property?
Yes — if any capital gain arises from the sale, the NRI must file an ITR in India for that financial year. Even if TDS has been fully deducted, filing is necessary to claim exemptions (Section 54F, 54EC), claim any refund on excess TDS, and comply with Indian tax law.
About the Author — Girish Chhalwani
Girish Chhalwani is the Founder & CEO of THE EDGE Developments, a RERA-registered plotted-development company in the Karjat–MMR corridor. With 20+ years in Maharashtra land acquisition, NA conversion, and infrastructure-led land investment, he advises HNI and NRI investors on land strategy near Mumbai.
Related Reading
Planning to Buy or Sell as an NRI?
THE EDGE Developments helps NRI investors buy, hold, and exit RERA-registered land near Mumbai with full tax and repatriation documentation. Speak with our team for a remote consultation.
This article is general information, not tax advice. Consult a qualified chartered accountant for your specific situation.
