NRI Property Sale: 3 Tax Rules You Must Know

Selling property in India as an NRI? You face capital gains tax, heavy TDS, and FEMA rules before you can move money abroad. Here is what applies to your situation and how to reduce the tax bite legally.

Here's what happened: Budget 2024 changed long-term capital gains tax on property to 12.5% with no indexation, removing the earlier 20%-with-indexation option for NRI sellers.. Buyers of NRI-owned property must deduct TDS at 20% (plus surcharge and cess) on the full sale consideration, creating an upfront cash lock for the NRI seller.. FEMA rules allow repatriation of up to USD 1 million per financial year from property sale proceeds, routed through an NRO account with mandatory CA certification..

What you should do: Apply for a Lower Deduction Certificate under Section 197 from the Income Tax department before the sale is registered to reduce TDS to your actual liability.. Ask your CA to prepare Form 15CB and file Form 15CA online before transferring sale proceeds from your NRO account abroad — banks will not process the wire without these.. Calculate whether a Section 54 or Section 54EC exemption (reinvesting in another property or REC/NHAI bonds within 6 months) can reduce or eliminate your capital gains tax outflow..

If your total Indian income — including the property gain — falls below the basic exemption limit, file an ITR to claim a full TDS refund; many NRIs skip this and forfeit the money entirely.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.