NRI Selling Property in India — TDS Rules, Buyer Duties and the 2026 Change

NRI Selling Property in India — TDS Rules, Buyer Duties and the 2026 Change

When a non-resident sells property in India, the tax is deducted very differently from a resident sale — on the full value, from the first rupee, with the buyer carrying real compliance duties. This is the end-to-end guide: how much TDS applies, what the buyer and seller each must do, how to bring the deduction down, how to repatriate the proceeds, and what changes on 1 October 2026. Numbers are given under both the Income-tax Act, 1961 and the Income-tax Act, 2025.

TDS is on
Full sale value
not the gain
Threshold
None
no ₹50 lakh floor
Buyer needs
TAN → PAN
PAN route from 1 Oct 2026
To reduce it
Form 13 / 128
lower/nil certificate

The sale, start to finish

Before the sale

Plan the deduction

  • Estimate the capital gain and tax
  • Decide on 54 / 54EC / 54F exemptions
  • Apply for a Form 13 / 128 certificate
  • Confirm the buyer has a TAN
At registration

Deduct and deposit

  • Buyer deducts TDS at the certified or full rate
  • Deposits it and files the TDS return
  • Issues the TDS certificate to the seller
  • Sale deed registered
After the sale

File and repatriate

  • Seller files the ITR, claims exemptions
  • Any excess TDS refunded
  • 15CA / 15CB for repatriation
  • Funds moved within the USD 1M limit

How much TDS applies

For a long-term sale (property held over 24 months) the rate is 12.5% plus surcharge and 4% cess, applied to the whole sale consideration when there is no certificate. There is no ₹50 lakh threshold and no 1% concession — those belong to the resident Form 26QB route. A short-term sale is taxed at slab rates, with the buyer deducting at the maximum rate. The effective long-term rate runs from 13.00% up to 14.95% depending on the amount; the surcharge on this capital gain is capped at 15%.

Amount slabBaseSurchargeEffective (incl. 4% cess)
Up to ₹50 lakh12.5%Nil13.00%
₹50 lakh – ₹1 crore12.5%10%14.30%
₹1 crore – ₹2 crore12.5%15%14.95%
Above ₹2 crore12.5%15% (capped)14.95%
See exactly how much a certificate saves on your saleEnter your figures in the cash-blocked vs certificate calculator.
Open the calculator →

What the buyer must do

Buyer’s duties (until 30 Sep 2026)

  • Obtain a TAN before deducting
  • Deduct TDS under Section 195 at the certified or full rate
  • Deposit the TDS by the due date
  • File the TDS return in Form 27Q
  • Issue the TDS certificate (Form 16A) to the seller

Seller’s duties

  • Apply for a Form 13 / 128 certificate if beneficial
  • Share PAN and the certificate with the buyer
  • File the income-tax return for the year
  • Claim exemptions and any TDS refund
  • Arrange 15CA / 15CB before repatriating
Section 195 is renumbered Section 393 from Tax Year 2026-27; the TDS return Form 27Q is reported to become Form 140 and the certificate Form 16A becomes Form 131 under the Income-tax Rules 2026. Confirm the live form numbers on the portal before filing.

The 1 October 2026 change — no TAN for the buyer

Budget 2026 proposes to remove the buyer’s TAN requirement for an NRI property purchase. From 1 October 2026, the TDS can be deposited against the buyer’s PAN through a challan-cum-statement, much like the resident Form 26QB, instead of the TAN-plus-Form-27Q process. The rate the buyer deducts, and the seller’s ability to reduce it with a certificate, do not change — only the buyer’s paperwork gets lighter. This is announced and expected to be notified under the Income-tax Rules 2026; treat it as the direction of travel and confirm the final notification before relying on it.

Bringing the TDS down

Two levers reduce what is withheld. First, a Form 13 / Form 128 lower or nil certificate restricts the deduction to the tax on the actual gain rather than the full price. Second, capital-gains exemptions — Section 54 (reinvest a residential gain in a house), Section 54EC (up to ₹50 lakh in NHAI/REC/PFC/IRFC bonds within six months) and Section 54F (reinvest the net consideration of a non-residential asset in a house) — cut the gain itself, and therefore the certified rate. Where an exemption covers the whole gain, the certificate can be nil.

Repatriating the sale proceeds

After the sale, moving the money abroad from an NRO account needs a chartered accountant’s Form 15CB and the remitter’s Form 15CA, confirming the taxes are paid. Under the Income-tax Rules 2026 these are renumbered Form 145 and Form 146. A non-resident can repatriate up to USD 1 million per financial year from NRO balances, subject to the bank’s documentation. Plan the certificate, the return and the remittance together so the funds are not stuck between a completed sale and a pending refund.

15CA / 15CB (Forms 145 / 146) is a service in its own right and a separate guide on this site is planned. For now, keep the sale documents, the TDS certificate and the tax-paid challans ready — they are what the CA certifies.

Old Act 1961 vs new Act 2025 numbering

Income-tax Act, 1961 (current filings)

  • TDS on NRI payment: Section 195
  • Lower/nil certificate: Section 197, Form 13
  • TDS return: Form 27Q; certificate: Form 16A
  • Repatriation: Form 15CA / 15CB

Income-tax Act, 2025 + Rules 2026

  • TDS on NRI payment: Section 393
  • Lower/nil certificate: Section 395, Form 128
  • TDS return: Form 140; certificate: Form 131
  • Repatriation: Form 145 / 146

Related tools and guides

NRI Lower/Nil TDS certificate hub → Cash-blocked calculator → Form 13 / Form 128 process → Capital gains exemptions → NRI tax guide →

Frequently asked questions

Is TDS on an NRI property sale really on the full value?
Yes. For a non-resident seller the buyer deducts under Section 195 (Section 393 from Tax Year 2026-27) on the entire sale consideration at the capital-gains rate, from the first rupee. The 1% rate and the ₹50 lakh threshold apply only to resident sellers under the Form 26QB route. A lower or nil certificate is the way to reduce it to the tax on the actual gain.
Does the buyer need a TAN?
Until 30 September 2026, yes — the buyer must obtain a TAN, deduct under Section 195, deposit the TDS and file Form 27Q. From 1 October 2026, Budget 2026 proposes that the buyer can instead deposit against their PAN via a challan-cum-statement, like Form 26QB, with no TAN needed. Treat the new route as announced pending final notification.
How can the NRI seller reduce the TDS?
By applying for a Form 13 / Form 128 lower or nil certificate, which limits the deduction to the tax on the actual gain, and by using capital-gains exemptions under Sections 54, 54EC and 54F to reduce the gain itself. Together these can cut the withholding from lakhs to a fraction, or to nil.
What is needed to send the money abroad?
Repatriation from an NRO account needs Form 15CB from a chartered accountant and Form 15CA from the remitter (Forms 145 and 146 under the Rules 2026), confirming the taxes are paid, within the USD 1 million per financial year limit. The bank will also ask for the sale and tax documents.
Is the gain taxed at 12.5% or 20%?
For a non-resident, long-term property gains are taxed at a flat 12.5% without indexation. The 20%-with-indexation option was restricted to resident individuals and HUFs from 23 July 2024, so it is not available to NRIs. Surcharge on this gain is capped at 15% and 4% cess applies.
This page is a general guide for individual taxpayers and is not tax advice. The tax on any sale, the certificate rate and the compliance steps depend on your facts. Section and form references to the Income-tax Act, 2025 and the Income-tax Rules 2026 (Section 393, Section 395, Form 128, Form 131, Form 140, Forms 145/146) apply from Tax Year 2026-27 (1 April 2026); the Income-tax Act, 1961 references apply for FY 2025-26 and earlier. The 1 October 2026 PAN-based buyer process is announced and pending final notification. Verify the current position on the income-tax portal or with your advisor before acting.
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