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

When an NRI sells property in India, the tax rules differ from those for resident sellers. Understanding them before you sign the sale agreement can save months of waiting for a refund.

Long-term or short-term

Long-term: property held for more than 24 months. The gain is taxed at 12.5% without indexation, plus surcharge and cess. NRIs do not get the choice of indexation that some resident sellers have.
Short-term: property held for 24 months or less. The gain is added to your income and taxed at applicable rates.

How TDS works

The buyer must deduct tax when paying a non-resident. Unless you hold a certificate for a lower rate, tax is usually deducted on the full sale price, not only on the gain. That can hold back a large part of your money until you file your return and claim a refund.

The lower or nil deduction certificate

You can apply to the tax department for a certificate that allows the buyer to deduct tax on the actual gain. It takes time, so apply as soon as you decide to sell, and ideally before signing the agreement.

Reducing the gain

Reinvesting in another house or specified bonds within the prescribed time can reduce or remove the taxable gain, where you are eligible.

After the sale

File your Indian return and claim credit or refund of TDS.
Keep the purchase and sale documents, costs and improvement bills.
If you want the money abroad, tax papers and RBI conditions apply.

Rates and rules change. This is general information as of September 2026, not advice on your sale. Check your position before you sign.

Need help with this? See our NRI Services or book a consultation. This article is general information, not advice for your specific situation.

Benfer Antony A B, Finance & Tax Consultant and founder of Growth Circle. This article is general information. Tax rules change, so confirm your position before you act.