What's the TDS rate when an NRI sells Indian property in 2026?

Section 195 requires the buyer to deduct 12.5% TDS on the full sale value for land and building sold on or after 23 July 2024, not on the capital gain. Surcharge and cess apply on top. The only way to lower this before sale is a Section 197 Form 13 certificate.

Can I skip Form 13 and just claim the refund later?

Yes but you give up ~₹25 lakh of liquid cash on a ₹2 Cr sale for 9 to 12 months until the ITR refund lands. Form 13 filed in time typically drops the TDS to 1 to 3% of the sale value, freeing up 95 to 97% of the proceeds on day one.

Can Form 13 account for Section 54 reinvestment relief?

Yes. The AO will certify a lower TDS rate that reflects your actual tax liability after projected Section 54 (new residential house), Section 54F, or Section 54EC (bonds) reinvestment. The certificate is conditional on you actually completing the reinvestment within the statutory window.

Stage · Active situation

Selling Indian property?
Form 13 before the sale, or ₹25 lakh blocked for a year.

Q: Does Section 194-IA (1% TDS) apply if I'm an NRI seller?

No. Section 194-IA applies only when the SELLER is a resident (the buyer's residential status is irrelevant). NRI sellers fall under Section 195, which imposes 12.5% on the full sale value. Buyers who wrongly use Section 194-IA with an NRI seller create a compliance problem that surfaces months later.

At the registrar, Section 195 makes the buyer deduct 12.5% TDS on the full sale value, not the gain after Section 54 reinvestment. On a ₹2 Cr flat that's ₹25 lakh blocked for 9 to 12 months until the ITR refund clears. Section 197 with Form 13, filed 3 to 5 weeks before registration, cuts that TDS to 1 to 3% of the sale value.

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Post 23 July 2024 · what changed for NRI sellers

Finance (No. 2) Act 2024 rewrote Section 112 to a flat 12.5% LTCG with no indexation on land and building. The election back to 20% with indexation is reserved for residents. NRIs don't get it. Grandfathering still works for pre-2001 assets and inherited property under Section 49(1).

Inherited? Run the grandfathering calculator first →

Quick answers

What is the TDS rate when an NRI sells Indian property?

Section 195 requires the buyer to deduct 12.5% TDS on the full sale value for land and building sold on or after 23 July 2024, not on the capital gain, with surcharge and cess on top. The only way to lower it before the sale is a Section 197 Form 13 certificate.

When should I file Form 13 before selling my Indian property?

Ideally 6 to 10 weeks before the sale-deed registration date. Form 13 needs the buyer's PAN, the draft sale agreement, your cost-basis documents, and a reinvestment plan if you are claiming Section 54 or 54EC relief. The assessing officer typically issues the certificate in 3 to 5 weeks.

Does Section 194-IA (1% TDS) apply if I am an NRI seller?

No. Section 194-IA applies only when the seller is a resident; the buyer's residential status is irrelevant. NRI sellers fall under Section 195, which imposes 12.5% on the full sale value. A buyer who wrongly uses Section 194-IA with an NRI seller creates a compliance problem that surfaces months later.

The transaction

Sale value, purchase year, and how you came to own it.

Expected sale value

Enter in lakhs. ₹2 Cr = 200, ₹50L = 50.

₹ lakhs

Year of purchase

Decade first, then the year. Affects grandfathering and indexation.

How did you acquire the property?

Computed in your browser. Numbers stay on your device.

NRIs who saved lakhs on an Indian property sale

Real recovery numbers. Remote filings from 31 countries.

P.S.

Product Manager, Seattle

“My CA in the US... never once mentioned DTAA. Four years. TrustNRI recovered 3 years of excess TDS and set up prevention going forward. That 26AS upload feature? Instant clarity. Wish I had found this sooner.”

Recovered $1,800+

D.V.

Engineer, Walldorf

“Uploaded my 26AS, saw the savings breakdown in like... 2 minutes? The Germany-specific guidance was spot-on, including the Finanzamt TRC process which nobody else understands. Recovered €2,200.”

Recovered €2,200

D.F.

Business Owner, Nairobi

“My Indian CA had been filing at default rates for 20 years. No treaty claim, no Form 10F. The Kenya DTAA caps interest at 10%, and with five years of condonation plus Section 244A interest, TrustNRI recovered more than I'd expected. The property sale Form 13 the next year was the real cherry.”

Recovered ₹4,20,000

Want a CA to file Form 13 before the sale-deed date?

3–5 weeks lead time. We file with the assessing officer and your buyer's lawyer.

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