Selling Indian property while you are a Japanese tax resident

India taxes the full capital gain from your original cost. For long-term property sold on or after 23 July 2024, the rate is 12.5% without indexation, and as an NRI you get neither the resident option of 20% with indexation nor any currency relief for the rupee's fall, so the whole rupee gain is taxed. The buyer must deduct TDS under Section 195 on the sale, plus surcharge and cess, not the small 1% that applies to a resident seller, so a lower-deduction certificate is worth getting and any excess is reclaimed by filing an Indian return.

One point catches NRIs out: the choice residents have, to pay 20% with indexation or 12.5% without on property bought before 23 July 2024, is for resident individuals only. An NRI does not get it and is locked into the flat 12.5% without indexation, whatever the age of the property.

On the Japanese side, your resident tier governs. As a non-permanent resident, a non-Japanese national resident for five years or less, Japan taxes the gain only to the extent you remit the proceeds to Japan. So if you keep the sale proceeds in India, the gain is outside Japanese tax during that window, and India's 12.5% is the only tax. As with rent, a remittance to Japan is read as coming from foreign income first, so bringing the money in can trigger the tax.

As a permanent resident, over five years, Japan taxes the gain on its worldwide basis. Japan taxes real-property gains separately, at about 20% where the holding is long-term and a higher rate for a short holding, and gives a credit for the India tax. Because India taxes the full sale upfront through the TDS, the practical work is to align the Indian refund, once the real gain is computed, with the Japanese credit, so you are not left carrying more tax than the two systems together intend. A practising CA computes the Indian gain, gets the lower-deduction certificate, and gives your Japanese accountant the India-tax-paid detail for the credit.