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NRI Property Sale Tax

Buyer of NRI-owned property must deduct TDS under section 195 — typically on the entire sale value at LTCG rate (12.5% post Budget 2024). NRI seller can apply for a lower deduction certificate to reduce TDS to actual gain only.

₹1,50,00,000
₹80,00,000
60 months

LTCG triggers at > 24 months.

TDS to be deducted (Section 195)
₹21,45,000
Capital gain (LTCG)₹70,00,000
Tax₹8,75,000
Surcharge₹87,500
Cess (4%)₹38,500
Total tax liability₹10,01,000
Net to seller (after TDS)₹1,28,55,000

FAQ

Does the buyer just deduct 1% TDS like for a resident?

No — section 194-IA does NOT apply to NRI sellers. Section 195 applies, with TDS at LTCG / STCG rate on the FULL sale value. The buyer needs a TAN to comply.

How does the lower deduction certificate help?

NRI seller applies under section 197 to the AO. Once issued, TDS is deducted only on the actual capital gain, not the full sale value. Saves significant cashflow.

Can the NRI claim section 54 / 54F?

Yes — same rules as resident. Reinvest gain in another residential property within 2 years (or under-construction within 3 years). Reinvestment must be in India.