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Singapore

Selling Indian property as a Singapore resident

Singapore takes nothing, but India taxes the gain, and the treaty does not relieve property, whatever you may have heard about shares.

You live in Singapore and you are selling a property in India, and you want to know the tax. Singapore takes nothing on the gain, so the whole question is Indian. Many Singapore-based investors remember the India-Singapore treaty as a way to avoid Indian capital gains, but that was about shares, and it ended years ago. Property was always taxed in India. Here is what you actually pay and the withholding trap to fix.
Last reviewed: 27 July 20266 min readReviewed by Preetesh Maloo, CA

The short answer

Singapore has no capital gains tax, so it takes nothing on the sale, and the whole tax is Indian. If you held the property more than two years, the gain is long-term, taxed at 12.5 per cent without indexation, and as an NRI you do not get the 20-per-cent-with-indexation option residents have. The India-Singapore treaty does not help on property: gains on property situated in India are taxable in India. This is where people get confused, because the treaty once exempted gains on Indian shares for Singapore residents, but that exemption ended for shares bought from April 2017, and it never applied to property, which was always taxed in India. The real trap is the withholding: the buyer deducts TDS under Section 195, usually on the whole sale price rather than your gain, which locks up too much cash. The fix is a lower-deduction certificate before the sale. Reinvestment reliefs under Sections 54, 54EC and 54F can reduce the gain, and the proceeds repatriate through your NRO account within the yearly limit. That Indian side is what we handle.

References on this page

  • Singapore has no capital gains tax, so it takes nothing on the sale; India taxes the gain at 12.5% for a long-term holding
  • The India-Singapore treaty does not relieve property gains: gains on property situated in India are taxable in India
  • The treaty's old share-gains exemption ended for shares bought from April 2017 and never applied to property, which was always taxed in India
  • The buyer withholds TDS under Section 195, usually on the whole price; a lower-deduction certificate (old Section 197, new Section 395) is the fix

India taxes the gain, and property was never treaty-exempt

The Singapore side is simple: Singapore has no capital gains tax, so selling your Indian property is not taxed in Singapore at all. The tax is entirely Indian. A long-term gain, on a property held more than two years, is taxed at 12.5 per cent without indexation, and as an NRI you do not get the alternative 20 per cent with indexation that resident sellers have, so your gain is the sale price minus your cost at 12.5 per cent.

There is a specific confusion worth clearing up for Singapore residents. The India-Singapore treaty was famous, for years, for exempting capital gains, and many people still assume it will shelter their Indian sale. But that exemption was about shares, not property, and even for shares it ended: gains on Indian shares bought from April 2017 became taxable in India, with older shares grandfathered. Property is different and always was, under the treaty, gains on immovable property situated in India are taxable in India, so there was never a property exemption to lose. The upshot is that the treaty gives you no relief on a property sale, and the lever is elsewhere, in the withholding.

The withholding trap, and the fix

The trap on any NRI property sale is the withholding. When a non-resident sells, the buyer deducts TDS under Section 195, not the small 1 per cent that applies when the seller is resident, and buyers routinely deduct that TDS on the entire sale price rather than on your actual gain. On a property that has not appreciated much, that means a large part of the whole price is withheld against a much smaller real tax, and you wait to reclaim the difference.

The fix is to get ahead of it with a lower-deduction certificate, applied for before the sale, under what is currently Section 197 and becomes Section 395 under the new law. That tells the buyer to withhold only on your actual gain at the right rate, freeing up the cash the crude withholding would otherwise trap. Alongside it, reinvestment reliefs under Sections 54, 54EC and 54F can reduce or defer the gain if you put the proceeds into another house or specified bonds, and the net proceeds repatriate out of your NRO account within the yearly limit. Getting the certificate, the reliefs and the repatriation right is the whole job on a Singapore-resident sale, and it is the Indian side we handle.

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What's involved

What the CA actually does

  1. 1

    We clear up the treaty question

    We confirm that the treaty does not relieve a property sale, so you plan on the real Indian position, not the old share exemption.

  2. 2

    We get the withholding certificate

    We apply for the lower-deduction certificate so the buyer withholds on your gain, not the whole price.

  3. 3

    We compute the gain and reliefs

    We work out the 12.5 per cent gain and apply reliefs under Sections 54, 54EC and 54F where they fit.

  4. 4

    We repatriate the proceeds

    We move the net proceeds out of India to you through your NRO account within the yearly limit.

What to have ready

Documents you'll typically need

  • The purchase and sale details and dates
  • Your cost and any improvement records
  • The buyer's details for the TDS
  • Your Singapore tax residency certificate and PAN

Frequently asked questions

Common questions

Selling Indian property from Singapore?

Tell us the figures and dates. A practising CA will get the lower-TDS certificate and fix the Indian tax on a free call, no obligation.

No card, no obligation. All certification and filing work is handled by ICAI-registered practising Chartered Accountants.