**The Tax Landscape for NRIs Selling Property** When a Non-Resident Indian sells property in India, the buyer is required to deduct TDS (Tax Deducted at Source) before remitting the sale proceeds. This is where many NRIs get caught off guard. **TDS Rates for NRIs (2026)** | Holding Period | Capital Gains Type | TDS Rate | |---------------|-------------------|---------| | < 24 months | Short-term capital gains (STCG) | 30% + 4% cess = 31.2% | | > 24 months | Long-term capital gains (LTCG) | 12.5% + 4% cess = 13% (no indexation from FY 2025–26) | Note: The 2024 amendment removed indexation benefit for LTCG on property, setting the rate at 12.5% flat. This was controversial; consult a CA as this could change. **How to Apply for a Lower TDS Certificate** If the buyer deducts 30% TDS on a long-term gain, you'll be overpaying tax and will need to wait for a refund (often 12–18 months). The better approach: 1. File an application in **Form 13** with the Income Tax Officer (ITO) of your jurisdiction 2. Show your estimated taxable gain (purchase price, improvement costs, selling price) 3. The ITO issues a **Lower Deduction Certificate** specifying the correct TDS rate 4. Present this to the buyer, who then deducts TDS at the certified lower rate This process takes 30–45 days; start before you finalise the sale. **DTAA Benefits** India has Double Tax Avoidance Agreements with 90+ countries. If you're a tax resident in the US, UK, UAE, Singapore, or Australia, the DTAA may: - Reduce or eliminate Indian tax on the capital gains - Allow credit for Indian TDS paid against your home country's tax liability UAE residents note: UAE has no personal income tax, so the DTAA doesn't typically provide a lower rate on Indian property gains. **Reinvestment Options to Save LTCG Tax** Under **Section 54**, an NRI can claim exemption on LTCG by reinvesting in another residential property in India (purchase within 1 year before or 2 years after sale, or construction within 3 years). Under **Section 54EC**, you can invest up to ₹50 lakh in NHAI or REC bonds within 6 months of sale to save LTCG tax. **Repatriation After Sale** After paying applicable taxes and filing ITR, NRIs can repatriate sale proceeds via the NRO account: - Up to USD 1 million per financial year - Requires CA certificate (Form 15CB) and bank form (15CA) - Bank processes repatriation in 3–7 working days **Common Mistakes NRIs Make** - Allowing the buyer to deduct full 30% TDS without applying for Form 13 lower certificate - Not disclosing Indian property sale in their home country's tax return - Skipping ITR filing in India after the sale (penalty: ₹5,000 + interest)