CA for NRIs selling property in India — save lakhs in TDS
The default TDS on an NRI property sale is 12.5% (LTCG) or 30% (STCG) of the sale value — often 5–10× more than the actual tax due. A Section 197 lower-TDS certificate fixes that, and Form 15CB gets the money out of India cleanly. We handle both.
The TDS problem for NRIs
When a resident sells property in India, the buyer deducts 1% TDS on sale value above Rs 50 lakh (Section 194-IA). When an NRI sells, Section 195 kicks in and the buyer must deduct TDS on the entire sale value at the applicable capital-gains rate. On a Rs 2 crore sale, that is roughly Rs 25 lakh (LTCG) locked with the Department. You get it back via ITR — but not for 12–18 months, and only after refund processing.
How a Section 197 certificate saves the money
Form 13 (application under Section 197) asks the Assessing Officer to certify a reduced rate — computed on the actual expected gain, not the sale value. Once granted, the buyer deducts only that amount. The balance stays with you at closing.
Illustrative only. Actual numbers depend on your cost of acquisition, indexation choice (post-Budget 2024), holding period and surcharge. TODO(client): confirm this reflects your typical client profile.
Our process
- 1
Assessment call — sale details, expected gain, timelines.
- 2
PAN & residency check; compute expected capital gain.
- 3
Prepare and file Form 13 with your Assessing Officer.
- 4
Follow-up until the Section 197 certificate is issued.
- 5
Coordinate with buyer for TDS deduction at the certified rate.
- 6
Form 15CB + 15CA filing for repatriation of net proceeds.
- 7
ITR filing to reconcile TDS and claim any residual refund.
Documents we'll ask for
- PAN & passport (with visa/OCI page)
- Address proof — India + overseas
- Sale agreement (draft or executed)
- Original purchase deed & payment proofs
- Any capital improvement invoices
- Bank account details (NRO/NRE)
- Buyer PAN & contact
- Tax Residency Certificate (for DTAA)
FAQs
For long-term capital gains (property held > 24 months) the base TDS rate under Section 195 is 12.5% of the sale value (post-Budget 2024 rate) plus applicable surcharge and cess. For short-term gains it is 30% plus surcharge and cess. Crucially, TDS is on the sale value — not the gain — so on a Rs 2 crore sale the buyer will deduct ~Rs 25 lakh even if your actual tax works out to a fraction of that.