11 Things to Nail Before You Sign the Sale Deed

The single most expensive omission in any NRI property sale. Section 195 forces the buyer to deduct 12.5% LTCG (effectively 13-14.95% with surcharge + 4% cess) on the full (effective 13-14.95% with surcharge + cess) sale value the day the deed registers. On a ₹2 crore flat that's up to ₹25 lakh held by the tax department for 6-12 months.

Form 13 under Section 395, formerly Section 197 is the Income Tax Department's mechanism to cut that pre-deduction to your actual capital-gains tax. The AO reviews your cost basis, the gain, the applicable DTAA rate, and issues a certificate the buyer uses instead of the default rate.

Lead time: 3-5 weeks end-to-end. Backwards-plan from your expected sale deed date. If the broker says "buyer's ready to sign next Friday," you're already two weeks too late, file Form 13 the same week you decide to sell, not the week a buyer appears.

DTAA relief (Article 11 on interest, Article 13 on capital gains) requires a Tax Residency Certificate from your country's tax authority. Without it, Form 13 defaults to the domestic 12.5% basic (13.0-14.95% effective) even where the treaty allows lower.

Real timelines by country:

Apply before you list the property. By the time the buyer is ready, your TRC needs to be in your hand along with Form 10F uploaded on incometax.gov.in.

If a cousin or old friend holds a GPA from when you moved abroad, cancel it before your property gets close to a buyer. Supreme Court in Suraj Lamp & Industries v. State of Haryana (2012) held that GPA-based sales don't convey valid title, every good buyer's lawyer knows this and will flag it at due diligence.

Issue a Special Power of Attorney instead. Specific person, specific property, specific acts, specific time window. Get it notarised at the Indian Embassy or consulate, apostilled where required, and registered at the sub-registrar before it's used.

GPA fraud is real. NRIs have lost flats worth crores to trusted friends who transferred the property to their own name during the NRI's absence.

Indexation for property sales on or after 23 July 2024 is dead. The old rule let you bump up your cost base for inflation. A ₹10 lakh Bangalore flat bought in 2005 had an indexed cost of roughly ₹36 lakh. Gone.

New rule: flat 12.5% LTCG on the raw gain. For pre-April-2001 properties, the Fair Market Value as of 1 April 2001 can be used as the cost, partial relief. For flats held 15-20 years the new regime often means MORE tax despite the lower headline rate.

Price the deal with this math in mind. If your flat was bought for ₹30 lakh in 2008 and is now worth ₹2 crore, your gain is ₹1.7 crore and your tax at 12.5% is ₹21.25 lakh before surcharge and cess. That's what needs to be built into your reserve price.

Capital-gains tax on a residential house sale can be deferred or eliminated:

These aren't last-minute tactics. Section 54's 2-year window starts from sale date, and the Capital Gains Account Scheme (CGAS) deposit must be made before the next ITR due date if the new property isn't bought yet.

RNOR return plans interact here too, if you're moving back to India in 18 months, a Section 54 house purchase before the move is usually better than a Section 54EC bond.

When an NRI sells, the buyer is the statutory tax collector. They must:

1. Obtain a TAN (Tax Deduction Account Number) if they don't have one.

2. Deduct 12.5% TDS basic at each payment tranche (effective 13-14.95% with 15% surcharge cap + 4% cess).

3. Deposit via Challan ITNS-281 within 7 days of the month-end (then file the quarterly TDS statement Form 27Q by Q1 31 Jul / Q2 31 Oct / Q3 31 Jan / Q4 31 May) (30 April for March deductions). Not Form 26QB, 26QB is for resident-to-resident sales at 1%.

4. Issue Form 16A to you within 15 days of each deposit.

Most resident Indian buyers have done none of this. Their lawyer is often confused too. Deals collapse at the closing table because buyers panic at the paperwork or, worse, try to "adjust" the declared price to reduce TDS.

Brief your buyer's lawyer 2 weeks before the sale deed. If needed, get a CA to sit with them. A 20-minute call costs you nothing and saves the deal.

Sale proceeds must land in an NRO account. If your old resident savings account in India hasn't been redesignated as NRO since you became non-resident, it's a FEMA Regulation 5(4) breach, penalty up to ₹2 lakh plus retroactive 30% TDS on past interest.

Fix the status before the buyer is ready to pay. Banks take 7-15 working days to redesignate and re-KYC. If you're opening a fresh NRO, budget 2-4 weeks including video-KYC timezone coordination.

Bonus: once proceeds land in NRO, 15CA / 15CB unlock movement to NRE or abroad. Pre-planning this saves a month of post-sale scramble.

The AO reviewing your Form 13 wants to see your Indian income history. So does the buyer's lawyer during diligence. Pull 5 Assessment Years of Form 26AS and the AIS (Annual Information Statement) from the incometax.gov.in portal before you file Form 13.

Look for:

Fixing everything here before Form 13 submission means a clean AO review instead of a notice three months later.

PAN, Aadhaar linking, bank re-KYC, depository KYC, mutual-fund KYC, every one of these can silently block parts of the sale. The most common failure path:

Fix in this order:

1. PAN, Aadhaar linking (if eligible. NRIs have a slightly different rule; check the CBDT circular).

2. Bank NRO re-KYC with current passport + overseas address proof.

3. MF folio KYC update via CAMS / KFin for any Indian mutual funds you still hold.

4. IT portal residential status field updated for the current year.

Standard buyer drafts almost always miss the NRI-specific clauses that protect both parties. Insist on:

A good CA + property lawyer review of the draft costs 1% of the deal and prevents a ₹5-20 lakh post-sale argument.

Sale proceeds can repatriate outside India up to USD 1 million per financial year under the FEMA Master Direction on Remittance of Assets. Above that, the money stays in NRO until the next FY.

If your sale is ₹2 crore (roughly USD 240,000) the whole amount repatriates in one year. If your sale is ₹10 crore, it takes 4-5 financial years to move out in full, unless you structure as multiple transactions.

Forms 15CA + 15CB are required where Rule 37BB mandates it, primarily taxable remittances above ₹5 lakh per remittance. The threshold is ₹5 lakh, not USD 5,000. No bank processes an outward wire without both. A good CA files them same-day; a bad one takes a week and your money sits in NRO earning 4-5%.

Decide the repatriation schedule, and the CA who'll file the forms, before the sale deed registers. Not after.