Overview
Capital Gain on Sale of Property and Other Indian Assets by NRI
Capital gain on sale of property and other Indian assets is one of the most cash-intensive moments in an NRI’s India financial life. Therefore, the entire transaction must be coordinated as one integrated engagement — covering pre-sale planning, capital gain computation, buyer-side TDS, ITR-2 filing, refund recovery, and foreign repatriation. We deliver complete capital gain on sale advisory for NRIs at N D Savla & Associates, with end-to-end transaction support across property, listed shares, mutual funds, and other Indian capital assets.
Our qualified Chartered Accountants have handled capital gain on sale transactions across every realistic profile — US-resident NRIs selling Mumbai or Bengaluru residential flats, UK-resident OCI card holders disposing of inherited Indian agricultural land where permitted, Canada-resident NRIs selling Indian commercial property, Australia-resident NRIs redeeming long-held Indian mutual fund holdings, and Dubai-resident NRIs exiting Indian listed equity portfolios. Our practice connects with the wider capital gain framework, coordinating with capital gains on securities, reinvestment exemptions under Sections 54/54F/54EC, repatriation of assets, and filing return of income in India. As a result, every NRI sale transaction becomes one structured tax-and-remittance engagement.
Definition & Scope
What Is Capital Gain on Sale for an NRI?
Capital gain on sale for an NRI is the profit arising when a Non-Resident Indian transfers any Indian capital asset to a buyer. Therefore, capital gain on sale covers a wide range of transactions. The Income Tax Act 1961 classifies each gain as short-term or long-term based on the holding period of the asset.
Types of Indian Assets That Trigger Capital Gain on Sale for NRIs
Residential property — sale of a flat, apartment, villa, or independent house in India. The holding-period threshold for long-term classification is twenty-four months.
Commercial property — sale of office space, shops, warehouses, or other non-residential immovable property. The same twenty-four-month threshold applies.
Plots and land — sale of urban land or agricultural land outside specified rural areas. Sale of rural agricultural land is generally not regarded as a transfer of a capital asset.
Inherited property — sale of any Indian property received through inheritance. The deceased’s holding period and cost of acquisition apply for computation.
Listed equity shares — sale of Indian-listed STT-paid equity through a recognised stock exchange — falling under Section 111A or Section 112A by holding period.
Equity mutual funds — redemption of Indian equity-oriented mutual fund units — also covered by Section 111A or Section 112A.
Debt mutual funds — redemption of Indian debt-oriented mutual fund units — Section 50AA treatment for acquisitions after the cut-off date.
Gold and jewellery — sale of physical gold, gold ETFs, Sovereign Gold Bonds, or jewellery. Different tax treatments apply across these sub-categories.
Unlisted equity shares — sale of pre-IPO holdings, startup shares, or private company shares — falling under Section 112 with the unindexed flat rate on long-term gains.
Buyer-Side TDS
Section 195 TDS on Sale by NRI
Section 195 of the Income Tax Act 1961 is the buyer-side TDS provision for every payment to an NRI that is chargeable to tax in India. Therefore, Section 195 applies to every sale by an NRI — property, shares, mutual funds, gold, or other assets — wherever the resulting capital gain is taxable in India.
Why Is Section 195 TDS Different From Section 194-IA?
Section 194-IA and Section 195 are two different TDS provisions for property sales — applying based on the residential status of the seller. The buyer must apply the correct section.
Section 194-IA applies — when the seller is a Resident Indian. The buyer deducts TDS at one percent on the sale consideration above the prescribed threshold.
Section 195 applies — when the seller is an NRI. The buyer deducts TDS at the higher non-resident capital gains rate.
Common buyer mistake — deducting only one percent under Section 194-IA when buying from an NRI, exposing the buyer to penalty and interest under Section 201.
How Does the Buyer Deduct TDS Under Section 195?
The buyer follows a sequence of steps under Section 195. Our team coordinates each step on behalf of the NRI seller.
Step 1 — Apply for TAN: the buyer obtains a Tax Deduction Account Number before deducting TDS, applying on the Income Tax e-filing portal.
Step 2 — Compute the TDS amount: the buyer applies the prescribed Section 195 rate to the capital gain (where an LDC exists) or the full sale consideration (where no LDC has been obtained).
Step 3 — Deduct and deposit TDS: the buyer deducts TDS from the sale consideration before paying the balance to the NRI, depositing it with the government within the prescribed timeline.
Step 4 — File Form 27Q: the buyer files the quarterly non-resident TDS return on Form 27Q within the prescribed due date.
Step 5 — Issue Form 16A: the buyer issues Form 16A to the NRI showing the TDS deducted. The entry feeds into the NRI’s Form 26AS and AIS.
What Happens If the Buyer Deducts TDS Incorrectly?
Incorrect TDS deduction creates penalty exposure for the buyer and refund hurdles for the NRI seller. Therefore, both parties benefit from careful coordination.
Excess deduction on full sale value — the NRI’s net cash receipt drops significantly; the NRI must claim a refund through ITR-2, a multi-month wait.
Wrong section deducted — deducting under Section 194-IA at one percent instead of Section 195 leaves the buyer facing a shortfall demand.
Late deposit — the buyer faces interest under Section 201 and may attract a penalty under Section 271C; the NRI’s repatriation gets delayed.
Failure to file Form 27Q — the buyer attracts a per-day late fee under Section 234E; the NRI cannot claim TDS credit until Form 27Q processing completes.
Pre-Sale Planning
Section 197 Lower Deduction Certificate (Form 13)
The Section 197 Lower Deduction Certificate (commonly called Form 13) is the most important pre-sale tax planning instrument for every NRI selling Indian property. Therefore, the LDC must be obtained before the sale deed registration — applying after the sale is generally too late.
A Lower Deduction Certificate is a written authorisation issued by the Jurisdictional Assessing Officer of the Income Tax Department. The certificate authorises the buyer to deduct TDS at a rate lower than the default Section 195 rate — calibrating the TDS amount to the NRI’s actual capital gain tax liability rather than the full sale consideration.
How Does the Lower Deduction Certificate Reduce TDS?
Without LDC — the buyer often deducts TDS on the full sale consideration at the higher non-resident rate; the NRI receives a sharply reduced net amount at sale.
With LDC — the buyer deducts TDS only on the actual capital gain (or nil where Section 54 reinvestment fully shelters the gain); the NRI receives most of the consideration upfront.
Refund route without LDC — the NRI must wait until ITR-2 is processed — typically six to nine months or longer.
How to Apply for the LDC on the TRACES Portal
The Form 13 application is filed electronically on the TRACES portal of the Income Tax Department. Our team handles every step for NRI clients.
1
Compile Documents
Purchase deed, sale agreement, cost of acquisition records, improvement expenditure proof, valuation reports, DTAA documents, and reinvestment plan details.
2
File Form 13
Submit Form 13 on the TRACES portal along with the supporting documents and the capital gain working.
3
Respond to AO Queries
The Jurisdictional Assessing Officer typically issues queries seeking clarifications on cost of acquisition, indexation, or reinvestment plans.
4
LDC Issuance
After review, the Assessing Officer issues the certificate authorising the buyer to deduct TDS at the calibrated lower rate.
5
Deliver to Buyer
The NRI provides the original LDC to the buyer for use during the sale deed registration.
The Lower Deduction Certificate typically takes three to five weeks from the date of complete application submission. Therefore, our team advises NRI clients to start the Form 13 process at least eight weeks before the planned sale deed date. Delays often happen where cost-of-acquisition documentation is incomplete or where the Assessing Officer raises detailed queries on indexation or reinvestment plans.
Property Sales
Section 50C Stamp Duty Value Rule
Section 50C of the Income Tax Act 1961 is a critical rule for every NRI selling Indian property. Therefore, the sale consideration disclosed in the sale deed must be reviewed against the state government’s stamp duty value before the sale closes.
Section 50C creates a deeming fiction for capital gain computation on immovable property. The rule kicks in where the sale consideration disclosed in the sale deed is less than the stamp duty value, with the state government’s circle rate determining the applicable stamp duty value. Therefore, the stamp duty value is deemed to be the full value of consideration — and the NRI may face capital gain tax on an amount higher than what actually changed hands.
When Does Section 50C Get Triggered?
Sale consideration below stamp duty value — Section 50C triggers when the agreement price is less than the state government’s circle rate.
Tolerance band protection — variations within the prescribed percentage of stamp duty value do not trigger the substitution.
Date of agreement vs date of registration — where the dates differ, the stamp duty value on the agreement date may apply, provided part consideration was paid through banking channels on or before that date.
Reference to Valuation Officer — where the NRI disputes the stamp duty value, the NRI can request the Assessing Officer to refer the matter to the Departmental Valuation Officer.
Our Methodology
Eight-Step Capital Gain on Sale Process
Our team follows a structured eight-step methodology for every NRI capital gain on sale engagement. Therefore, the sequence covers pre-sale planning through post-sale repatriation as one integrated workflow.
1
Pre-Sale Tax Modelling
We model the expected capital gain using the planned sale consideration, cost of acquisition, cost of improvement, and holding period — so the NRI sees the expected Indian tax liability before signing. We identify the applicable section (Section 112 LTCG for property, Section 112A for listed equity, Section 50AA for debt mutual funds) and map the relevant DTAA position.
2
Section 197 Lower Deduction Certificate Application
We file Form 13 on the TRACES portal with complete documentation so the LDC reaches the buyer before the sale deed registration — substantially improving the NRI’s cash flow at closing.
3
DTAA Treaty Documentation
We coordinate the Tax Residency Certificate from the NRI’s country of residence, file Form 10F electronically, and identify the applicable DTAA article on capital gains for further TDS rate optimisation.
4
Sale Deed Registration and TDS Deduction
The sale deed gets registered, the buyer deducts TDS at the LDC-calibrated rate, deposits it, and issues Form 16A. We verify the Form 27Q filing by the buyer.
5
Reinvestment Planning Under Sections 54/54F/54EC
Where the NRI plans to reinvest the gain for exemption, we map the timeline against the Section 54, 54F, or 54EC windows and coordinate the Capital Gains Account Scheme deposit where reinvestment cannot complete before the ITR due date.
6
Form 26AS and AIS Reconciliation
We reconcile the Section 195 TDS deducted by the buyer against Form 26AS and the AIS download, so the TDS chain stays clean before the ITR-2 filing.
7
ITR-2 Schedule CG Filing
We file ITR-2 with the complete Schedule CG — capturing the capital gain computation, reinvestment exemption claims, TDS credit, and refund claim where applicable.
8
Form 15CA-15CB Repatriation
Where the NRI wants to repatriate the net proceeds, we issue the Form 15CB CA certificate, coordinate Form 15CA filing, and work with the NRI’s Authorised Dealer bank for the SWIFT remittance under the USD one million scheme.
Common Cross-Border Profiles
Common Capital Gain on Sale Scenarios We Handle
Our team handles capital gain on sale across every realistic NRI profile. Therefore, the right approach changes with the asset class, the country of residence, and the family situation.
US NRI Selling a Mumbai Flat
Section 197 LDC pre-application, US-India DTAA, Section 195 buyer-side TDS coordination, and US Schedule D coordination.
UK OCI Holder, Inherited Bengaluru Property
Succession certificate, the deceased’s holding period, and the Section 50C stamp duty value check.
Canada NRI Disposing of Commercial Space
Section 112 LTCG with the Section 54F reinvestment route into a residential house.
Australia NRI Redeeming Equity Mutual Funds
Section 112A LTCG with grandfathering FMV application on long-held holdings.
Dubai NRI Selling a Residential Plot
Section 54EC bond reinvestment within six months of the transfer.
Singapore NRI Exiting Listed Equity
Broker-level Section 195 TDS with Singapore-India DTAA application.
Multi-Heir Family Selling Inherited Property
Separate USD one million repatriation per legal heir with coordinated CA certification.
NRI Parking Gain in CGAS
Capital Gains Account Scheme deposit before the Section 54 reinvestment completes.
Our Services
Our Capital Gain on Sale Advisory Services
Our practice runs the full transaction chain — from pre-sale modelling and the Section 197 LDC through buyer coordination, ITR-2 filing, and post-sale repatriation — as one integrated engagement.
01
Pre-Sale Tax Modelling & Capital Gain Forecasting
We model the expected capital gain before the sale agreement is signed — using the planned consideration, cost of acquisition, cost of improvement, and holding period. We identify the applicable section (Section 112, 112A, or 50AA) and map the relevant DTAA position, so the NRI sees the Indian tax liability upfront.
Income Tax Act – Section 112, 112A, 50AA
02
Section 197 Lower Deduction Certificate (Form 13) Application
We file Form 13 on the TRACES portal with the complete capital gain working and supporting documents, respond to Assessing Officer queries, and obtain the LDC before sale deed registration — calibrating the buyer’s TDS to the actual capital gain rather than the full sale consideration.
Income Tax Act – Section 197, Form 13
03
Section 195 Buyer-Side TDS & Form 27Q Coordination
We coordinate the buyer’s Section 195 obligations — TAN application, TDS computation and deposit, Form 27Q quarterly return, and Form 16A issuance. We then reconcile the deducted TDS against Form 26AS and the AIS so the TDS credit chain stays clean for ITR-2.
Income Tax Act – Section 195, Form 27Q
04
Section 50C Review & DTAA Treaty Documentation
For property sales, we review the disclosed sale consideration against the state circle rate under Section 50C, factoring in the tolerance band and agreement-date rules. We also coordinate the Tax Residency Certificate and Form 10F filing, and identify the applicable DTAA capital gains article.
Income Tax Act – Section 50C, DTAA
05
Section 54/54F/54EC Reinvestment & CGAS Planning
Where the NRI plans to shelter the gain, we map the timeline against the Section 54, 54F, and 54EC reinvestment windows and coordinate the Capital Gains Account Scheme deposit where reinvestment cannot complete before the ITR due date. Our
Reinvestment Exemptions service covers all three sections.
Income Tax Act – Section 54, 54F, 54EC
06
ITR-2 Filing, Refund Recovery & Form 15CA-15CB Repatriation
We file ITR-2 with the complete Schedule CG, claim refunds of excess Section 195 TDS, and issue the Form 15CB CA certificate. We then coordinate Form 15CA filing and the Authorised Dealer bank SWIFT remittance under the USD one million scheme — closing the sale-to-repatriation cycle through our
15CA-15CB Filing service.
Form 15CA-15CB – USD One Million Scheme
Pitfalls to Avoid
Common Mistakes NRIs Make During Sale Transactions
Our team has observed the same set of capital gain on sale mistakes recurring across self-managed NRI transactions. Therefore, sharing this list helps every NRI avoid avoidable cash-flow hits and refund delays.
Not Applying for the Lower Deduction Certificate
Selling without Form 13 means the buyer deducts Section 195 TDS on the full sale consideration at the higher rate — leaving the NRI in a long refund cycle through ITR-2.
Buyer Deducts Under Section 194-IA
A buyer wrongly deducting only one percent under Section 194-IA instead of Section 195 later faces a shortfall demand, and the repatriation stalls because Form 27Q does not match.
Ignoring Section 50C Stamp Duty Value
Disclosing a sale consideration below the state circle rate lets Section 50C substitute the stamp duty value as the deemed full value of consideration.
Treating Inherited Property as Short-Term
Treating recently inherited property as short-term ignores the deceased’s holding period, which actually makes the asset long-term in most cases.
Missing the Section 54/54F Reinvestment Window
Missing the prescribed reinvestment time window loses the exemption — a CGAS deposit before the ITR due date could have preserved eligibility.
Skipping ITR-2 Filing
Assuming Section 195 TDS is the final tax and not filing ITR-2 locks excess TDS with the Department and forfeits capital loss carry-forward.
Document Checklist
Documents Required for an NRI to Sell Property in India
Speed and accuracy of capital gain on sale depend on document quality. Therefore, our team uses a standardised checklist for property sales.
Original purchase deed — establishes the NRI’s title and the cost of acquisition for capital gain computation.
Chain of past sale deeds — needed where the property has changed hands multiple times to establish clean title.
Property tax receipts — current and historical municipal tax receipts establishing continuous payment.
Encumbrance certificate — from the local Sub-Registrar Office confirming the property is free from charges.
Society no-objection certificate — required where the property is in a co-operative housing society.
Building plan and approvals — the original sanctioned building plan and occupancy certificate where applicable.
NRI’s PAN card and passport — Indian PAN card is mandatory; passport establishes NRI status.
OCI or PIO card copy — where the NRI holds OCI or PIO status.
Tax Residency Certificate (TRC) — from the NRI’s country of residence for DTAA application.
Form 10F acknowledgement — filed electronically on the Income Tax e-filing portal as DTAA support.
Section 197 Lower Deduction Certificate — issued by the Jurisdictional Assessing Officer before sale deed registration.
Power of attorney — where a representative handles the sale on the NRI’s behalf in India.
Buyer’s PAN and TAN — needed for Section 195 TDS deduction and Form 27Q filing.
Inheritance documents — death certificate, will, succession certificate, or legal heir certificate for inherited properties.
Improvement expenditure records — bills, contractor receipts, and renovation invoices to claim cost of improvement.
A Different Workflow
Capital Gain on Sale of Mutual Funds and Shares
Capital gain on sale of mutual funds and listed shares follows a different operational workflow from property sales. Therefore, the broker, the Asset Management Company (AMC), or the depository participant acts as the TDS deductor — not an individual buyer. Our team coordinates the sale through the relevant intermediary.
How Is TDS Deducted on Mutual Fund Redemption by an NRI?
On mutual fund redemption by an NRI, the Asset Management Company deducts Section 195 TDS at the prescribed rate, credits the net proceeds to the NRI’s NRO or PIS account, and issues Form 16A which feeds into Form 26AS and the AIS.
Equity-oriented mutual funds — TDS at the Section 111A or Section 112A rate based on holding period.
Debt-oriented mutual funds (Section 50AA) — TDS at the slab rate applicable to NRIs in the relevant income category.
DTAA reduction at AMC level — the NRI can submit the Tax Residency Certificate and Form 10F to the AMC for treaty rate application.
Section 197 LDC at AMC level — for substantial redemptions, the LDC instructs the AMC to deduct at the lower rate.
How Is TDS Deducted on Sale of Listed Shares by an NRI?
On sale of listed shares through an Indian broker, the broker calculates the capital gain, deducts Section 195 TDS at the prescribed rate, and credits the net amount to the NRI’s NRO or PIS account.
Section 111A short-term — for holdings of twelve months or less, the broker deducts at the concessional flat rate.
Section 112A long-term — for holdings beyond twelve months, the broker deducts at the concessional flat rate above the annual exemption threshold.
Form 16A from the broker — issued on a quarterly basis; the NRI cross-checks against Form 26AS.
Final Stage
Post-Sale Repatriation to the Foreign Account
Post-sale repatriation is the final stage of every NRI capital gain on sale transaction. Therefore, the net sale proceeds (after Section 195 TDS) must move from India to the NRI’s foreign bank account through the prescribed FEMA route.
How Does an NRI Repatriate Sale Proceeds to a Foreign Account?
1
Deposit into NRO Account
The buyer transfers the net sale proceeds (after TDS) into the NRI’s NRO account in India.
2
USD One Million Scheme Application
The NRI uses the USD one million scheme under FEMA Master Directions — repatriation up to one million US Dollars per financial year per NRI.
3
Form 15CB Issuance
A Chartered Accountant issues Form 15CB certifying that applicable Indian taxes have been paid on the remitted amount.
4
Form 15CA Filing
The NRI files Form 15CA Part C on the Income Tax e-filing portal using the Form 15CB acknowledgement number.
5
Authorised Dealer Bank Coordination
The AD bank verifies both forms and processes the SWIFT MT103 transfer to the NRI’s foreign bank account.
Where multiple legal heirs inherit one property, each legal heir gets a separate USD one million repatriation limit per financial year — a key planning point for multi-heir family sales.
Who We Serve
Who We Serve in Our Capital Gain on Sale Practice
Our practice covers the full spectrum of NRI sale profiles. Furthermore, we tailor every engagement to the asset class and the country of residence.
US-resident NRIs — residential property sales, Section 197 LDC, US-India DTAA, and post-sale repatriation under USD one million.
UK-resident OCI card holders — inherited Indian property sales, succession certificate procurement, and UK-India DTAA.
Canada-resident NRIs — commercial property sales, Section 54F reinvestment into a residential house, and Canada-India DTAA.
Australia-resident NRIs — listed equity portfolio exits, equity mutual fund redemptions, and Australia-India DTAA.
Dubai and Gulf-region NRIs — residential and plot sales, Section 54EC bond reinvestment, and limited-DTAA scenarios.
Singapore-resident NRIs — unlisted Indian startup share sales, Section 112 unindexed flat rate, and Singapore-India DTAA.
Multi-heir family inheritance sales — coordinated Section 197 LDC across legal heirs and separate USD one million bandwidths.
Returning Indians completing pre-return Indian asset sales — capital gain crystallisation while still NRI under FEMA.
NRIs with mixed-asset sales in one financial year — combined Schedule CG preparation across property, securities, and mutual funds.
NRIs claiming Section 54/54F/54EC reinvestment exemption — CGAS coordination, time-window tracking, and ITR-2 disclosure.
Why Choose Us
Why N D Savla & Associates for Your Sale Advisory
NRIs choose our capital gain on sale practice for five reasons rooted in real delivery experience.
Qualified Chartered Accountants — every engagement is reviewed by a qualified CA with specialised NRI tax, FEMA, and international taxation experience.
End-to-end transaction support — we handle pre-sale planning, the Section 197 LDC, buyer coordination, ITR-2 filing, refund recovery, and post-sale repatriation as one engagement.
Cross-country coverage — we have handled NRI sale transactions for clients from the US, UK, Canada, Australia, UAE, Singapore, and the Gulf region.
Section 197 LDC speed — we maintain TRACES portal access and direct coordination with Jurisdictional Assessing Officers, accelerating LDC turnaround.
Mumbai-based, remote-capable — our practice is based in Mumbai but works fully remotely with NRI clients across all time zones.
Broader Practice
Related NRI Tax and Capital Gain Compliance Services
Our wider NRI tax practice covers the full compliance cycle around capital gain on sale. Moreover, integrated coordination saves the NRI significant time.
Frequently Asked Questions
Common Questions on Capital Gain on Sale by NRI
What is capital gain on sale of property for an NRI in India?
Capital gain on sale of property for an NRI is the profit arising when a Non-Resident Indian transfers immovable property situated in India to a buyer. The capital gain equals the full value of consideration received, reduced by the cost of acquisition, the cost of improvement, and the transfer expenses. The classification as short-term or long-term depends on the holding period — twenty-four months or less is short-term, more than twenty-four months is long-term. The buyer must deduct TDS under Section 195 of the Income Tax Act 1961 before paying the sale consideration to the NRI. Without a Lower Deduction Certificate from the Income Tax Department, the buyer typically deducts TDS on the full sale value at the higher non-resident rate — leading to substantial excess TDS that the NRI must claim as refund through ITR-2. Our
Capital Gain hub covers the broader framework.
How is TDS deducted on sale of property by NRI under Section 195?
TDS on sale of property by NRI is deducted by the buyer under Section 195 of the Income Tax Act 1961 — not under Section 194-IA which applies only to resident sellers. The buyer must obtain a TAN (Tax Deduction Account Number) before deducting TDS. The buyer deducts TDS at the applicable rate on the sale consideration (or on the capital gain where a Section 197 Lower Deduction Certificate has been obtained) before paying the balance to the NRI. The buyer deposits the deducted TDS with the government, files Form 27Q within the prescribed quarterly timeline, and issues Form 16A to the NRI seller. The NRI then claims credit for this TDS in ITR-2 against the actual capital gains tax liability. Our
Filing Return of Income in India page handles the ITR-2 filing.
How can an NRI reduce TDS on property sale through a Lower Deduction Certificate?
An NRI seller can reduce TDS on property sale by applying for a Lower Deduction Certificate under Section 197 of the Income Tax Act. The application is filed in Form 13 on the TRACES portal of the Income Tax Department. The application requires the NRI to project the capital gain — providing the purchase deed, sale agreement, cost of acquisition, cost of improvement, indexation working (where applicable), DTAA application, and any reinvestment exemption claim under Section 54, 54F, or 54EC. The Jurisdictional Assessing Officer reviews the application and issues a certificate authorising the buyer to deduct TDS at the lower rate calibrated to the actual capital gain tax liability. The Lower Deduction Certificate must be obtained before the sale deed registration — applying after the sale is too late. Our
Repatriation of Assets page covers post-sale outward remittance.
What is the difference between Section 194-IA TDS and Section 195 TDS on property sale?
Section 194-IA and Section 195 are two different TDS provisions for property sales — applying based on the residential status of the seller. Section 194-IA applies when the seller is a Resident Indian, with a TDS rate of one percent on the sale consideration above the prescribed threshold. Section 195 applies when the seller is an NRI, with a much higher TDS rate calibrated to the non-resident capital gains rate. The buyer purchasing from an NRI must use Section 195 — not Section 194-IA. Buyers often mistakenly deduct only one percent under Section 194-IA when buying from an NRI, exposing themselves to penalty and interest under Section 271C and Section 201. Our
Capital Gains on Securities page covers TDS on securities sales.
Can an NRI claim Section 54 reinvestment exemption on sale of property?
Yes, an NRI can claim Section 54 reinvestment exemption on long-term capital gain arising from the sale of a residential house property in India. The NRI must reinvest the long-term capital gain into another residential house property in India. The reinvestment must happen within one year before or two years after the sale date — or within three years where the new house is being constructed. Where the reinvestment cannot be completed before the income tax return filing due date, the unspent capital gain can be parked in a Capital Gains Account Scheme (CGAS) deposit with a notified PSU bank. Section 54F applies similarly where the sale is of a non-residential long-term asset and the reinvestment goes into a residential house. Section 54EC applies where the gain is reinvested in specified notified bonds within six months. Our
Capital Gains Tax Exemptions on Reinvestment page covers all three sections in detail.
How does an NRI repatriate the net sale proceeds to the foreign bank account?
After completing the sale and the TDS payment, the NRI repatriates the net sale proceeds through two steps. First, the funds get deposited into the NRI’s NRO account in India. Second, the NRI uses the USD one million scheme under FEMA Master Directions to remit up to one million US Dollars per financial year to the foreign bank account. The repatriation requires Form 15CA filed by the NRI on the Income Tax e-filing portal and Form 15CB issued by a Chartered Accountant certifying that applicable Indian taxes have been paid. The Authorised Dealer bank verifies both forms and processes the SWIFT transfer to the NRI’s foreign bank account. Multiple legal heirs inheriting one property each receive a separate USD one million repatriation limit per financial year. Our
15CA-15CB Filing service handles the certification.
What are the key documents needed for an NRI to sell property in India?
The key documents needed for an NRI to sell property in India include the original purchase deed or allotment letter, the chain of past sale deeds (where the property has changed hands), the property tax receipts, the encumbrance certificate, the no-objection certificate from the housing society (where applicable), the building approval and plan sanction documents, the NRI seller’s Indian PAN card and passport, OCI card or PIO card copy where applicable, the Tax Residency Certificate from the country of residence for DTAA application, Form 10F filing acknowledgement, the Section 197 Lower Deduction Certificate (where obtained), the power of attorney where a representative handles the sale on the NRI’s behalf, and the buyer’s PAN card and TAN. For inherited properties, the death certificate, will, succession certificate, or legal heir certificate is also required. Our
Tax Residency Certificate page covers TRC procurement.
About the Author and Our Capital Gain on Sale Practice
This capital gain on sale guide is published by the NRI and cross-border tax practice of N D Savla & Associates, a Chartered Accountancy firm based in Mumbai, India. Our team comprises qualified Chartered Accountants registered with the Institute of Chartered Accountants of India (ICAI). We hold focused practice in NRI capital gain on sale advisory across residential property, commercial property, listed shares, mutual funds, gold, and other Indian capital assets. Our work covers Section 195 buyer-side TDS coordination and Section 197 Lower Deduction Certificate (Form 13) applications on the TRACES portal, Form 27Q buyer-side TDS return tracking, Section 50C stamp duty value review, Section 54, 54F, and 54EC reinvestment planning, Capital Gains Account Scheme (CGAS) coordination, ITR-2 Schedule CG filing, excess TDS refund claims, and Form 15CA-15CB post-sale repatriation under the USD one million scheme. Our office serves NRI clients across the United States, United Kingdom, Canada, Australia, UAE, Singapore, and the Gulf region. Contact: nainitsavla@savlagroup.in · +91 98190 00511.
Selling an Indian Asset? Talk to Our NRI CA Team Today.
End-to-end NRI capital gain on sale services — pre-sale tax modelling, Section 197 Lower Deduction Certificate (Form 13) on the TRACES portal, DTAA documentation through TRC and Form 10F, buyer-side Section 195 TDS and Form 27Q tracking, Section 50C stamp duty value review, Section 54/54F/54EC reinvestment and CGAS planning, ITR-2 Schedule CG filing, excess TDS refunds, and Form 15CA-15CB repatriation under the USD one million scheme.
📞 +91 98190 00511 · +91 91670 58000 · +91 98190 00445 · ✉ nainitsavla@savlagroup.in
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