Next dueTDS / TCS
31 OCTForm 24Q / 26Q · TDS return · Jul–Sep 2026in 8 days 7 NOVTDS / TCS deposit · Deducted in Oct 2026in 15 days 21 NOVITR filing · Audit cases · AY 2026-27 · extended from 31 Octin 29 days 15 DECAdvance Tax · 3rd (75%) instalment · FY 2026-27in 53 days 31 DECBelated / revised ITR · AY 2026-27in 69 days 15 JANForm 27EQ · TCS return · Oct–Dec 2026in 84 days 30 OCTAOC-4 · Financial statements · FY 2025-26in 7 days 11 NOVGSTR-1 · Outward supplies · Oct 2026in 19 days
All due dates
FEMA

TDS on NRI Property Sale and How to Reduce It

When an NRI sells property in India, the buyer must deduct TDS at higher rates. Here is how it works and how to reduce it.

Written byEditor, TaxClue
Published
Updated
Reading time
4 min
Questions
4 answered
  • High Complexity
Topic
FEMA
Published
August 20, 2026
Last updated
Aug 20, 2026
Reading time
4 min
0:00
Last updated: August 2026Verified against: Government sources

How to Reduce It explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

When an NRI sells property in India, the buyer must deduct TDS at higher rates. Here is how it works and how to reduce it.

TDS rates

  • Long-term (held over 24 months): 20% with indexation (plus surcharge/cess)
  • Short-term: at slab rates
  • Deducted on the sale consideration unless a lower certificate is obtained

How to reduce it

  • Apply for a lower/nil TDS certificate (Form 13) from the department
  • This limits TDS to the actual capital gain, not the full sale value
  • Claim any excess TDS as a refund by filing the ITR

Note

The buyer needs a TAN and must deposit the TDS and file Form 27Q.

Frequently Asked Questions

What is the TDS rate on NRI property sale?

20% with indexation for long-term gains (plus surcharge/cess); slab rates for short-term.

How can an NRI reduce TDS on property sale?

By obtaining a lower/nil TDS certificate (Form 13).

Can excess TDS be refunded?

Yes — by filing the ITR and claiming the refund.

Does the buyer need a TAN?

Yes — to deduct and deposit the TDS and file Form 27Q.

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Quick recapKey facts & short answers

Key Facts About How to Reduce It

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes the entire process end to end for you.

What is the TDS rate on NRI property sale?

20% with indexation for long-term gains (plus surcharge/cess); slab rates for short-term.

How can an NRI reduce TDS on property sale?

By obtaining a lower/nil TDS certificate (Form 13).

Keep the acknowledgement. A filing you cannot prove is a filing you may have to defend.

— TaxClue Compliance Desk

How to Reduce It: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

Related Services & Guides

Why This Matters

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in fema are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.

A clear understanding of the applicable law helps you make confident, well-informed business decisions. TaxClue's experts regularly assist businesses across India with end-to-end fema support at transparent, affordable pricing. Timely compliance also improves your credibility with banks, investors and government authorities. Reviewing your obligations with a professional at least once a year keeps your business audit-ready and stress-free.

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in fema are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time.

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Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

People also ask

Questions, answered

Short, direct answers to the 4 questions readers ask most on this topic.

20% with indexation for long-term gains (plus surcharge/cess); slab rates for short-term.

By obtaining a lower/nil TDS certificate (Form 13).

Yes — by filing the ITR and claiming the refund.

Yes — to deduct and deposit the TDS and file Form 27Q.

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