Two tax events, and why they have to reconcile
Selling Indian property as an NRI triggers two things that have to meet in the middle. The first is the capital gain — the difference between what you sold for and your indexed cost of acquisition, on which tax is actually due. The second is the TDS the buyer deducts under Section 195 when paying you, which is the law's way of collecting tax up front before the money reaches a non-resident.
The trouble is that the buyer's TDS is usually deducted on the whole sale price, not on the much smaller gain — so it is very often far more than the real tax. The repatriation paperwork is where the two are reconciled: the CA computes the actual gain, works out the real tax, and the 15CB certifies that this tax is covered by what has been deducted and paid. If too much was deducted, the excess is recovered through your return as a refund.
| What happens | On what amount | Who acts |
|---|---|---|
| Capital-gains tax due | The gain (sale price minus indexed cost) | You / your CA |
| TDS under Section 195 | Often the full sale price | The buyer |
| Reconciled in the 15CB | The real tax vs what was deducted | Your CA |
This is why a property sale is rarely a same-day repatriation. The gain has to be computed properly first, because the certificate that releases the money depends on it.
Form 13 before the sale saves the pain after it
Because the buyer's Section 195 TDS is usually struck on the full sale price, an NRI can have a very large sum locked up — tax deducted on, say, a ₹2 crore sale when the actual gain might be a fraction of that. Getting it back means waiting for a refund after filing the return, which can take many months.
The cleaner route is a lower-TDS certificate under Form 13 (Section 197), applied for before the sale completes. The CA computes the expected gain, applies to the income tax department, and the certificate tells the buyer to deduct TDS on the real gain rather than the whole price. Less is locked up, the eventual repatriation reconciles easily, and there is little or no refund to chase.
If you are reading this after the sale, with full TDS already deducted, the money is not lost — it comes back through your return. But if the sale has not happened yet, the Form 13 step is almost always worth taking, and it is a different piece of work from the 15CA/15CB that comes at repatriation. To see roughly where your gain lands before you talk to anyone, our capital gains calculator gives you a first estimate.
A worked example: selling an inherited flat
Vikram, an NRI in the UK, sold a flat in Pune for ₹1.6 crore. He had inherited it from his father, who bought it in 2005. The buyer, following the rule for paying a non-resident, deducted TDS under Section 195 on the full ₹1.6 crore — far more than the tax actually due.
Vikram's chartered accountant computes the real position. Because the flat was inherited, the cost and the holding period carry over from his father, so the 2005 cost is indexed forward and the gain is long-term — a much smaller figure than the sale price. The actual capital-gains tax comes to a modest amount against the large TDS already deducted. The CA then issues a Form 15CB certifying the gain, the tax due and that it is covered, and Vikram files Form 15CA to move the net proceeds to the UK, within the USD 1 million route for the financial year. The excess TDS is claimed back as a refund when he files his return.
Had Vikram come to a CA before selling, a Form 13 lower-TDS certificate would have cut the deduction down to roughly the real tax — leaving little to repatriate around and no large refund to wait for.