TDS & Capital Gain Rules for NRI Property Sale in India 2025

 

✅ Capital Gain & TDS Rules on Sale of Property by NRI (2025 Updated Guide)

When an NRI sells property in India, two key aspects determine the tax outcome: Capital Gain and TDS (Tax Deducted at Source). Understanding these helps avoid excessive tax deductions, ensures compliance, and keeps the transaction smooth.

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✅ What Is Capital Gain on Property?

Capital Gain is the profit earned when you sell a property at a price higher than your purchase cost.

Capital Gain Formula:

Capital Gain = Sale Price – Purchase Cost – Improvement Cost – Selling Expenses – Exemptions

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✅ Types of Capital Gains

1. Long-Term Capital Gain (LTCG)

• Property held for more than 24 months

• Taxed at 20% after indexation

• Indexation adjusts purchase cost as per inflation, lowering tax liability

2. Short-Term Capital Gain (STCG)

• Property sold within 24 months

• Taxed at income slab rate (typically 30% + surcharge + cess for NRIs)

• No indexation benefit

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✅ TDS Rules for NRI Property Sale (Section 195)

When an NRI sells property in India, it is legally mandatory for the buyer to deduct TDS.

✅ Long-Term Property (>24 months)

• TDS on capital gain

• Rate: 20% + surcharge + cess

✅ Short-Term Property (<24 months)

• TDS on full sale value

• Rate: Slab rate (~30% + surcharge + cess)

✅ Lower/NIL TDS Certificate

NRIs can apply for Form 13 to reduce TDS to 1–2% or even NIL, depending on actual capital gain.

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✅ Repatriation of Sale Proceeds

• Up to USD 1 million per financial year can be repatriated

• Through NRO account

• Supported by Form 15CA & 15CB

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✅ Combined Table: Capital Gain & TDS Rules for NRIs

Topic	Details
Capital Gain Definition	Profit when selling price exceeds purchase cost
Capital Gain Formula	Sale Price – Cost – Improvements – Expenses – Exemptions
LTCG Holding Period	More than 24 months
LTCG Tax Rate	20% + surcharge + cess (indexation applicable)
STCG Holding Period	Less than 24 months
STCG Tax Rate	Slab rate (~30% + surcharge + cess)
TDS Section	Section 195
TDS on LTCG	On capital gain @ 20% + surcharge + cess
TDS on STCG	On full sale value @ slab rate
Lower TDS Certificate	Apply via Form 13
Buyer Compliance	Deduct TDS, deposit to govt, Form 27Q, issue Form 16A
Repatriation Limit	USD 1 million per year
Repatriation Forms	15CA & 15CB
NRI Exemptions	Sections 54, 54EC, 54F

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✅ Our Professional Expertise 

As a professional property brokering consultant with decades of experience in NRI property transactions, I ensure complete guidance, tax clarity, documentation assistance, and smooth coordination so that the entire sale process becomes transparent, efficient, and hassle-free.

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✅ Our Services

✅ Smooth sale & purchase transactions
✅ Guidance on TDS, capital gains, Form 13 & repatriation
✅ High-ticket residential & commercial properties across Pune & Mumbai
✅ Genuine buyer & seller matchmaking
✅ Complete end-to-end documentation support

📞 Contact: 9822052388
Deepak Sundrani – Real Estate Consultant
Premium Property Advisory for NRIs & HNI Clients

⚠️ Disclaimer

The above information is general in nature. Every NRI property sale and tax situation differs. Please consult a qualified Chartered Accountant or legal advisor for advice specific to your actual case.