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Switzerland

Selling Indian property while you are a Swiss tax resident

Switzerland does not tax the gain on foreign property, so India's 12.5% is the only real tax on the sale.

You are selling a property in India, and you are a tax resident of Switzerland. Switzerland taxes worldwide income, so you might fear a second tax on the gain. It does not tax foreign real-estate gains, only counts them to set your rate. So India's tax is the only real charge on the sale. Here is how the two sides fit, and the Indian point NRIs need to get right.
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Last reviewed: 26 July 20266 min readReviewed by Preetesh Maloo, CA

The short answer

India taxes the whole gain on your Indian property at 12.5% without indexation, with the buyer deducting TDS under Section 195. Switzerland does not tax the gain: a gain on foreign real estate is exempt from Swiss tax and only counted to set the rate on your Swiss income. So India's 12.5% is the only real tax on the sale. As an NRI, note that you get no indexation and no grandfathering on the Indian gain, unlike a resident Indian seller, so the flat 12.5% applies whatever the age of the property.

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Related situations

The India side: the whole gain at 12.5%

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.

The point NRIs get wrong: the choice residents have, 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 pays the flat 12.5% without indexation, whatever the age of the property.

Switzerland exempts the gain

Switzerland taxes worldwide income but, as with foreign rent, makes a specific exception for foreign real estate. A gain on selling your Indian property is exempt from Swiss tax; it is only counted to set the rate on your Swiss-taxable income. Switzerland does have a real-estate gains tax, but it applies to Swiss-situated property, not foreign property.

So the sale is simple on the Swiss side: no Swiss tax on the gain, only a small rate effect. India's 12.5% is the whole cost. That is a much lighter outcome than a resident of the United States, the United Kingdom or Australia would face on the same sale, and it is worth understanding so you do not overpay in Switzerland by treating the gain as ordinarily taxable there. A practising CA computes the Indian gain, gets the lower-deduction certificate so the buyer withholds on the real gain, and gives your Swiss accountant the figure for the progression.

What's involved

What the CA actually does

  1. 1

    We compute the real Indian gain

    We work the gain from your original cost with the correct 12.5% NRI treatment, so the Indian tax is right and not overpaid.

  2. 2

    We cut the TDS to the real tax

    We get a lower-deduction certificate so the buyer withholds on your actual gain, not the gross, and reclaim any excess on your return.

  3. 3

    We confirm Switzerland stands back

    We make clear the gain is exempt in Switzerland, so you do not overpay by treating it as ordinarily taxable there.

  4. 4

    We provide the progression figure

    We give your Swiss accountant the gain figure they need for the rate calculation.

What to have ready

Documents you'll typically need

  • The original purchase deed and rupee cost
  • The sale agreement and the buyer's TDS
  • The property's value and holding period
  • Your PAN and Swiss tax details

References on this page

  • India taxes the full gain: LTCG 12.5% without indexation (from 23 July 2024), no grandfathering or forex relief for NRIs, TDS under Section 195
  • Switzerland does not tax a foreign real-estate gain; it is exempt and only counted to set the Swiss rate
  • So India's 12.5% is the only real tax on the sale
  • The 20%-with-indexation grandfathering is for resident Indians only; an NRI is locked into 12.5% without indexation

Frequently asked questions

Common questions

No. A gain on foreign real estate is exempt from Swiss tax and only counted to set the rate on your Swiss income. Switzerland's real-estate gains tax applies to Swiss property, not Indian property. So India's 12.5% is the only real tax.

No. The choice of 20% with indexation or 12.5% without, for property bought before 23 July 2024, is for resident Indians only. An NRI is locked into the flat 12.5% without indexation.

Yes. Unlike residents of the US, UK or Australia who face a second capital-gains tax, a Swiss resident pays no Swiss tax on the Indian property gain; India's 12.5% is the whole cost.

Yes. The buyer deducts under Section 195 on the sale, which is heavy, so a lower-deduction certificate lets them withhold closer to your real tax, and any excess is reclaimed by filing an Indian return.

The exceptions that change the answer

Where the general rule stops applying to you

Every rule below has a carve-out, a cut-off date or a condition that flips the answer. These are the ones that decide real cases.

TDS rate when buying property from an NRI

Right now: 12.5% plus surcharge and cess on LTCG

Where it works differently

The gain is short-term
TDS is at the applicable slab rate, effectively 30% plus surcharge and cess for most NRI sellers.
s.195 requires deduction at 'rates in force' for the actual character of the income.
No lower-deduction certificate is obtained
TDS applies to the ENTIRE SALE CONSIDERATION, not to the gain.
s.195 operates on the sum paid unless the AO determines otherwise. This is the whole commercial case for Form 13 / Form 128.
There are joint NRI sellers
TDS is deducted separately against each seller's PAN in their ownership proportion.
Rule 37BA. Deducting entirely against one PAN strands the other's credit.
The buyer deducts 1% under s.194-IA
Wrong section. The buyer becomes an assessee-in-default under s.201 for the shortfall plus 1% per month interest and penalty under s.271C.
s.194-IA applies only where the seller is a RESIDENT.

Commonly got wrong

  • TDS on property purchase is 1% over Rs 50 lakh. That is s.194-IA, for RESIDENT sellers only. For a non-resident seller it is s.195 at the full capital-gains rate, with no threshold.1% applies only if the seller is a resident. NRI seller means s.195 at 12.5% plus surcharge and cess on the whole consideration unless a certificate is obtained.
  • The buyer files Form 26QB. 26QB (now Form 141) is for s.194-IA. An NRI-seller purchase needs a TAN and Form 27Q (now Form 144).Buying from an NRI, you need a TAN, you deduct under section 195, and you file Form 27Q (Form 144 from 1 April 2026). Form 26QB is only for resident sellers.

Long-term holding period: all other assets including immovable property

Right now: 24 months for ALL assets other than listed securities

Where it works differently

Unlisted shares transferred on or after 23 July 2024
24 months, down from 36.
Finance (No. 2) Act 2024 rationalised every non-listed asset to 24 months.
The asset was inherited
The previous owner's holding period is added.
Explanation 1(b) to s.2(42A), read with s.49(1).
The transfer is a slump sale under s.50B
The 36-month long-term line is retained, not the 24 months that applies elsewhere.
s.50B was not rationalised by the Finance (No. 2) Act 2024, so the 36-month line survives there alone.

Commonly got wrong

  • Unlisted shares are long-term after 36 months. True only for transfers up to 22 July 2024. It is 24 months from 23 July 2024.State the transfer date, then the period.
  • Debt mutual funds become long-term after 36 months. Specified mutual funds bought on or after 1 April 2023 are always short-term under s.50AA, regardless of holding period.Specified mutual funds bought on or after 1 April 2023 are always short-term under s.50AA.

Related

If this matched your situation, these go further

Indian rental income when you are a Swiss tax residentThe Swiss wealth tax and your Indian assetsSelling Indian property as an NRI: the rupee-depreciation trapForm 13 lower-TDS certificate (property sale)NRI ITR filing (we file for you)DTAA TDS recoveryCapital gains calculatorProperty sale TDS calculator

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