When an NRI sells property in India, the buyer must deduct TDS under Section 195 and deposit it using a TAN. TDS applies to the capital gains, including surcharge and cess, and often to the full sale value if no certificate is obtained.
An NRI can apply under Section 197 for a lower or nil deduction certificate based on the actual capital gains. This avoids large amounts being locked up until a refund. Long-term gains may also be reinvested under Sections 54 or 54EC to save tax.
Key points
- Buyer needs a TAN and files Form 27Q
- Apply for a lower deduction certificate before the sale
- Repatriation of sale proceeds needs Form 15CA / 15CB
- File an ITR in India for the year of sale
General information only, not professional advice. Section references are to the Income-tax Act, 1961; corresponding provisions of the Income-tax Act, 2025 apply from 1 April 2026. Thresholds and dates may change by notification.
CA Rahul Rajendra MohiteACA, M.Com · ICAI Membership No. 622387 · Founder, Rahul R. Mohite & Co., PuneFirm profile and key facts