NRI Property Sale: Lower TDS Certificate, Form 15CA/15CB & Repatriation
Why NRI property sales need planning
For a resident seller, the buyer deducts a small TDS. For a non-resident seller, the buyer must deduct tax at the seller’s capital gains rate plus surcharge and cess — and unless the seller obtains a certificate from the Income Tax Department, this is in practice applied to the entire sale price. Because the deduction is on the price rather than the gain, the tax withheld is often far higher than the tax actually payable.
Example: a flat bought for ₹80 lakh and sold for ₹1 crore produces a gain of roughly ₹20 lakh, but TDS is worked out on the full ₹1 crore. Without a lower deduction certificate, the excess sits with the department until your return is processed and the refund is issued.
Form names: the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered sections and forms. This page uses the familiar names (such as Form 15CA, 15CB and 10F); confirm current names when filing.
How we handle an NRI property sale
- Before the sale agreement: confirm residential status and holding period, compute the gain and review reinvestment options.
- Lower / nil TDS certificate: file the application on TRACES, handle the Assessing Officer’s queries and share the certificate with your buyer.
- Buyer-side compliance: guide the buyer or their CA so your TDS credit appears correctly.
- Repatriation: issue Form 15CB, help you file Form 15CA and coordinate the remittance from your NRO account.
- Income tax return: report the gain, claim the TDS credit and refund, and share the computation your overseas adviser needs.
Resident seller vs NRI seller
The buyer’s obligations depend on the seller’s residential status for tax, not on citizenship.
| Point | Resident seller | NRI seller |
|---|---|---|
| Provision under the 1961 Act (as commonly known) | Section 194-IA | Section 195 |
| TDS worked out on | Sale price, at a low flat rate, where the price reaches the prescribed threshold | Full sale price, at the capital gains rate plus surcharge and cess, unless a lower or nil certificate is issued |
| Buyer needs a TAN? | No — TDS is paid online using PAN | Yes |
| How the buyer reports it | Challan-cum-statement (Form 26QB under the earlier rules) | Quarterly TDS return (Form 27Q under the earlier rules) |
| TDS certificate to the seller | Form 16B under the earlier rules | Form 16A under the earlier rules |
If the seller is resident in India for the year of payment (for example, after moving back), the resident-seller procedure generally applies.
Capital gains and reinvestment exemptions
The taxable gain is the sale price less the cost of acquisition (including stamp duty and registration), improvement costs and transfer expenses such as brokerage. Property held for more than 24 months gives a long-term gain, taxed at 12.5% plus surcharge and 4% cess; a shorter holding gives a short-term gain, taxed at slab rates.
- Stamp duty value: if the price is below the stamp duty (ready reckoner) value by more than the permitted tolerance, that value may be treated as the sale price.
- Inherited or gifted property: the previous owner’s cost and holding period are generally counted.
- Residential house in India: reinvesting a long-term gain in a house in India, bought or built within the prescribed time limits, can exempt it up to a monetary cap.
- Specified bonds: investing in notified bonds within the prescribed period can also exempt the gain, subject to an investment limit and a lock-in, where NRIs are permitted to invest.
- Capital gains account: an amount not reinvested by the return due date can generally be deposited in a capital gains account scheme with a bank.
Breaking the conditions later, such as selling the new house too soon, can reverse the exemption.
How to apply for a lower or nil TDS certificate
The certificate directs the buyer to deduct TDS at a lower rate, or not at all, based on the tax the Assessing Officer estimates you will owe. It is issued for a specific buyer and amount, and must be in hand before the payment it covers.
- Collect the basics: your PAN, the buyer’s name, PAN and TAN, the agreed price and payment schedule. The application asks for the buyer’s TAN, so the buyer should obtain one early.
- Prepare the computation: work out the gain, any reinvestment exemption and the estimated tax with surcharge and cess.
- Assemble documents: purchase deed, improvement bills, sale agreement or agreed terms, proof of residential status and recent Indian returns, if filed.
- File on TRACES: submit the online application (Form 13 under the earlier rules) with the computation and documents.
- Respond to the Assessing Officer: answer queries promptly and completely; an incomplete reply can lead to a higher rate or a rejection.
- Share the certificate with the buyer: the buyer then deducts at the certificate rate and quotes its details in the TDS return.
Processing time varies, so apply as soon as the buyer and price are fixed.
Buyer’s checklist when purchasing from an NRI
The TDS obligation sits with the buyer; a short deduction can leave the buyer liable for the shortfall with interest.
- Confirm the seller’s status: take a written declaration and a copy of any lower or nil TDS certificate naming you as the deductor.
- Obtain a TAN: apply well before the first payment; each joint buyer who pays needs one.
- Deduct on every payment: including the token advance, at the certificate rate or, without a certificate, at the applicable rate on the full amount. Pay the net amount to the seller, usually into the NRO account.
- Deposit the TDS: pay it to the government by the due date, using your TAN.
- File the quarterly TDS return: for payments to non-residents (Form 27Q under the earlier rules), quoting the seller’s PAN and any certificate number.
- Issue the TDS certificate: download it from TRACES (Form 16A under the earlier rules) and give it to the seller.
Repatriation: Form 15CA, 15CB and the NRO account
Form 15CA is the remitter’s online declaration for a payment to a non-resident or to a foreign account. Form 15CB is a Chartered Accountant’s certificate confirming the nature of the payment, its taxability in India and the rate applied (including any treaty rate). Form 15CB is generally required where the remittance is chargeable to tax and exceeds ₹5 lakh in a financial year; certain payments are excluded under the earlier rules (Rule 37BB). Under RBI’s rules, NRIs can generally remit up to USD 1 million per financial year from NRO balances, including property sale proceeds.
- Form 15CB: after you add the CA on the income tax e-filing portal, the CA reviews the sale deed, TDS certificates and capital gains computation and files Form 15CB.
- Form 15CA: you then file Form 15CA on the portal, quoting the Form 15CB acknowledgement.
- Bank remittance: submit both forms with the bank’s application and declarations; the bank then remits the funds from your NRO account to your overseas account.
If the property was bought with foreign exchange (remitted from abroad or from NRE/FCNR funds), that amount may be repatriable under a separate route, subject to RBI conditions. See our foreign remittance document checklist.
DTAA relief for NRIs abroad
For property located in India, most tax treaties allow India to tax the capital gain, so a treaty rarely reduces the Indian tax. Relief is then usually claimed in your country of residence as a foreign tax credit, where that country also taxes the gain (generally the case in the US, UK and Australia). The UAE does not currently levy personal income tax, so the Indian tax is usually the final cost; Singapore residents should confirm the local position with their adviser.
To apply treaty provisions on other Indian income, keep a Tax Residency Certificate (TRC) and Form 10F ready. We prepare the Indian tax computation and documents your adviser in the US, UK, UAE, Singapore or Australia needs.
Filing the return and claiming the refund
TDS is only an advance payment. The final tax is settled in your Indian income tax return for the year of sale, reporting the gain, any exemption and the TDS credit. Excess TDS is refunded after processing to a pre-validated bank account; any shortfall is paid before filing. First check that the buyer’s TDS appears in your tax credit statement (commonly called Form 26AS) and AIS; a missing entry usually means the buyer’s TDS return needs correction.
See our ITR filing guide and ITR filing & NRI taxation page; for notices received later, see income tax and GST notices.
Common mistakes to avoid
- Taking payment before the certificate is issued: earlier payments, including a token advance, suffer TDS at the full rate; the excess comes back only through your return.
- Buyer using the resident-seller procedure: paying the low flat TDS via the PAN-based challan for an NRI seller leaves a shortfall the buyer can be held responsible for.
- Missing residential-status documents: without passport stamps, travel records or a TRC, your status is harder to support.
- Not filing the return: excess TDS is refunded only through the income tax return.
- No PAN: TDS may be deducted at a higher rate, and a lower deduction certificate cannot be applied for.
Documents to keep ready
- Purchase deed and payment proofs (cost of acquisition)
- Bills for improvement or renovation, if any
- Draft sale agreement and expected sale price
- PAN, passport, visa / OCI and India stay details (for residential status)
- NRO / NRE bank account details
- Buyer’s name, PAN and TAN
- Tax Residency Certificate and Form 10F (if claiming treaty relief)
- Earlier Indian income tax returns, if filed
Working with us from abroad
Everything except the property registration itself can be done without travelling to India: documents by email or secure drive, discussions by video call scheduled around your time zone, and quick questions on WhatsApp. Registration of the sale deed needs your presence or a registered power of attorney holder. For property in Navi Mumbai and Mumbai, our office is in Panvel; we also act for NRIs selling property anywhere in India. Read more about the firm.
Frequently Asked Questions
How much TDS is deducted when an NRI sells property in India?
The buyer deducts TDS on the full sale price, not just the gain. For property held for more than 24 months, the long-term capital gains rate of 12.5% applies, plus surcharge and 4% cess; for property held for 24 months or less, the deduction is at the higher rate applicable to short-term gains.
Can the TDS on an NRI property sale be reduced?
Yes. The seller can apply to the Income Tax Department for a lower or nil deduction certificate based on the estimated actual tax on the gain. Once issued, the buyer deducts TDS at the rate in the certificate. Apply before the payment is made, ideally before the sale agreement is signed.
Does the buyer need a TAN when buying property from an NRI?
Yes. A buyer purchasing from an NRI needs a TAN to deposit the TDS, file the quarterly TDS return and issue the TDS certificate. Each joint buyer who makes a payment needs a TAN.
Can I sign the sale agreement before the lower TDS certificate is issued?
Yes, but plan the payment dates. TDS applies to every payment, including a token advance, so amounts paid before the certificate is issued are deducted at the full rate; the excess is recoverable only through your return.
Do I need Form 15CA and 15CB to send the sale proceeds abroad?
Generally yes. The bank asks for Form 15CA, and a Chartered Accountant’s certificate in Form 15CB where the remittance is taxable and exceeds ₹5 lakh in a financial year. NRIs can generally remit up to USD 1 million per financial year from NRO balances.
Can I save tax by buying another house with the sale proceeds?
It may help. A long-term gain can be exempt to the extent it is reinvested in a residential house in India within the prescribed time limits, subject to a monetary cap and other conditions.
We are joint owners. Does each of us need a separate certificate?
Yes. Each NRI co-owner’s share is computed separately, so each applies for their own certificate. For a co-owner resident in India, the buyer follows the resident-seller procedure for that share.
Can the whole process be handled without visiting India?
Yes, apart from registering the sale deed, which needs you or a registered power of attorney holder. The lower TDS application, income tax return and Form 15CA/15CB are all filed online, and we work with you by email, video call and WhatsApp.
This page is general information, not advice for your specific facts. Rates, thresholds and form numbers change; contact us to confirm the position for your transaction.