AK
A.K.
Project Director, Muscat
“Oman's rate is 10%... better than UAE's 12.5%. Was paying 30% for 15 years. Fifteen years. The condonation filing alone recovered ₹4.7 lakhs with Section 244A interest. Life-changing, honestly.”
Recovered ₹4,70,000
Stage · Active situation
You inherited the flat.
The buyer wants to close in 45 days. Your cost basis is from 1987.
Purchase deed from 1987 at ₹2.5 lakh. Offer today at ₹2.4 crore. The gap is not your gain, your parent's purchase date counts as your own under Section 49(1), and pre-2001 properties step up to the 1 April 2001 fair market value under Section 55(2)(b). That step-up alone usually saves ₹15–40 lakh. As an NRI you then pay a flat 12.5% with no indexation, the Finance (No. 2) Act 2024 election back to 20% indexed is reserved for residents.
Illustrative only. A CA will verify every number before you sign.
NRIs we've guided through inherited-property sales
Grandfathering done right. Form 13 filed pre-deed. Repatriation unblocked.
Want a CA to verify the cost basis before you list?
We pull the 1 April 2001 FMV report, file Form 13, and handle Section 54 reinvestment.
Senior CA who specialises in NRI tax · we deal with the tax officer, you don't
Related situations
Selling inherited property usually triggers 2-3 parallel problems.
One NRI tax problem usually opens a door to the next. Here's the most likely next step from where you are right now.
Questions and answers
What's my cost basis for an inherited Indian property as an NRI?
Under Section 49(1), your cost basis is the original owner's purchase price and their date of purchase. For properties acquired before 1 April 2001, Section 55(2)(b) lets you step up to the fair market value on 1 April 2001. One catch on land and building: that 2001 value cannot exceed the stamp duty value as on 1 April 2001 where one is available, which is what usually trims an optimistic valuation report.
What's the LTCG rate on inherited property sold by an NRI in 2026?
12.5% flat under the Section 112 amendment by Finance (No. 2) Act 2024 for sales on or after 23 July 2024. The 20%-with-indexation election that Budget 2024 added is explicitly reserved for resident individuals and HUFs. NRIs are not eligible for that election.
How is the holding period calculated for inherited property?
Your holding period starts from the date the original owner (your parent) acquired the asset, not the date of inheritance. That means if your father bought the flat in 1985 and you sell in 2026, your holding period is 41 years, always long-term. Section 49(1) carries the cost across; the holding period comes from Explanation 1(i)(b) to Section 2(42A).
Can I claim Section 54 reinvestment relief on inherited property?
Yes. You can reinvest the capital gain under Section 54 (another residential house within 2 years purchase or 3 years construction) or Section 54EC (bonds up to ₹50 lakh within 6 months, with a 5-year lock-in). NHAI stopped issuing 54EC bonds in 2022, so the current issuers are REC, PFC and IRFC. Both sections apply to NRI sellers equally.
Do I need to file Form 13 before selling an inherited property?
Strongly recommended. Without a certificate, the buyer withholds 12.5% plus surcharge and cess on the full sale value under Section 195, close to ₹30 lakh on a ₹2 Cr sale, and it sits with the tax department until your refund 9 to 12 months later. The certificate (Form 128 under Section 395, previously Form 13 under Section 197) sets a lower rate based on your actual post-reinvestment liability.