NRI Selling Property in India - TDS and Repatriation

Tax on the sale

Capital gains on property sold by an NRI are taxable in India. Gains are long-term if the property was held for more than twenty-four months. Rates and indexation rules have changed in recent budgets, so confirm the current rate for your date of purchase.

TDS on payment to an NRI

The buyer must deduct tax at source under Section 195 when paying an NRI seller, usually on the sale consideration unless a lower deduction certificate is obtained. A lower or nil deduction certificate can be sought from the tax officer under Section 197 to avoid over-deduction.

Repatriating the proceeds

Sale proceeds are credited to the NRO account and can be remitted abroad within the annual limit of USD 1 million per financial year, with Forms 15CA and 15CB and a chartered accountant's certificate. Conditions apply, and the rules are set by the Reserve Bank of India.

Practical steps

Appoint a representative through an attested power of attorney if you cannot travel, apply early for the lower deduction certificate, and involve a chartered accountant before the sale deed is signed.

Frequently asked questions

Must the buyer deduct TDS even if I made a loss?

TDS applies unless a lower or nil certificate is obtained. A refund can be claimed when the return is filed.

Can my power of attorney holder sell for me?

Yes, if the registered power of attorney clearly authorises sale, but title passes only by a registered sale deed.

Do I need to file an Indian tax return?

Usually yes, to report the gain and claim any refund.

Discuss with Advocate Aayush Agarwal

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