NRI Selling Property in India: TDS, Capital Gains Tax & Repatriation Guide (2026)

Immovable property held more than 24 months is long-term. For transfers on or after July 23, 2024, long-term gains are taxed at a flat 12.5% without indexation — and the transitional option to compute under the older 20%-with-indexation method was limited to resident individuals and HUFs, so nonresidents generally do not get it, even for property bought long before 2024. Transfers before July 23, 2024 followed the older regime — different math entirely, reviewed with your CA. Your gain is sale price minus acquisition cost, documented improvement cost, and transfer expenses — each evaluated separately. This is confirmed in the CBDT's ITR-2 validation rules (AY 2025-26). Run your numbers in the India property capital gains calculator or the estimator above.

Two exemptions matter most, both available to NRIs, both date-stamped here as of July 18, 2026: reinvesting the gain in one residential house in India within the statutory window (the Section 54 route), and investing gains up to the statutory cap in notified capital-gains bonds within six months (the Section 54EC route, with a lock-in). Claimed correctly — ideally inside the Form 13 application — they reduce not just your final tax but the withholding itself. Both carry unforgiving conditions and deadlines: verify the current windows, caps, and section numbering under the Income-tax Act, 2025 with your CA before committing money.

If you are a US citizen, green card holder, or otherwise a US tax resident, the IRS taxes your worldwide income — the India property sale goes on your US return for the year of sale. The gain is recomputed under US rules: purchase and sale amounts translated to dollars at their own historical exchange rates, no Indian indexation in the US basis, and US long-term rates if held over a year. Currency movement alone can make the US-computed gain larger or smaller than the Indian one. If the property was ever rented, depreciation recapture may apply — US rules assume allowable depreciation whether or not you claimed it. And your state may tax the gain on its own terms, without foreign tax credits.

Double taxation is generally managed, not automatic: the US–India treaty lets India tax the gain on Indian real estate, and the US then allows a foreign tax credit for Indian tax actually paid — typically claimed via Form 1116, subject to its limitation rules. The traps are timing (withheld TDS is not yet "tax paid" — the credit ties to the final Indian liability for the right year) and rate mismatch. One reporting nuance: directly held foreign real estate is not itself an FBAR-reportable account — FBAR and Form 8938 concern foreign financial accounts and assets — but the sale proceeds landing in your NRO account absolutely count toward those account thresholds. Estimate the interaction with the DTAA foreign tax credit calculator, and have a cross-border CPA prepare the actual return.

The money path: sale proceeds land in your NRO account; from there, RBI's FEMA framework generally permits remitting up to USD 1 million per financial year of eligible balances and sale proceeds — see the RBI's remittance rules (Master Direction on Remittance of Assets). Treat it as a facility, not a promise: repatriation is subject to bank review, source documentation, tax compliance, and the applicable FEMA conditions — not every sale amount can automatically be wired the week after closing.

The bank's file typically includes Form 15CA (your declaration — its applicable part depends on the payment circumstances) and, where required, Form 15CB (a CA's certificate). 15CB is not automatically required for every remittance — requirements depend on taxability, amount, and the remittance rules — so let your CA and bank map the exact paperwork. Practical sequencing: finish the TDS story first (withholding at the certificate rate, or withholding plus a refund plan), then start the remittance file. Our guide to repatriating property sale proceeds from India to the USA walks the bank-side process, and the Form 15CA/15CB checklist tool assembles the document list. If the sale is part of a permanent move back, coordinate it with the Return to India Playbook — residency timing changes both countries' tax treatment. And if some of the wealth will travel as jewellery rather than wire transfers, know how much gold you can carry between the USA and India before booking flights.

Buyers search these terms too, usually in mild panic — so, briefly: buying from an NRI makes you the deductor. As of July 18, 2026 that means (1) confirming the seller's nonresident status, (2) deducting at the correct or certificate rate on each payment — advances and installments included, (3) depositing the tax on time, (4) filing the required TDS statement, and (5) issuing the seller a TDS certificate. Deducting 1% "like a normal purchase" is the classic, expensive mistake: the shortfall, interest, and penalties land on the buyer. When the seller presents a lower-deduction certificate, verify it names you and your PAN, and deduct exactly the certificate rate.

Yes — NRIs and OCI holders can generally buy residential and commercial property in India freely under FEMA; agricultural land, plantations, and farmhouses are the notable exclusions. Payment must come through Indian banking channels (NRE/NRO/FCNR funds), and the buying decision has its own tax and repatriation angles — TDS you must deduct from your seller, rental income taxation if you let it out, and how the eventual exit is taxed, which is everything above. The buying side deserves its own full treatment; until that guide ships, start with the India property planning hub for NRIs — sell-vs-hold, inheritance, and US-kids-with-India-property scenarios included.