NRI Property Sale in India: Repatriation & TDS Rules Explained (2026)

How repatriation works when an NRI sells property in India

Repatriation of funds from an Indian property sale is governed by FEMA (Foreign Exchange Management Act, 1999) and the Foreign Exchange Management (Remittance of Assets) Regulations. The rules are not about whether you can send money abroad — you generally can — but about how much you can send in a given period, and what documentation is required.

The starting point is always: which account funded the original purchase? This one question determines your repatriation route and whether you face a cap.

The NRE route vs the NRO route — repatriation limits compared

NRE/FCNR-funded property: freely repatriable

If you purchased the property using funds from an NRE (Non-Resident External) or FCNR (Foreign Currency Non-Resident) account — both of which hold foreign earnings converted to INR or held in foreign currency — the sale proceeds are freely repatriable without RBI permission, subject to two conditions:

• This freedom applies to a maximum of two residential properties. If you are repatriating from a third or subsequent property sale, prior RBI approval is required.
• All applicable taxes (capital gains tax, TDS) must have been paid or duly deducted before remittance.

"Freely repatriable" means there is no annual cap on the amount — you can send the full proceeds (after tax) abroad in a single financial year, whether that is Rs 50 lakh or Rs 10 crore. The bank's authorised-dealer branch will remit on presentation of the required documents (Forms 15CA/15CB, tax clearance, etc.) without needing RBI approval for each transaction.

If you funded the original purchase from an NRE account but the property sale proceeds land in your NRO account (which is common, as buyers in India typically pay into an NRO account), you can still claim the NRE-route repatriation benefit — but you need to document the original NRE source clearly to your bank. Keep all original payment records from the time of purchase.

NRO/rupee-funded property: capped at USD 1 million per financial year

If you purchased using funds from an NRO (Non-Resident Ordinary) account — which holds rupee income earned in India, rent received, or gifts/inheritance — the sale proceeds land in the NRO route and repatriation is subject to the USD 1 million per financial year cap (1 April to 31 March).

This cap covers all outward remittances from NRO accounts in that financial year — not just property sale proceeds. If you also remit rental income or other NRO credits during the same year, those count toward the same USD 1 million limit.

Inherited property and gifted property

Property inherited from a relative in India or received as a gift is treated as NRO-route by default — since the funds that originally purchased it were not your foreign earnings. Repatriation in such cases follows the NRO/USD 1 million per year route. Inherited property may also carry additional documentation requirements (succession certificate, probate, etc.) before the bank will process the remittance.

TDS on the sale under Section 195 — the mechanic every NRI seller must understand

This is what makes Section 195 TDS so significant for NRI property sellers — and so different from what most people expect. Let us be precise:

• For a resident Indian selling property with a stamp duty value above Rs 50 lakh, the buyer deducts 1% TDS under Section 194-IA — on the sale price.
• For an NRI selling property, there is no Rs 50 lakh threshold. TDS under Section 195 applies regardless of the sale price, and the rate is dramatically higher — 12.5% or 30% of the full sale consideration.

Consider what this means in practice: if you sell a property for Rs 1 crore with a cost of acquisition (after indexation, if applicable) of Rs 60 lakh, your actual capital gain is Rs 40 lakh. But if the buyer deducts TDS at 12.5% of the full Rs 1 crore sale price, they withhold Rs 12.5 lakh (plus surcharge and cess — see below). Your actual LTCG tax on Rs 40 lakh is around Rs 5–6 lakh. You are owed roughly Rs 6–7 lakh in excess TDS, which you can reclaim by filing an income tax return in India — but only after the financial year closes. This is why the Form 13 Lower Deduction Certificate is so valuable (covered below).

LTCG and STCG tax rates — the 24-month holding period rule

Long-Term Capital Gains (LTCG) — property held more than 24 months

For immovable property (land, residential or commercial buildings), the classification as long-term is determined by a holding period of more than 24 months from the date of acquisition. If you have held the property for more than 24 months, any gain is Long-Term Capital Gain.

The Finance (No. 2) Act 2024 (effective 23 July 2024) changed the LTCG rate for property:

• Sales on or after 23 July 2024: LTCG on immovable property is taxed at 12.5% without indexation benefit.
• For resident individuals, a transitional option was provided (12.5% without indexation vs 20% with indexation, whichever is lower) for property acquired before 23 July 2024. The applicability of this transitional option to NRIs and the precise computation should be confirmed with your CA, as the rules have specific conditions.

For TDS purposes under Section 195, the buyer applies 12.5% on the full sale consideration as the base TDS rate for LTCG (before surcharge and cess), unless a Lower Deduction Certificate specifies a lower rate.

Short-Term Capital Gains (STCG) — property held 24 months or less

If the property has been held for 24 months or less, the gain is Short-Term Capital Gain, taxed at 30% (the applicable rate for NRIs under Section 115E / general slab). For TDS purposes, the buyer deducts at 30% of the full sale consideration — plus surcharge and cess. The STCG scenario is significantly more expensive, which is why NRIs should be aware of the 24-month holding threshold when deciding the timing of a sale.

Surcharge and cess — the full effective TDS rate calculation

The TDS rate of 12.5% (LTCG) or 30% (STCG) is not the final number. Surcharge and health & education cess are added on top. For NRI sellers, surcharge applies based on total income thresholds:

Surcharge slabs for NRIs (FY 2025-26)

Health and Education Cess is 4% on (tax + surcharge).

For a practical illustration: an NRI seller with a long-term property sale consideration of Rs 1.5 crore would likely fall in the Rs 1–2 crore total income bracket. The TDS math on a Rs 1.5 crore sale under LTCG without a Lower Deduction Certificate would be:

• LTCG TDS base: 12.5% × Rs 1,50,00,000 = Rs 18,75,000
• Surcharge at 15% on tax: Rs 18,75,000 × 15% = Rs 2,81,250
• Cess at 4% on (tax + surcharge): (Rs 18,75,000 + Rs 2,81,250) × 4% = Rs 86,250
• Total TDS deducted: approximately Rs 22,42,500 — on the full sale consideration before the buyer pays you.

If the actual capital gain is Rs 40 lakh and the actual tax on that gain is around Rs 5–6 lakh (plus applicable surcharge/cess), the excess TDS is roughly Rs 16–17 lakh — recoverable by filing an Indian ITR, but locked up for months. Consult your CA on the precise calculation for your income and property.

Form 13 and the Lower/Nil Deduction Certificate — Section 197

How the Form 13 application works

The NRI seller (not the buyer) files a Form 13 application with the Income Tax Department — specifically with the Assessing Officer having jurisdiction over the seller's PAN. The application:

• Describes the property, the expected sale consideration, and the estimated capital gains computation (purchase price, indexed cost if applicable, any exemptions claimed under Section 54 etc.)
• Calculates the actual tax liability on the gain
• Requests that the AO issue a certificate specifying a lower TDS rate — ideally matching the estimated actual tax liability as a percentage of the sale price

The AO reviews the application, may ask for additional documents, and issues (or declines) the certificate. The certificate is time-bound and deal-specific — it specifies the property, the buyer, and the reduced rate for that particular transaction.

Timeline and practical points

• File at least 4–8 weeks before the sale closes. The AO processing time varies; it can be faster in some jurisdictions and slower in others. If you wait until you are signing the sale agreement, it is too late — the buyer has an obligation to deduct at the full rate without a valid certificate in hand.
• The certificate must be presented to the buyer before the first payment. If the buyer has already deducted TDS at the full rate in an earlier instalment (such as the token advance or first tranche), the certificate only covers future payments — the TDS already deducted is not reversed; you claim refund for the excess via ITR.
• The application is filed online via the Income Tax portal. Your CA handles this process — it requires PAN and an active account on the portal.
• Not every AO grants the certificate quickly or at all. The outcome depends on your specific computation being clear and defensible. A CA experienced in NRI transactions is essential here.

Worked example — the difference Form 13 makes

Let us walk through a concrete scenario to make the numbers tangible. This is for illustration only — your actual numbers depend on your specific property, holding period, income, and applicable DTAA. Consult your CA for your individual situation.

Scenario: NRI sells a residential property

Without Form 13: TDS deducted by buyer on full sale consideration

With Form 13: Actual tax on the real capital gain

Difference: approximately Rs 7.87 lakh — locked in TDS without Form 13, freed up with it.

The Rs 7.87 lakh excess TDS is not lost forever — you file an Indian income tax return for the relevant financial year and claim the refund. But the refund process can take 6–18 months, requires an active Indian ITR filing, and requires you to have a valid PAN and a bank account in India to receive the refund. If your only Indian account (NRO) is being closed after the sale, the refund logistics become complicated. Form 13 avoids this entirely by getting the TDS right at source. Consult your CA.

DTAA relief — avoiding double taxation via Tax Residency Certificate + Form 10F

How DTAA works for property gains

Most DTAA treaties provide that gains from immovable property are taxable in the country where the property is situated — which means India, in this case. However, the DTAA typically specifies the rate of tax, and crucially, under most DTAAs, Indian surcharge and cess are not applicable when the DTAA rate is applied instead of the domestic rate.

What this means practically:

• Your LTCG on the Indian property is taxed in India at the DTAA-specified rate (often the same 12.5% base, but without surcharge and cess added on top)
• In your country of residence, you declare the India-taxed gain and claim a credit for the Indian tax paid — so you are not taxed again on the same income
• The net effect can save 10–41% additional tax depending on your surcharge bracket

Documents required to claim DTAA benefit

• Tax Residency Certificate (TRC): Issued by the tax authority of your country of residence (e.g., Federal Tax Authority in UAE, HMRC in UK, IRS in USA). It confirms that you are a tax resident of that country in the relevant period. The process and form vary by country — start this process early, as TRC issuance can take weeks.
• Form 10F: Filed online on the Indian Income Tax portal (income tax portal login required). Form 10F captures your personal details, PAN, country of residence, TRC details, and the period for which the certificate is valid. Once filed, it generates a filled PDF that is submitted to the buyer as evidence of your DTAA claim.
• Self-declaration: A declaration by the NRI seller stating that they are eligible for DTAA benefits for the relevant financial year.

The buyer then applies the DTAA rate (without surcharge/cess) when deducting TDS, rather than the full domestic rate. This can be combined with a Form 13 application for a further reduction if the actual gain is less than the sale consideration.

The buyer's obligations — what your buyer must do (and what happens if they don't)

When buying property from an NRI, the buyer bears significant legal responsibility under Section 195. As an NRI seller, understanding the buyer's obligations helps you manage the transaction correctly and avoid disputes.

What the buyer must do

1. Obtain a TAN (Tax Deduction Account Number) The buyer must have a TAN — a 10-digit alphanumeric number issued by the Income Tax Department — to be authorised to deduct and deposit TDS. Without a TAN, the buyer cannot legally complete the TDS process. If the buyer (a resident individual) does not have a TAN, they must apply for one before completing the transaction. This is often the first bottleneck in NRI property transactions.
2. Deduct TDS at the applicable rate before every payment TDS must be deducted from every payment to the NRI seller — including the token advance, interim instalments, and the final payment. The rate applies on each instalment, not just the final payment. If the NRI has a Lower Deduction Certificate (Form 13) or DTAA TRC + Form 10F, the buyer applies the certified rate instead of the standard rate.
3. Deposit TDS via Challan 281 within 7 days of the end of the month The deducted TDS must be deposited with the government using Challan 281 (for TDS/TCS payments) via net banking or the bank branch. It must be deposited within 7 days of the end of the month in which TDS was deducted — or by 30 April for March deductions.
4. File TDS return in Form 27Q Unlike the Section 194-IA (resident seller) process — which uses a simplified Form 26QB — TDS on payments to NRIs (Section 195) requires filing of Form 27Q, the quarterly TDS return for payments to non-residents. This is a more complex filing than the resident-transaction equivalent and often requires a CA or a TDS return filing agent.
5. Issue Form 16A to the NRI seller After filing the TDS return, the buyer generates and provides Form 16A — the TDS certificate — to the NRI seller. The NRI uses this to claim the TDS credit in their Indian income tax return and to reconcile TDS in Form 26AS / AIS on the IT portal.

What happens if the buyer fails to deduct TDS

A buyer who fails to deduct TDS when purchasing from an NRI is treated as an "assessee in default" under Section 201 of the Income Tax Act. Consequences include:

• Interest at 1% per month on the shortfall from the date TDS should have been deducted to the date it was actually deducted
• Interest at 1.5% per month from the date of deduction to the date of deposit (for late deposit)
• Penalty under Section 271C equal to the amount of TDS not deducted
• Prosecution in serious cases of wilful non-deduction

For an NRI seller, it is worth proactively briefing your buyer (and their legal counsel) about Section 195 obligations, particularly if the buyer is a first-time property buyer who may not be aware of the NRI-specific rules. A buyer who is unaware of TDS obligations may inadvertently create legal complications for both parties.

Forms 15CA and 15CB — the gateway to repatriation

Form 15CA — the self-declaration

Form 15CA is filed online at the Income Tax portal (incometax.gov.in) by the remitter — in this context, typically the NRI seller themselves (or their CA acting with a PoA). The form captures:

• Details of the remitter and the recipient (in this case, your overseas bank account)
• Nature of the remittance (sale of property, repatriation of proceeds)
• Amount in INR and foreign currency equivalent
• Whether DTAA benefit is being claimed
• Tax deducted / paid details

Form 15CA has four parts (Part A, B, C, D) depending on the nature and amount of the remittance. For property sale proceeds, Part C is typically applicable (remittances where a CA certificate is required). Your CA will advise on the correct part for your situation.

Form 15CB — the CA certificate

Form 15CB is issued by a Chartered Accountant who certifies:

• The description and nature of the transaction
• That the applicable tax has been computed correctly
• That TDS has been deducted or that the payment is not taxable or is covered by a DTAA
• The amount of TDS and the rate applied

The CA signs and submits Form 15CB electronically on the IT portal, then provides the signed certificate to the remitter. The remitter then completes Form 15CA (referencing the 15CB) and submits it. Both documents are presented to the authorised-dealer bank to initiate the foreign remittance.

Banks typically require these documents before initiating the outward remittance. Build the 15CA/15CB preparation into your closing timeline — it typically takes 1–2 weeks after all tax computations and TDS deposits are confirmed.

Documents checklist and the realistic transaction timeline

Documents the NRI seller needs to assemble

• Property documents: Original sale deed / allotment letter (evidencing purchase date and cost), all prior title documents, encumbrance certificate, NOC from society/authority if applicable
• Identity / tax documents: Valid passport, PAN card (mandatory — without PAN, TDS is at maximum marginal rates with no DTAA benefit), Form 10F (if claiming DTAA), Tax Residency Certificate (if claiming DTAA)
• Bank documents: NRE/NRO account statements showing the original purchase payment (to prove source of funds for repatriation route), current NRO/NRE account details for receiving sale proceeds
• TDS documents: Form 16A issued by the buyer after TDS deposit, Challan details (for reconciliation)
• Repatriation documents: Form 15CB (from your CA), Form 15CA (filed online), foreign inward remittance certificate from original purchase (if NRE-funded)
• Form 13 certificate: If obtained, present this to the buyer before any payment is made

Realistic transaction timeline for an NRI selling property

Most NRI sellers underestimate how long a clean, compliant transaction takes. Here is a realistic view:

1. Decide to sell & engage a CA — Week 0 The moment you decide to sell, engage a CA experienced in NRI taxation. Do not wait until you find a buyer. The CA needs to review your property documents, determine LTCG/STCG, assess DTAA eligibility, and begin the Form 13 application preparation.
2. Execute a Power of Attorney (if managing from abroad) — Week 0–2 If you are not coming to India for the sale, execute a PoA authorising a trusted representative to sign the sale deed, collect the sale proceeds, and interact with the Income Tax Department and bank on your behalf. Apostille (Hague countries) or consulate-attest (Gulf countries). Courier the original to India.
3. Obtain Tax Residency Certificate — Week 0–4 If claiming DTAA benefit, apply for the TRC from your country's tax authority immediately. This can take 2–6 weeks depending on the country. File Form 10F on the Indian IT portal once TRC is in hand.
4. File Form 13 application — Week 1–2 CA files Form 13 online with the jurisdictional AO. Processing time varies — anywhere from 2 weeks to 6 weeks. The AO may ask for additional documents. If the certificate arrives before the first payment, the buyer uses the lower rate throughout. Start this immediately after deciding to sell.
5. Find a buyer & negotiate — Week 2–8 Marketing, offers, negotiation. An NRI seller engaging Vidastu as their advisory partner has access to qualified buyer networks and our on-ground team to facilitate site visits and documentation.
6. Sale agreement / token advance — Week 4–10 Sign the Agreement to Sell. If the Form 13 certificate is in hand, provide it to the buyer now. The buyer deducts TDS on the token advance (or, if Form 13 is not yet received, deducts at the full rate on this first payment — the certificate applies to future payments). Crucially, TDS must be deducted even on the token advance.
7. Registration (sale deed) — Week 8–16 Sale deed is registered at the sub-registrar's office. Your PoA holder signs on your behalf. Balance payment (minus TDS) is received into your NRO account. Buyer deposits TDS with the government and provides Challan details.
8. TDS certificate (Form 16A) and repatriation — Week 12–20 After the buyer files the Form 27Q TDS return, Form 16A is generated. Your CA prepares Form 15CB. You file Form 15CA. Bank processes the outward remittance based on these documents. The remittance is the final step — do not assume it is immediate post-sale-deed.
9. File Indian income tax return — by due date of following year File an Indian ITR for the financial year of the sale to report the capital gain, claim any Section 54 exemption, and claim a refund of excess TDS (if any). ITR filing due date for NRIs is typically 31 July (or extended as notified). If you have outstanding TDS to claim, a CA must handle this filing to ensure the refund processes correctly.

Common mistakes NRI sellers make — and how to avoid them

1. Not engaging a CA until after finding a buyer

The single most expensive mistake. Form 13 applications take weeks; TRC from some countries takes 4–6 weeks; PoA authentication takes 1–3 weeks. If you wait until you have a signed agreement to sell, these cannot be completed in time — and you end up with full TDS deducted on the entire sale consideration. The cost of this delay is often Rs 5–15 lakh in locked TDS that takes over a year to refund.

2. Assuming no TDS on token advance or small payments

There is no threshold below which Section 195 TDS does not apply for NRI property sales. Unlike Section 194-IA (for resident sellers, where TDS applies only above Rs 50 lakh), Section 195 has no such floor. Every payment — including a Rs 2 lakh token advance — technically attracts TDS deduction. Buyers often do not know this, and if TDS is missed on early instalments, it creates complications at the registry stage.

3. Not having PAN

An NRI seller without a PAN faces punitive TDS rates — TDS is deducted at the maximum marginal rate (which can exceed 30% for income in higher brackets), without any DTAA benefit or Lower Deduction Certificate option. Apply for PAN immediately if you do not have one. The application can be done online from abroad (Form 49A for Indian citizens).

4. Closing NRO account before receiving the TDS refund

If you are returning the funds abroad and planning to close your Indian NRO account, timing matters. The excess TDS refund from your ITR filing (which may come 6–18 months after the sale) will be credited to your Indian bank account. If that account is closed, the refund has nowhere to go and requires manual intervention with the Income Tax Department — a slow process. Keep your NRO account active until at least one full year after the financial year of the sale.

5. Not documenting the original NRE source of funds

If you purchased using NRE funds but cannot prove it at the time of sale (because old account statements are gone), your bank may treat the repatriation as NRO-route — subjecting you to the USD 1 million annual cap. For a property worth Rs 5–10 crore, this means multiple years to fully repatriate. Keep all records from the original purchase — payment challans, bank statements showing the NRE debit, acknowledgments from the developer or authority.

6. Expecting the buyer to handle everything

The TDS obligations legally rest on the buyer, but the consequences of an incorrect TDS deduction fall on both parties. The NRI seller's income tax record shows the credit only as correctly filed by the buyer in Form 27Q. If the buyer files incorrectly, the seller's ITR cannot reconcile — and the refund is blocked. Brief your buyer and ensure they have a competent CA handling the TDS filing.

7. Ignoring Section 54 exemption eligibility

If you are selling a residential property and plan to buy another residential property in India, you may be eligible to exempt the long-term capital gain under Section 54 (reinvestment in residential property) or deposit in a Capital Gains Account Scheme (CGAS) bank account before filing the return. This can legitimately reduce your actual tax liability to zero or near-zero — which means the Form 13 certificate, if applied for correctly, can be for near-nil TDS. This saving is commonly missed by NRIs who are not planning to reinvest in India.

How Vidastu helps coordinate your property sale — we are not tax advisors, but we connect you to qualified ones

Vidastu is a Greater Noida-based real estate developer and advisory firm operating since 2012. We are a UP-RERA registered agent (UPRERAAGT000309/01/2026), rated 4.8 stars across 54 Google reviews. Our NRI desk is specifically structured to support NRIs through complex Indian property transactions — including sales, not just purchases.

We are not Chartered Accountants and do not provide tax advice. What we do is connect you to the right professionals and coordinate the moving parts of a property sale transaction, so nothing falls through the cracks between the tax side and the transaction side.

What Vidastu does in a property sale transaction

• CA network: We refer NRI clients to CAs with specific experience in NRI property taxation — Form 13 applications, Form 27Q filings, 15CA/15CB, DTAA claims, and ITR filing for NRIs. We do not charge a referral fee; we connect you because clean transactions protect our reputation.
• Transaction coordination: We track the timeline — Form 13 status, buyer's TDS deposit, sale deed registration — and ensure the buyer and seller's advisors are aligned. Miscommunications between buyer's CA and seller's CA at the registry stage are common; we prevent them.
• Buyer identification and qualification: If you are selling a property in the Greater Noida / NCR region, our buyer network and marketing reach help you find qualified buyers — including NRI-to-NRI transactions and resident buyers familiar with the NRI TDS process.
• PoA coordination: We advise on the scope and authentication requirements for a sale PoA from your country of residence, and coordinate with your representative in India for execution at the sub-registrar's office.
• Bank repatriation liaison: We guide you on the documentation your bank needs for the outward remittance (Forms 15CA/15CB, sale deed, TDS certificate) and who to contact at the authorised-dealer bank to initiate the transfer. We do not provide banking services — we reduce the confusion of what to submit and in what order.

Related guides and tools

• NRI Overview — the full picture of investing in India as an NRI
• FEMA Guide — NRE/NRO accounts, repatriation rules, PoA, and FEMA compliance for property purchases
• NRI Money Transfer for Property — how to send funds to India for a property purchase, FEMA-compliantly
• NRI Investment Case — NCR appreciation data and what drives long-term property values