Updated 21 October 2026. We read the Income Tax Department's TDS rate table, the RBI's repatriation rules and current reporting on the new forms. This guide goes further than the pages that rank today: it uses the 2025 Act's section numbers, gives the rates, works an example in dirhams, and sets out the full sequence from POA to money back in Dubai.

What is the TDS rate when an NRI sells property in India?

The Income Tax Department's table for tax year 2026-27, under section 393(2) [Table S. No. 17], 'Payment of any other sum to a Non-resident', lists (Income Tax Department, read 21 October 2026):

  • Long-term capital gains not covered by a specific line, item (f): 12.5%.
  • Any other income, item (l): 30%. Reading the table, short-term gains on a flat fall here; the 20% short-term line, item (e), applies only to gains under section 196.
  • Every rate is increased by the applicable surcharge and Health and Education cess (same page).
  • For contrast, when the seller is resident the buyer deducts 1% under section 393(1) [Table S. No. 3(i)] (same page). Taxscan reports that the 1% rule and its ₹50 lakh threshold do not apply to NRI sellers.

Is TDS deducted on the full sale price or only the gain?

Outlook Money reports that TDS may be calculated on the sale consideration rather than the actual gain, unless the seller obtains a lower or nil deduction certificate (Outlook Money, 10 October 2026). That is why the certificate matters. A worked example, before surcharge and cess (our calculation):

  • Bought for ₹80 lakh, sold for ₹1.60 crore, held long term. Gain: ₹80 lakh.
  • TDS at 12.5% on the gain: ₹10 lakh, about AED 38,700 at ₹25.85 per dirham.
  • TDS at 12.5% on the full price: ₹20 lakh, about AED 77,400.
  • The difference, about AED 38,700, would otherwise wait for your refund after you file an Indian return.

How can an NRI reduce TDS on a property sale?

Apply for a lower or nil deduction certificate before the sale. Under the 2025 Act this is section 395, and the application is Form 128 (earlier Form 13), filed online on TRACES at tdscpc.gov.in; NRIs can file it, and you will need PAN, a computation of estimated income and tax, past returns, and the buyer's details (ClearTax, citing the Income Tax Department's Form 128 FAQ, read 21 October 2026). ClearTax adds that for property sales the certificate must be in place before TDS is deducted, so apply before the deal is final.

Does the buyer need a TAN after 1 October 2026?

Reportedly not, if the buyer is a resident individual or HUF. Taxscan reports that CBDT Notification No. 121/2026, dated 22 September 2026, lets such buyers use their PAN from 1 October 2026, through a new Schedule E in Form 141, a challan-cum-statement due within 30 days from the end of the month of deduction; the TDS certificate is issued in Form 132 (Taxscan, 1 October 2026). Companies, firms and other buyers still need a TAN, and the change does not reduce the TDS rate (Taxscan).

Outlook Money reported that sales completed before 1 October 2026 needed a buyer with a TAN, so the date of completion matters (Outlook Money).

Can I sell without travelling from Dubai?

Yes, through a power of attorney signed before an Indian Consular Officer. In the UAE that now happens at Al Hind centres: AED 80 for a property POA, or AED 155 if the officer drafts it, plus a AED 19 service charge (Embassy of India, Abu Dhabi). The step list is at Power of Attorney from Dubai for Property in India (2026).

The Gulf seller's sequence

  • 1. Gather the purchase deed, payment proofs, improvement bills and the loan statement. If a loan is running, ask the bank for the closure amount and the release letter process.
  • 2. Work out the gain and apply for Form 128 on TRACES with the buyer's details.
  • 3. Sign a POA at an Al Hind centre (UAE) or your Embassy (other Gulf countries) if you will not travel.
  • 4. The buyer deducts TDS, with PAN if eligible, and gives you the Form 132 certificate.
  • 5. Receive the money in your NRO account.
  • 6. File Form 145, and Form 146 from a CA where needed, and remit (BDO India, 24 April 2026).
  • 7. File your Indian return to claim any excess TDS back.

How much of the sale money can I send back to the UAE?

If you bought with money sent from abroad or from NRE/FCNR(B), including EMIs paid that way, the sale proceeds can be repatriated for up to two residential properties (RBI property direction, para 8.2). Otherwise, up to USD 1 million per financial year can go out from NRO balances and sale proceeds through one bank (RBI Remittance of Assets direction, updated 29 June 2026). The UAE does not tax individuals' income, so for most UAE residents Indian tax is the final cost (u.ae, the UAE government portal).

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