If I'm an NRI in Australia, how much tax is withheld when I sell Indian property?

The buyer must deduct TDS under Section 195 on the full sale value at the long-term capital-gains rate (12.5% plus surcharge and cess) — not on your profit. Because the India-Australia treaty leaves immovable-property gains taxable in India, the rate itself doesn't drop; what you control is the withholding, which a Form 13 certificate brings down to your actual gain.

Why is so much of my sale proceeds held back, and can I avoid it?

Because the default deduction is on the gross sale value, not the gain — on a typical sale that traps ₹20-30 lakh you'll only recover at the next ITR. A Form 13 lower-deduction certificate (Section 197), filed before the sale, gets the Assessing Officer to certify a deduction based on your real gain, so the buyer withholds far less and most of your money reaches you at closing. For an NRI in Australia this is usually the single biggest lever on a property sale.

Does the India-Australia treaty reduce capital-gains tax on Indian property?

No — Indian property gains taxed in India under Article 13(1); AUD-converted gain ALSO flows into your ATO CGT schedule, so the gain stays taxable in India at 12.5% for long-term holdings. Australia taxes worldwide income, so you also report the gain there and claim a foreign tax credit for the Indian tax paid. The treaty's role here is to prevent the same gain being taxed twice, not to lower the Indian rate.

Australia NRIs · Property Sale Tax

Property sale tax for NRIs in Australia

When an NRI in Australia sells Indian property, the buyer withholds tax on the whole sale value — a Form 13 certificate brings that down to tax on the actual gain.

When you sell Indian property as an NRI living in Australia, the tax on the gain itself is governed by India — under the India-Australia treaty, immovable property is taxable in the country where it sits (Indian property gains taxed in India under Article 13(1); AUD-converted gain ALSO flows into your ATO CGT schedule), so the treaty does not lower the headline 12.5% long-term capital-gains rate. The expensive problem is the withholding: the buyer must deduct TDS on the entire sale consideration, not just your profit, which routinely blocks ₹20-30 lakh of cash at closing. The fix is a Form 13 lower-deduction certificate (Section 197), which drops the deduction to a figure based on your real gain.

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India-Australia key facts: property sale tax

Default Section 195 rate	12.5%
India-Australia DTAA treaty rate	12.5%
Your saving via the treaty	No rate reduction — see note below
Treaty article / basis	Indian property gains taxed in India under Article 13(1); AUD-converted gain ALSO flows into your ATO CGT schedule
Your TRC issuing authority	Australian Taxation Office (ATO)

Rates reflect India's domestic Section 195 withholding and the India-Australia treaty. Surcharge and cess apply on top where relevant.

How it works on the India side

On an NRI property sale the buyer deducts TDS under Section 195 on the full sale value at the long-term capital-gains rate plus surcharge and cess — a much larger sum than the tax you actually owe, because your taxable gain is only the profit after indexation or the 1 April 2001 fair-market-value step-up, not the whole price. That over-deduction sits with the government until you file your return and claim it back, which can be a year or more of blocked cash.

Form 13 (Section 197) is the way to avoid the block rather than chase a refund afterwards. Filed before the sale on the TRACES portal, it asks the Assessing Officer to certify a lower or nil deduction based on your computed gain. With the certificate in hand the buyer deducts only the certified amount, so most of your proceeds reach you at closing instead of being trapped for a year.

What changes because you live in Australia

Australian residents are taxed on worldwide income, so this Indian income also flows onto your ATO return, with a Foreign Income Tax Offset (FITO) crediting the Indian tax already paid against your Australian liability. The FITO is capped at the Australian tax that would have applied to that same Indian slice, so if your Indian withholding ran higher, the excess is wasted unless carried forward correctly. One trap most NRIs miss: assets held before you became an Australian resident get a deemed cost base reset to their AUD market value on your arrival day (s.855-45), so using the original rupee cost overstates the gain and overpays Australian tax.

Frequently asked questions

Common questions from Australian NRIs

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Read the full guide, or see your country's complete picture

Form 13 lower-TDS certificate for property sale Australia NRI tax guide — all income types & DTAA rates

Property Sale Tax sorted, by an Indian CA who works with Australian NRIs

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