Selling Property in India as an NRI: Tax, TDS and Repatriation Basics

For non-resident Indians, selling a flat or plot in India is rarely just a sale. The buyer has tax obligations, you have reporting obligations, and moving the money abroad needs the right documentation. Getting the sequence right avoids excess tax being withheld and delays at the bank.

1. Tax is deducted by the buyer

When the seller is a non-resident, the buyer must deduct tax at source (TDS) from the sale consideration and deposit it with the government. The deduction is calculated on the capital gain at the applicable rates, but in practice buyers often deduct on the full sale value to be safe, which can lock up a large amount of your money until you file your return.

Tip: You can apply to the tax department for a lower or nil deduction certificate before the sale. If approved, the buyer deducts tax only on the amount the certificate specifies.

2. Work out your capital gain

• Short-term or long-term? This depends on how long you held the property. Long-term gains generally get more favourable treatment.
• Cost of acquisition includes the purchase price, stamp duty and registration, and eligible improvement costs; keep the documents.
• Exemptions may be available if you reinvest gains in specified assets within prescribed time limits.

Tax rates and exemption conditions change with Finance Acts, so check the current rules for the year of sale.

3. File your Indian tax return

Even if TDS has been deducted, you must report the sale in your Indian income-tax return for that year. If the TDS was more than your actual tax liability, the return is how you claim the refund.

4. Move the money abroad

Sale proceeds are usually credited to your NRO account. To remit them abroad:

• Your chartered accountant issues a certificate confirming taxes have been paid, and a declaration is filed online with the tax department.
• Your bank processes the remittance under the foreign-exchange rules, which set an annual limit on remittances from NRO balances and may ask for the sale deed and proof of tax payment.

Documents to keep ready

• Purchase deed and sale deed
• Proof of cost, stamp duty and improvements
• PAN and passport/visa details
• NRO/NRE account statements
• TDS certificate from the buyer
• Lower-deduction certificate (if obtained)

How Advest can help

We help NRIs plan the sale, apply for lower-deduction certificates, compute capital gains, file returns, claim refunds and prepare the remittance documentation. See our taxation services.

This article is general information, not professional advice. Tax and foreign-exchange rules change; please consult us before you sell.