TDS on property sale estimator for NRIs
When a non-resident sells property in India, the buyer must deduct tax before paying. Without a certificate, this is usually worked out on the full sale price, so it can be far more than the tax on your actual gain. Enter your figures to compare the two. It is an estimate to be confirmed with a chartered accountant.
This is general information, not legal advice for your situation. What you type stays in your browser unless you choose to send it to an advocate.
Your sale
The lower deduction certificate
The certificate lets the buyer deduct tax at a lower rate, or none, when your expected income justifies it. Form 13 and Section 197 are the old names. For applications made under the Income-tax Rules, 2026 the form is Form 128, under Section 395(1) of the Income-tax Act, 2025.
- Check that your PAN is active and that you can sign in to the e-Filing portal.
- Ask a chartered accountant to work out the gain and your expected tax for the year. Keep the purchase deed, proof of costs and the sale agreement ready to support it.
- File Form 128 online. The application goes through the e-Filing or TRACES portal.
- The Assessing Officer issues a certificate with the rate and the period it covers, if satisfied.
- Give the certificate to the buyer before payment. The buyer quotes it when reporting the tax.
- File your Indian return for the tax year, which is also how any excess deduction comes back as a refund.
Start well before the sale date, since the buyer cannot use a certificate that has not been issued. If you cannot attend to the paperwork from abroad, our power of attorney maker covers the authority your attorney would need for the sale itself.
What the buyer does
- The deduction falls under Section 393(2), Table Serial No. 17, which replaced Section 195.
- From 1 October 2026, a resident individual or Hindu undivided family can deposit and report through Form 141, Schedule E, using PAN and without a TAN. Other buyers remain on the TAN route.
- Under Form 141, the e-Filing guidance says tax is paid within 30 days from the end of the month of deduction.
- The seller’s PAN matters. Without a valid one, the buyer needs other details from you, or must deduct at a higher rate under Section 397(2).
Your country of residence
Your country of residence may tax the same gain and give credit for Indian tax. A tax adviser there can confirm how that works. For the next step, see sending the sale money abroad. You can also book a call through the advocate check form above.
Common questions
How much tax is deducted when an NRI sells property in India?
A buyer from a non-resident deducts under Section 393(2) of the Income-tax Act, 2025. For a long-term sale the rate is 12.5 per cent plus surcharge and 4 per cent cess, which comes to between 13 and 14.95 per cent. Without a certificate, buyers usually apply it to the full price.
What is Form 128 and does it replace Form 13?
Yes. Form 128 under the Income-tax Rules, 2026 replaced Form 13 from 1 April 2026. The seller uses it to apply for a certificate of lower or nil deduction under Section 395(1) of the Income-tax Act, 2025. The Assessing Officer sets the rate and period if your expected income justifies it.
When is a property sale long-term or short-term for an NRI?
Property held for more than 24 months before the sale is long-term, and the gain is taxed at 12.5 per cent. Indexation relief is limited to residents. Property held for 24 months or less is short-term, and the gain is taxed at slab rates, with tax deducted at 30 per cent plus surcharge and cess.
Does the buyer need a TAN to buy property from an NRI?
Not always. From 1 October 2026, a resident individual or Hindu undivided family buying from a non-resident can deposit and report the tax using PAN through Form 141, Schedule E. Other buyers, including non-resident buyers, still follow the TAN route. The buyer remains responsible for deducting the correct amount.
Can I get back tax that was deducted beyond what I owe?
Yes. If more tax was deducted than you owe, you can claim the excess as a refund by filing your Indian income tax return for that tax year. Ask the buyer for the TDS certificate and check that the deduction appears against your PAN. A lower deduction certificate reduces the amount held back in the first place.
Does reinvesting the sale money reduce my tax?
It can. The Act gives relief for a long-term gain on a residential house when it is reinvested in a residential house in India within set time limits, and other relief may apply. This estimator leaves such relief out. Ask a chartered accountant whether it applies and whether to include it in a Form 128 application.
- Memorandum explaining the Finance Bill, 2026 (Section 397 TAN relaxation, Section 395, tax rates), Union Budget
- Finance Bill, 2026, First Schedule, Part II (deduction rates and surcharge for non-residents), Union Budget
- Income Tax Forms FAQs (Forms 128, 145 and 146, Section 395), e-Filing portal
- Form 141 Schedule E user manual (TDS on property bought from a non-resident), e-Filing portal
- Form 141 user manual (time limits for deposit and filing), e-Filing portal
- Income-tax Act, 2025, Section 197 (long-term gains at 12.5 per cent), EZTax text of the Act
- Income-tax Act, 2025, Section 202 (slab rates), EZTax text of the Act
- TDS on Sale of Property by Resident and NRI Sellers, TaxGuru, April 2026