How much TDS does the buyer deduct when an NRI sells property?

The buyer deducts tax on the whole sale price, not just the gain. For property held over 24 months the long-term capital gains rate of 12.5% applies, plus surcharge and cess; for shorter holding it is a much higher slab-linked rate.

Can an NRI use indexation on property bought before July 2024?

No. The choice between 20% with indexation and 12.5% without applies to resident individuals and HUFs. NRIs pay 12.5% without indexation.

How can an NRI avoid excess TDS?

Apply to the tax officer for a lower or nil deduction certificate before the sale, so the buyer deducts on the actual gain. Without it, excess TDS can only be recovered through a refund after you file your return.

Which exemptions can an NRI claim?

Reinvesting long-term gains in another residential house (Section 54) or in specified bonds (Section 54EC, up to Rs 50 lakh) can reduce or remove the tax. Conditions and timelines apply, so confirm with a chartered accountant.

Selling Jaipur Property as an NRI: TDS, Capital Gains and How to Reduce the Deduction

The surprise for most NRI sellers is not the tax rate. It is that the buyer is required to hold back tax on the entire sale price, which can be several times the tax you actually owe on the gain. Knowing this before you sign the agreement saves months of waiting for a refund.

The Two Taxes in Play

Capital gains tax is what you owe on the profit. For residential or commercial property held more than 24 months, long-term gains are taxed at 12.5% plus surcharge and cess, with no indexation for NRIs. Shorter holding is short-term gain, taxed at slab rates.
TDS under Section 195 is a deduction the buyer makes when paying a non-resident. It is calculated on the full consideration, at rates set for the type of gain. The tax withheld is then adjusted against your final liability when you file your Indian return.

An Illustration

Suppose you bought a flat for Rs 60 lakh and sell it, after 24 months, for Rs 1 crore. Your gain is Rs 40 lakh, so long-term capital gains tax is about Rs 5 lakh before surcharge and cess. If the buyer deducts TDS at 12.5% on the full price, Rs 12.5 lakh is withheld, again before surcharge and cess. About Rs 7.5 lakh is excess and comes back only after you file a return and the refund is processed. The numbers are illustrative; your own gain depends on indexation-free cost, improvement costs and transfer expenses.

Planning to sell your Jaipur property from abroad?

Tell us the property and timeline. We coordinate the sale and point you to CAs who handle NRI certificates.

Request a Callback →

Reduce the Deduction: Lower or Nil Certificate

Before the sale completes, you can apply to the Assessing Officer for a certificate that lets the buyer deduct tax only on the real gain, or nothing if exemptions cover it. You will need your PAN, sale agreement details, cost and improvement proofs, and a computation of gain. Apply early, because processing takes time and the certificate must reach the buyer before payment. A CA will file this; the application form number and section references changed with the new Income-tax Act, 2025, so ask your CA for the current ones. If the buyer is also in a rush, agree in writing who bears any delay.

Exemptions That Can Lower the Bill

Section 54: long-term gain from a residential house reinvested in another residential house in India, within the prescribed time and subject to the cap.
Section 54EC: long-term gain invested in specified bonds within six months, up to Rs 50 lakh, held for the lock-in period.
Section 54F: where a non-house asset such as a plot is sold, investing the net sale proceeds in a residential house can qualify, with conditions.

Section numbers. The Income-tax Act, 2025 replaces the 1961 Act for tax years from 1 April 2026 and renumbers sections. We use the familiar 1961 numbers here. Your CA will confirm the current references and forms.

After the Sale

Collect the TDS certificate from the buyer (Form 16A) and check the PAN and amounts.
File your Indian income tax return for the year of sale, claim the TDS credit and any refund.
To move the money abroad, use Forms 15CA and 15CB through your bank. See repatriating sale proceeds.
Check whether your country of residence taxes the gain and whether a tax treaty gives you credit.

General information, not advice. Tax, FEMA/RBI and Dubai rules change often. This article is not legal, tax or financial advice. Confirm current rules with your bank, a chartered accountant and, where relevant, the Dubai Land Department before you commit money.

How We Researched This

Checked against the public pages below in October 2026. Several are secondary summaries, so confirm the current rule with the official body, your bank or a qualified adviser before acting.