Two owners means two capital-gains calculations
Use the ownership shares in the title and succession documents to divide the consideration, original cost, eligible improvements and sale expenses. Each seller reports their own gain and claims their own eligible relief.
Section 24, formerly Section 26, expressly separates co-owners' house-property income where shares are definite. The sale itself is taxed under the capital-gains provisions, Sections 67 and 72, formerly Sections 45 and 48. Section 26 is not a special capital-gains charging rule.
| Your resident share | Your sibling's NRI share |
|---|---|
| Your gain and tax return | Their gain and tax return |
| Resident-only indexed-tax protection may apply to qualifying older land/buildings | That resident protection does not apply |
| Resident-seller TDS | Non-resident-seller TDS |
Inherited property keeps the previous owner's cost and holding period. If the flat was rented before sale, use the co-owned rental-income page for that separate income stream.
The buyer splits TDS by seller, not by property
| Seller | Deduction | Reporting |
|---|---|---|
| Resident | 1% under Section 393(1), formerly 194-IA, on the relevant consideration/stamp-value share | Form 141, formerly Form 26QB; no TAN |
| NRI | Section 393(2), formerly 195; long-term base 12.5% plus surcharge and 4% cess, ordinarily on gross share without lower authority | Form 144, formerly Form 27Q, under the TAN route |
For resident-seller TDS, the Rs 50 lakh test uses the property's aggregate consideration or stamp-duty value. Do not test only one seller's smaller share. The NRI rule has no corresponding Rs 50 lakh exemption.
Through 30 September 2026 the buyer needs a TAN for the NRI share. From 1 October, a resident individual or HUF has TAN relief even for that share; companies and firms remain outside it. From that date the NRI share is paid and reported on Form 141's new Schedule E, notified on 22 September 2026, still at the non-resident rate. See the 2026 form-change page.
Put the split into the deed and payment schedule
Ask the conveyancing advocate to record each seller's ownership fraction, PAN, gross consideration, TDS and net payment, with that seller's own receiving account and transfer references. Carry the same split into any advance-payment schedule.
| Seller | Gross share | Tax held back | Net credit |
|---|---|---|---|
| Resident co-owner | Their stated entitlement | Resident-seller deduction | Their resident account |
| NRI co-owner | Their stated entitlement | NRI deduction or certified amount | Their permitted NRI account |
Give the buyer a written split before funds are released. A collection arrangement that credits only one sibling does not change who sold each share or whose PAN should receive the tax credit. For several buyers, map every buyer's payments to the correct sellers as well; use the multiple-buyer and seller checklist.
A worked example: Asha in Pune
Asha and her US-resident brother Dev inherited a Pune flat equally. It sells in September 2026 for Rs 2 crore; their parent's 2006 cost was Rs 30 lakh. Assume stamp value is no higher, no costs, improvements, losses, reinvestment relief or lower certificate, and Asha has used her basic exemption against other income.
| Calculation | Asha, resident | Dev, NRI |
|---|---|---|
| Sale share | Rs 1 crore | Rs 1 crore |
| Inherited cost share | Rs 15 lakh | Rs 15 lakh |
| Unindexed long-term gain | Rs 85 lakh | Rs 85 lakh |
| Base gain tax at 12.5% | Rs 10,62,500 | Rs 10,62,500 |
| Buyer TDS | Rs 1 lakh | Rs 14.30 lakh |
| Net bank payment | Rs 99 lakh | Rs 85.70 lakh |
Dev's TDS is Rs 1 crore x 12.5% x 1.10 x 1.04, including 10% surcharge and 4% cess. Assume no other payments from this buyer. The buyer pays Rs 1,84,70,000 to the siblings and deposits Rs 15,30,000, filing Form 141 for Asha and quarterly Form 144 under a TAN for Dev.
If each owner's total income stays above Rs 50 lakh and below Rs 1 crore, the tax on the Rs 85 lakh gain is Rs 12,15,500 including those additions, before any resident indexed-tax protection for Asha. Their identical base gains do not guarantee identical final tax. TDS is a credit, not an extra tax.
Each owner's money needs its own account trail
Your net share goes to your resident account. Your NRI sibling's goes to NRO, or NRE only where the bank confirms the credit qualifies under the account's repatriable-funds rules. Inherited sale proceeds are not automatically eligible for direct NRE credit. Any later repatriation belongs to the sibling's bank and tax process.
If the draft deed names only your account, ask the advocate and buyer to correct the account and consideration schedule before payment. If already signed or paid, preserve both sellers' instructions and the full bank trail, then arrange the appropriate documented correction with the advocate and bank. Do not relabel your sibling's sale entitlement as a gift to make the bank entries fit.
Reconcile each seller's TDS reporting to their own PAN. Moving the net money between siblings later does not repair a deduction reported against the wrong owner.