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Selling property in India as an NRI: TDS, lower TDS certificate and repatriation

When an NRI sells property in India, the buyer must deduct tax before paying. Without planning, a large part of the sale price can be locked up as TDS for months. Here is how the process works and how to avoid excess deduction.
By CA Abhishek Gupta · Updated 31 October 2026

Why NRI property sales attract heavy TDS

When a resident sells property, the buyer deducts a flat 1%. When the seller is an NRI, the buyer must instead deduct tax at the rates in force on the capital gain, plus surcharge and cess. From 1 April 2026 this falls under section 393(2) of the Income-tax Act, 2025.

In practice buyers rarely know your purchase cost, so they often deduct on the full sale price. On a ₹1 crore sale that can mean around ₹14 lakh held back as TDS, even if your actual gain is small.

Resident sellerNRI seller
TDS rate1% of sale valueCapital gains rate in force, plus surcharge and cess
Buyer's formForm 141 (Schedule B)Cannot use Form 141; buyer needs a TAN and files a TDS return
No PANHigher rateHigher of the rate in force or 20%

Long-term gains (property held for more than 24 months) are generally taxed at 12.5% without indexation, plus surcharge and cess. Short-term gains are taxed at normal slab rates.

The fix: a lower or nil TDS certificate

An NRI seller can apply to the Income Tax Department for a certificate that lets the buyer deduct tax only on the actual gain, or not at all where there is no gain. Under the new law the application is made under section 395(1) in Form 128, which replaces the old Form 13.

  1. Prepare your purchase deed, cost of improvement bills and the sale agreement.
  2. Compute the capital gain and any reinvestment you plan to claim.
  3. File Form 128 online with your PAN, well before the sale is registered.
  4. Give the certificate to the buyer, who then deducts at the lower rate stated in it.

Apply early. Certificates take time to be issued, and buyers will not wait once a sale date is fixed.

Sending the money abroad

Sale proceeds are credited to your NRO account. Moving them out of India needs two things:

  • Form 145 (old Form 15CA): your declaration, filed online on the income tax portal.
  • Form 146 (old Form 15CB): a chartered accountant's certificate, needed when the amount is taxable in India and exceeds ₹5 lakh in the year, unless you already hold a lower or nil certificate from the tax officer.

Your bank checks both acknowledgements against its own Form A2 before remitting. FEMA also caps remittances from NRO balances at USD 1 million per financial year for each person, so plan large sales across years if needed.

Common mistakes

  • Selling without a lower TDS certificate and waiting a year for a refund.
  • Letting the buyer deduct on the full sale price without a TAN, so the TDS never shows against your PAN.
  • Not filing an ITR after the sale, so excess TDS is never refunded.
  • Remitting without Form 145/146, so the bank holds the transfer.

Questions people ask

How much TDS is deducted when an NRI sells property in India?

The buyer deducts tax at the capital gains rate in force plus surcharge and cess, often on the full sale price. A lower or nil TDS certificate in Form 128 lets the buyer deduct only on the actual gain.

What replaced Form 13 for lower TDS?

From 1 April 2026, the application for a lower or nil deduction certificate is made in Form 128 under section 395(1) of the Income-tax Act, 2025.

What are Form 145 and Form 146?

They are the new names of Form 15CA and Form 15CB. Form 145 is the remitter's declaration and Form 146 is the chartered accountant's certificate needed for most taxable remittances above ₹5 lakh.

How much money can an NRI send abroad from an NRO account?

Up to USD 1 million per financial year per person, after paying applicable taxes and filing the required forms.

Sources

General information, not advice. Rules change and individual facts matter; take professional advice before acting.