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Oman NRIs · Property Sale Tax

Property sale tax for NRIs in Oman

When an NRI in Oman sells Indian property, the buyer withholds tax on the whole sale value. A lower-deduction certificate brings that down to tax on the actual gain.

When you sell Indian property as an NRI living in Oman, the tax on the gain is governed by India. Under the India-Oman treaty, immovable property is taxable in the country where it sits, 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 lower-deduction certificate, which drops the deduction to a figure based on your real gain.
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India-Oman key facts: property sale tax

Default non-resident TDS rate12.5%
What the treaty changes hereIt sets no lower rate on this income. What a treaty decides here is which country gets to tax it.
Treaty article / basisSource country
Your TRC issuing authoritythe Oman Tax Authority

Rates reflect India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026) and the India-Oman 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 393(2) (Section 195 until 31 March 2026) 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. Indexation is gone for NRIs on transfers from 23 July 2024, and the grandfathered 20%-with-indexation option that survived Budget 2024 was written for resident individuals and HUFs only, so your cost is the actual cost, lifted to the 1 April 2001 fair market value (Section 55(2)(b)) if you held the property before that date. The over-deduction then sits with the government until you file, which can be a year or more of blocked cash.

The certificate is how you avoid the block instead of chasing 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. You apply on Form 128 under Section 395, which replaced Form 13 under Section 197 on 1 April 2026, so an adviser still saying "Form 13" means the same application.

What changes because you live in Oman

Oman charges no personal income tax today, so this Indian income isn't taxed a second time and there's no foreign credit to chase. That ends on 1 January 2028, when Royal Decree 56/2025 brings in a flat 5% and Omani tax residents, expats included, are taxed on worldwide income rather than just what they earn in Oman. The trap is the OMR 42,000 threshold: it's measured on your total annual income, so Indian rent, interest, dividends and what you make selling Indian shares or property all count toward it, and a Muscat package sitting just under the line can be pushed over by the Indian side. Oman's tax year is the calendar year with the return due by 30 June after it, while India's runs April to March, so get your Indian TDS records lined up January to December before 2028, not after.

Frequently asked questions

Common questions from Oman NRIs

The buyer must deduct TDS under Section 393(2) 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-Oman treaty leaves immovable-property gains taxable in India, the rate itself doesn't drop. What you control is the withholding, which a Form 128 certificate brings down to your actual gain.

Because the default deduction is calculated on the gross sale value rather than the gain, so a large slice of your money goes to the tax department and only comes back at your next ITR. A lower-deduction certificate on Form 128, 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 the proceeds reach you on the day. For an NRI in Oman this is usually the single biggest lever on a property sale.

No. Gains on immovable property are taxable in the country where the property sits, so yours stays taxable in India at 12.5% for a long-term holding. Oman normally doesn't tax the gain, so the Indian tax is the only tax on this sale. The note below is where any exception lives. The treaty's role here is to prevent the same gain being taxed twice, not to lower the Indian rate.

Go further

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

Lower-TDS certificate for an NRI property saleOman NRI tax guide: every income type and the rates that apply

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