TDS on Properties for NRIs
Sale of immovable property in India by a Non-Resident Indian (NRI) attracts withholding tax obligations distinct from those applicable to resident sellers. Hegde Hegde and Associates LLP provides TDS advisory and NRI tax filing support for property transactions involving non-resident sellers and the buyers deducting tax on their behalf.
Partner reviewedDocumented processBengaluru office
Why TDS on NRI Property Transactions Matters
Under Section 195 of the Income Tax Act 1961, a buyer purchasing property from an NRI seller is required to deduct tax at source on the capital gains component, at rates that differ from the flat percentage applicable to resident sellers. Incorrect deduction can create liability for the buyer and delay the seller’s fund repatriation.
NRI sellers frequently overpay TDS relative to their actual tax liability, since deduction is often computed on the full sale consideration rather than the capital gain. A lower deduction certificate and timely NRI tax filing can address this gap.
Why Businesses and Individuals Need This Service
- NRIs selling residential, commercial, or land property located in India.
- Buyers purchasing property from an NRI seller, requiring correct TDS computation and TAN registration.
- NRI sellers seeking a lower or nil deduction certificate to avoid excess withholding.
- Repatriation of sale proceeds requiring Form 15CA/15CB certification.
- NRI tax filing in India to claim a refund of excess TDS deducted.
- Capital gains computation involving indexation, exemptions, or reinvestment under Sections 54, 54EC, or 54F.
Our Approach
- 01
Assessment
Reviewing the property transaction, holding period, and seller’s residential status.
- 02
Planning
Determining the applicable TDS rate and evaluating eligibility for a lower deduction certificate.
- 03
Documentation
Preparing the lower deduction certificate application and supporting capital gains computation.
- 04
Execution
Assisting the buyer with TAN registration and TDS deposit, and the seller with certificate application.
- 05
CA Review
Independent review of the capital gains and TDS computation.
- 06
Compliance Verification
Cross-checking against Income Tax Act provisions applicable to non-resident sellers.
- 07
Reporting
NRI tax return filing and refund claim where excess TDS has been deducted.
- 08
Continuous Support
Advisory on repatriation and FEMA compliance for sale proceeds.
Scope of Services
- Capital gains computation on sale of property by an NRI, including indexation benefit where applicable
- Application for a lower or nil TDS deduction certificate under Section 197
- TAN registration support for buyers purchasing from NRI sellers
- TDS deposit and Form 27Q filing support for buyers
- NRI income tax return filing and refund claim for excess TDS
- Advisory on capital gains exemptions under Sections 54, 54EC, and 54F
- Form 15CA/15CB certification support for repatriation of sale proceeds
Business Benefits
- Reduced upfront TDS outflow through a lower deduction certificate, improving cash flow at the time of sale.
- Correct TDS compliance for buyers, avoiding interest and penalty exposure.
- Faster refund of excess TDS through timely and accurate NRI tax filing.
- Documented capital gains computation supporting the tax position taken.
- Coordinated advisory covering the transaction, tax filing, and repatriation together.
Why Choose Hegde Hegde and Associates LLP
- NRI tax filing and TDS advisory reviewed by a qualified Chartered Accountant.
- Experience with lower deduction certificate applications for property transactions.
- Coordinated advisory across TDS compliance, capital gains, and repatriation requirements.
- Remote engagement process suited to NRI clients outside India.
- Practical advisory grounded in current Indian tax and FEMA regulations.
Industries We Serve
This service is structured for NRI individuals selling property in India, as well as resident buyers purchasing property from NRI sellers who require compliant TDS computation and filing support.
Technology & IT services
D2C & e-commerce
Manufacturing
Startups & funded ventures
Professional services
NRI individuals
Healthcare
Real estate
Financial institutions
NGOs & trusts
Hospitality
Education
Our Process
Each stage produces a defined deliverable, and nothing is issued to a client before the Chartered Accountant review stage is complete.
- 01
Discovery
Understanding the property transaction and the seller’s residential status.
- 02
Assessment
Reviewing the capital gains position and applicable TDS rate.
- 03
Documentation Review
Preparing supporting computations and certificate applications.
- 04
Execution
Filing the lower deduction certificate application or assisting with TDS deposit.
- 05
CA Review
Independent review of the computation before filing.
- 06
Reporting
NRI tax return filing and refund claim, where applicable.
- 07
Ongoing Support
Advisory on repatriation and future property transactions.
Frequently Asked Questions
The TDS rate applicable to NRI sellers is generally higher than that for resident sellers and depends on whether the gain is long-term or short-term. The exact rate should be confirmed based on the specific transaction and applicable surcharge and cess.
Yes. An NRI seller can apply for a lower or nil deduction certificate under Section 197, based on the actual capital gains computation, which can reduce the TDS deducted at the time of sale.
Yes. Unlike transactions with resident sellers, TDS on property purchased from an NRI is generally required to be deducted and deposited using a TAN, along with quarterly TDS return filing.
Yes. Where TDS deducted exceeds the actual tax liability, the NRI seller can claim a refund by filing an income tax return in India for the relevant financial year.
Yes. Repatriation of sale proceeds is subject to FEMA guidelines and generally requires Form 15CA/15CB certification, along with documentation confirming the source of funds and tax compliance.
Our NRI tax filing India services extend beyond the property transaction itself to cover the seller’s broader annual tax compliance where required.
Discuss Your NRI Property Transaction Requirements
Whether you are an NRI selling property in India or a buyer purchasing from an NRI seller, our team is available to discuss your specific requirement.
Content reviewed by CA Ramkumar Hegde, Partner, Hegde Hegde and Associates LLP.