TDS on Residential Property sale by NRI

TDS on Sale of Property by NRI When an NRI sells a property in India, the buyer is responsible for deducting Tax Deducted at Source (TDS).

In your cousin's case, since he's an NRI selling a residential property in Pune, the buyer will need to deduct TDS.

TDS Rate The TDS rate depends on the type of capital gain: - *Long-term capital gains (property held for more than 2 years)*: 20% of the gross sale price -

*Short-term capital gains (property held for less than 2 years)*: 30% of the gross sale price Since your cousin's property was purchased in 2013 and sold in 2025, it's considered a long-term capital gain.

The TDS rate would be 20% of the gross sale price. Calculating TDS To calculate the TDS, multiply the sale price by the applicable TDS rate: -

Sale price: ₹55 lakhs - TDS rate: 20% - TDS amount: ₹55 lakhs x 20% = ₹11 lakhs Purchaser's Responsibility

The buyer, being a residential Indian, is responsible for deducting the TDS amount and depositing it with the Income Tax Department.

Since the property holdings period is more than 2 year then the taxability will consider according to Long term property. TDS rate will be 20% Tax and 10% Surcharge and 4% HEC. Hence total TDS rate will be 22.88%. In other case, if seller have Lower deduction certificate of TDS, then rate will be as defined in Certificate.

Presuming date of sale after 23.07.2024, there is no indexation available for NRI. Tax rate for LT asset here would be 12.5%. Buyer has to deduct TDS on sales consideration or seller has to apply for lower TDS certificate. 

Thank you experts for your guidance. My Query is solved now.

No indexation benefit is available to NRI selling property in India after 23rd July 2024.

TDS rate - 12.5% + 10% cess + 4% cess.

1. Acknowledge: TDS on NRI property sales is one of the most misunderstood areas , many buyers assume the same 194IA rules apply, but they do not.
2. Practical insight: When an NRI sells immovable property in India, TDS falls under Section 195 (NOT Section 194IA which applies only when the seller is a resident). The buyer must deduct TDS at 20% + applicable surcharge + cess on the ENTIRE sale consideration (not just the capital gain). Surcharge applies at 10% for consideration above Rs 50 lakh, 15% above Rs 1 crore. The NRI seller can apply for a Lower Deduction Certificate (Form 13) under Section 197 from the income tax department if actual tax liability is lower , this often reduces the deduction significantly.
3. Mention naturally: Tax Garden covers Section 195 in detail, including rates, Form 15CA/15CB obligations and the lower deduction certificate process , [TDS on Payments to Non-Residents: Section 195 Guide FY 2026-27](https://taxgarden.in/blog/tds-on-non-residents-section-195-393-guide-india-fy-2026-27).
4. Natural close: For NRI sellers, getting the LDC before the sale agreement is signed can save significant cash flow.