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

For tax, what matters is your residential status in the year of sale, which depends mainly on the days you spent in India, not on your passport. If you are non-resident that year, three things change compared with a resident seller.

• The buyer's TDS. A buyer purchasing from a resident deducts 1% on sales of ₹50 lakh or more. A buyer purchasing from an NRI must instead deduct TDS under Section 195 at the applicable capital-gains rate plus surcharge and cess, whatever the price.
• The rate options. Since the July 2024 Budget, long-term gains on property are taxed at 12.5% without indexation. The option of 20% with indexation for property bought before 23 July 2024 is written for resident individuals and HUFs, so don't assume it is open to you.
• Getting the money out. Sale proceeds typically go into your NRO account, and sending them abroad involves Form 15CA/15CB and RBI limits.

What doesn't change is the groundwork: clean documents, a genuine buyer and a registered sale deed. Our seller's documents checklist applies to you as much as to any seller. If you are buying rather than selling, our NRI guide to buying property in Mysuru is the one you need.

When the seller is an NRI, the buyer is legally responsible for deducting tax from the payment and depositing it with the government. If they get it wrong, they can face interest and penalties, so buyers and their lawyers tend to be cautious.

That caution is where the difficulty lies. Strictly, the deduction relates to your taxable gain, but a buyer rarely knows your purchase cost or your exemption plans. Without a certificate from the tax department, many buyers deduct on the entire sale price, which can lock up a large part of your money until you file your return and claim a refund.

• The buyer needs a TAN. Deducting under Section 195 requires a Tax Deduction Account Number, which most individual buyers don't have. Raise it early so it doesn't delay registration.
• Give your PAN. Without a valid PAN, the deduction is made at a higher rate.
• Put it in the agreement. The sale agreement should say how TDS will be worked out, and that the buyer will deposit it on time and give you the TDS certificate.
• Remember surcharge and cess. They are added to the base rate, so the deduction is more than the headline capital-gains rate.

TDS is not your final tax. You still report the sale in an Indian income-tax return, calculate the real gain and claim back any excess.

If your actual tax will be less than what the buyer would otherwise deduct, because your gain is small or because you plan to reinvest and claim an exemption, you can apply to the income-tax department for a lower-deduction certificate under Section 197. If it is granted, the buyer deducts at the lower rate stated on the certificate.

In practice it usually runs like this:

1. Agree terms with a buyer and gather what the application needs, typically the buyer's details, the sale price, your purchase deed and cost, and any reinvestment plan.
2. Your CA prepares and files the application online and answers any queries from the tax officer.
3. Once the certificate is issued for the transaction, you share it with the buyer before payment.

Allow time. Processing isn't instant and varies from one tax office to another, so apply as soon as the deal is reasonably firm, and allow for it when you fix the registration date in your sale agreement. If the certificate hasn't arrived by registration, you and the buyer will have to decide whether to wait or to proceed with the full deduction and claim a refund later.

Living abroad doesn't take away the main reinvestment exemptions, which are available to individuals whether or not they are resident. At the time of writing:

• Section 54 if you sell a long-term residential house and reinvest the gain in a residential house in India.
• Section 54F if you sell a plot or other long-term asset and invest the net sale proceeds in a residential house in India.
• Section 54EC if you invest long-term gains from land or buildings in specified bonds within six months, up to ₹50 lakh.

Sections 54 and 54F are capped at ₹10 crore. Note the words "in India": buying a home in your country of residence doesn't qualify.

Plan these before the sale. A reinvestment you genuinely intend can support an application for a lower-deduction certificate; without one, the buyer deducts in full and you wait for a refund. Our guide to capital gains tax on a property sale explains how the gain is worked out, what counts as cost, and how the Capital Gains Account Scheme keeps an exemption open. Also ask your CA about the country where you live: it may tax the same gain, and India's tax treaties with many countries aim to stop you being taxed twice on it.

If you can travel to Mysuru, signing in person at the sub-registrar office is the simplest route; registration involves biometrics and photographs of the parties. If you can't, you can authorise someone you trust in India to sell on your behalf through a power of attorney (POA). For a sale, the POA should be:

• Specific: naming the property and spelling out what the holder may do, such as signing the sale agreement and sale deed, presenting the deed for registration, and handling the related tax and khata paperwork.
• Properly executed abroad: typically signed before an Indian embassy or consulate, or notarised and apostilled in countries that use the apostille system.
• Stamped and registered as required once it reaches India. A POA signed abroad has to be stamped in India within a time limit after it arrives, and buyers' lawyers and banks check these steps closely.

Two safeguards matter. Ask that the sale money be paid directly into your own NRO account, not to the POA holder. And keep the POA limited to the task: an ordinary POA generally ends if the person who gave it dies, and it can be revoked if circumstances change. Our guide to power of attorney in property deals covers drafting and registration in more detail.

Sale proceeds are typically paid into your NRO (Non-Resident Ordinary) account; your bank can confirm the right account. To move money from there to your account abroad, the bank will ask for tax paperwork:

• Form 15CA: a declaration about the remittance, filed online.
• Form 15CB: a chartered accountant's certificate on the tax position of the payment, needed in many cases depending on the amount and nature of the remittance.

Under RBI rules at the time of writing, NRIs can generally repatriate up to USD 1 million per financial year from their NRO account, subject to conditions and taxes having been paid. If you originally bought the property with money brought in from abroad through banking channels, separate rules may allow repatriation linked to that original investment. Ask your bank whether this applies, and keep your old remittance records and purchase papers, because you will need them.

A few practical tips: tell your bank about the sale before the money arrives; keep the registered sale deed, TDS certificates and your CA's computation together; and file your Indian return, which is how any excess TDS comes back to you. Limits and procedures are set by the RBI and the tax department and change from time to time, so confirm the current rules with your bank and CA before planning any transfer.

Put together, a well-planned NRI sale usually runs in this order:

1. Speak to a CA who handles NRI property sales and estimate the gain and the tax.
2. Get your documents in order and, if you won't travel, execute a specific POA.
3. Find a buyer, sign a sale agreement that covers TDS, and remind the buyer that they need a TAN.
4. Apply for a lower-deduction certificate if your tax will be lower than what the buyer would otherwise deduct.
5. Register the sale, with payment made directly into your NRO account.
6. File your Indian return, claim any refund, and repatriate with Form 15CA/15CB.

A note on section numbers: this guide uses the Income-tax Act, 1961 references most people know. A new Income-tax Act took effect from April 2026 and renumbers many provisions, so your CA may use different references.

If the property is in or around Mysuru, Siddaganga Real Estate can help on the ground with pricing, buyer enquiries, documents and registration while you work with your CA on tax. You can get in touch with the team from wherever you are.