How to Sell Property in India as an NRI: TDS Under Section 195, Form 13 & Repatriation Guide (2026)
By Lokesh, FCA, Founder & Cross-Border Tax Expert · Published 2026-10-08
How to Sell Property in India as an NRI: TDS Under Section 195, Form 13 & Repatriation Guide (2026)
Selling property in India from the United States is rarely just a real-estate transaction. For an NRI, it is a tax, compliance and banking exercise that starts well before the sale deed is signed and often continues long after the money reaches your account.
If you are planning an NRI property sale in India, you are probably asking some version of these five questions:
1. How much TDS will be deducted?
The buyer may have to withhold a significant amount from the sale price, and it can be more than you expect.
2. Is the TDS my final tax?
Not necessarily. What is withheld and what you ultimately owe can be different numbers.
3. Can I reduce the amount withheld?
An eligible NRI may apply for a lower or nil deduction certificate. Many people still search for this as a "Form 13 lower deduction certificate", but approval is never automatic.
4. How do I calculate capital gains?
Your acquisition date, purchase cost, improvement expenses and whether the property was inherited can all change the answer.
5. How do I transfer the sale proceeds abroad?
Repatriation is governed by FEMA and RBI rules, and your bank will expect tax and transaction documentation.
A Note on 2026 Terminology
The Income-tax Act, 2025 applies from 1 April 2026 and replaces the Income-tax Act, 1961 for periods from that date. It renumbers many provisions and forms:
Earlier Reference 2026 Framework
Section 195 — Withholding on payments to non-residents Applicable 2025 Act withholding framework Section 197 & Form 13 — Lower/nil deduction certificate Section 395(1), Form 128 Form 15CA — Remittance information Form 145 Form 15CB — Accountant's certificate Form 146 Sections 54, 54EC & 54F — Capital gains reliefs Corresponding renumbered 2025 Act sections
Important: The terminology changed under the 2025 Act framework. When searching older articles, you may still encounter the earlier section and form numbers.
Section 195 TDS on Property Sale: What It Means in 2026
When payment is made to a non-resident seller for the transfer of property in India, the buyer has withholding obligations.
Between resident buyers and sellers, buyers withhold a small flat percentage (1%). That resident rule does NOT apply when the seller is an NRI.
Instead, withholding for NRIs is linked to the tax chargeable on the gain, plus applicable surcharge and cess.
What Determines the Amount Withheld?
- Nature of gain: Long-term vs. short-term
- PAN & Status: Furnishing a valid PAN prevents higher penalty rates
- Lower Deduction Certificate: Form 128 / Form 13 officially authorizes lower withholding
TDS Is Not Your Final Tax
TDS is an advance collection of tax. Your actual NRI capital gains tax is determined when you file your Indian income tax return.
The Final Outcome
Situation What Happens
Withholding > actual tax You claim a refund upon filing your return Withholding = actual tax You report the transaction and claim tax credit Withholding < actual tax You pay the balance tax, along with applicable interest
Key takeaway: A large TDS deduction does not automatically mean that you owe that entire amount as your final tax liability.
Lower TDS Certificate: From Form 13 to Form 128
A lower or nil deduction certificate authorizes the buyer to withhold at a reduced rate based on your estimated capital gain rather than the full sale price.
Documents Required for Form 128 (Form 13)
Prepare the following documents:
- PAN, Passport & residential status proof
- Purchase deed, builder agreement & payment receipts
- Invoices for capital improvements
- Draft agreement to sell
- For inherited property: Will, probate, succession certificate & predecessor's purchase documents
- Estimated capital gains computation signed by a Chartered Accountant
NRI Property Repatriation: Transferring Money to the US
Moving sale proceeds abroad is governed by FEMA and RBI guidelines.
The Repatriation Flow
1. NRO Account Credit
Sale proceeds land in an NRO account.
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2. USD 1 Million Facility
NRIs/PIOs may remit up to $1,000,000 USD per financial year from eligible NRO balances.
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3. Bank Documentation
Form 145 (Form 15CA) and Form 146 (Form 15CB) are required by the bank to authorize foreign currency transfer.
Need Expert Guidance?
Navigating property TDS, Form 128 lower deduction applications, and FEMA repatriation requires precise tax computation.
Ask Yukti AI
Share your sale details with Yukti AI on NRITAX.AI to prepare your cost history.
Connect with a CA
Work with a licensed Chartered Accountant to file Form 128/146 and process your return.
Your NRI Property Sale Checklist
Before selling
☐ Confirm your residential status ☐ Review acquisition and improvement costs ☐ Determine long-term vs. short-term capital gain ☐ Collect property and ownership documents ☐ Estimate the expected TDS
Before receiving the sale proceeds
☐ Review the applicable withholding requirement ☐ Consider whether a lower/nil deduction certificate is appropriate ☐ Coordinate with your buyer and CA
Before repatriating funds
☐ Credit proceeds to the appropriate NRO account ☐ Complete required tax documentation ☐ Coordinate Form 145 / Form 146 requirements with your bank ☐ Confirm FEMA/RBI repatriation eligibility and limits