NRI Selling Property in India (2026) — Capital Gains, Buyer's TDS & Repatriation
Quick answer: From 1 April 2026 an NRI's gain on Indian property held over 24 months is taxed at 12.5% without indexation — the 20%-with-indexation option for pre-23 July 2024 purchases is available only to resident individuals and HUFs, not NRIs. The buyer deducts tax on the full sale consideration (13% / 14.30% / 14.95% with surcharge and cess) unless the seller obtains a lower-deduction certificate (Form 128, formerly Form 13) — and from 1 October 2026 a resident individual or HUF buyer needs no TAN: TDS goes through PAN-based Form 141 with Schedule E (CBDT Notification 121/2026). Company, firm and LLP buyers still need a TAN. Up to USD 1 million a year can be repatriated from the NRO account with Form 15CA and a CA's 15CB. We get the certificate before the deed, not the refund after it.
Last verified 4 October 2026 — rules on this page checked against the current notifications. We update it the day a rule changes.
What the Income-tax Act 2025 changed — the section map
| Item | 1961 Act | 2025 Act (from 1 April 2026) |
|---|---|---|
| Long-term capital gains rate | s.112 — 12.5% (20% with indexation option, residents only, pre-23 July 2024 assets) | Section 197; the indexation option is in s.197(3) and remains resident-only |
| TDS on payment to a non-resident seller | s.195 | Section 393(2) |
| TDS on purchase from a resident (1% above ₹50 lakh) | s.194-IA, Form 26QB | Section 393(1) Table Sl. 3(i); Form 141 |
| Buyer's TAN when the seller is a non-resident | Mandatory (s.195 + 27Q) | Not required for resident individual/HUF buyers from 1 October 2026 — s.397(1)(c); Form 141 with Schedule E, certificate in Form 132 (Income-tax (Fifth Amendment) Rules, 2026, Notification 121/2026 of 22 Sep 2026). Still required for company, firm and LLP buyers |
| Lower / nil deduction certificate | Form 13 | Form 128 |
| Reinvestment exemptions | ss.54, 54EC, 54F | Sections 82, 85, 86 (confirm mapping on the e-filing portal in each case) |
Section numbers are from the Income-tax Act, 2025 and the correspondence tables published by the department; we cite the exact section in every certificate application and return.
The rate — and the indexation point most pages get wrong
- Long-term (held > 24 months): 12.5% without indexation. The option to pay 20% with indexation on land or buildings bought before 23 July 2024 belongs to resident individuals and HUFs only. An NRI cannot elect it — pages offering NRIs "12.5% or 20% with indexation, whichever is lower" are wrong.
- Short-term (≤ 24 months): slab rates.
- Surcharge on LTCG is capped at 15%; health and education cess 4%.
Buyer's TDS on an NRI seller — effective rates on the full consideration
| Seller's total income | Surcharge | Effective TDS (12.5% + surcharge + 4% cess) |
|---|---|---|
| Up to ₹50 lakh | Nil | 13.00% |
| ₹50 lakh – ₹1 crore | 10% | 14.30% |
| Above ₹1 crore | 15% (cap on LTCG) | 14.95% |
The sequence, buyer and seller together
- Seller: compute gain, apply for Form 128 (TAN of buyer, agreement to sell, cost proof, PAN); 30+ days
- Buyer: resident individual/HUF (deals from 1 October 2026) — deduct at the certificate rate or the full rate and deposit under PAN in Form 141 + Schedule E within 30 days of the month-end, then issue Form 132; company/firm/LLP buyers — obtain a TAN, deposit by the 7th of the next month and file the quarterly non-resident statement
- Seller: reinvest within the windows (new residential house; specified bonds within 6 months) if claiming the exemptions, and file the return by 31 July
- Repatriation: up to USD 1 million per financial year from the NRO account, with Form 15CA and a CA's Form 15CB; DTAA relief needs a Tax Residency Certificate and Form 10F — most treaties still let India tax Indian property gains, so relief is usually a foreign tax credit at home
What we do
- Gain computation and Form 128 application with the jurisdictional AO (international taxation charge) before the deed
- Buyer-side TAN, deduction, deposit and quarterly statement so the seller's credit shows correctly
- Exemption planning and documentation; 15CA/15CB and bank liaison for repatriation
- Return filing, refund follow-up and notice replies; TDS compliance for the buyer
Client: A Dubai-based NRI selling a Vasant Kunj flat bought in 2012 for ₹1.1 crore at ₹2.6 crore.
Situation: The buyer's lender insisted on 14.95% TDS on the full ₹2.6 crore — ₹38.9 lakh — against an estimated tax of about ₹19 lakh.
Approach: Applied for Form 128 four weeks before the deed with cost proofs and the reinvestment plan; secured a certificate at the computed rate; coordinated the buyer's TAN and deduction; filed 15CA/15CB for repatriation within the USD 1 million limit.
Outcome: TDS limited to the certified amount; no refund wait; proceeds repatriated in the same quarter.
Client identity and certain details have been changed or withheld to protect confidentiality. Outcomes depend on individual facts and are not a guarantee of results.
Remittance and certificate forms in detail: Forms 145/146 (ex-15CA/CB) and Form 128.
Talk to us before you file anything
Frequently asked questions
Can an NRI choose 20% with indexation on property bought before 23 July 2024?
No. That option (now s.197(3) of the 2025 Act) is for resident individuals and HUFs only. An NRI pays 12.5% on the long-term gain without indexation.
Is TDS deducted on the sale price or the capital gain?
On the full sale consideration unless the seller holds a lower-deduction certificate (Form 128) — then on the amount the certificate specifies, usually the computed gain.
Does the buyer need a TAN to buy from an NRI in 2026?
Not if the buyer is a resident individual or HUF and the deal is on or after 1 October 2026 — CBDT Notification 121/2026 (22 September 2026) lets such buyers deduct under Section 393(2) using their PAN through Form 141 with Schedule E and issue Form 132, with no TAN or quarterly return. Company, firm and LLP buyers still need a TAN; before 1 October 2026 everyone did.
What is the new form for a lower TDS certificate?
Form 128 under the Income-tax Rules 2026, replacing Form 13; apply to the jurisdictional Assessing Officer (international taxation) before the sale deed.
Which exemptions can an NRI claim?
The successors to Sections 54 (reinvest in a residential house in India), 54EC (specified bonds within six months) and 54F (other long-term assets into a house) — Sections 82, 85 and 86 of the 2025 Act, subject to their conditions.
How much can be repatriated after selling property?
Up to USD 1 million per financial year from the NRO account, including property sale proceeds, with Form 15CA and a CA's Form 15CB and the bank's documentation.
Does a DTAA exempt the gain in India?
Rarely — most Indian treaties give India the right to tax gains on Indian immovable property; the treaty's value is usually a credit for Indian tax in the country of residence, claimed with a TRC and Form 10F.
Can excess TDS be refunded?
Yes, through the seller's return — but it takes a filing season and processing time. A Form 128 certificate avoids the lock-up altogether.