Taxes on NRI property: TDS & capital gains
When buying, an NRI pays stamp duty and registration like any resident, and deducts 1% TDS if buying from a resident seller for over ₹50 lakh. When an NRI sells, the buyer must deduct TDS on the sale (higher rates apply to non-residents). Capital gains tax applies on the profit, with exemptions available under Sections 54 and 54EC if you reinvest.
TDS when you buy
Buying from a resident seller for more than ₹50 lakh, you deduct 1% TDS and deposit it against the seller's PAN. Buying from another NRI, higher TDS applies to the seller's gains — a CA should compute this.
Capital gains when you sell
- Short-term (held ≤ 24 months): gains taxed at your applicable slab rate
- Long-term (held > 24 months): concessional treatment applies; recent budget changes offer options between 12.5% without indexation and 20% with indexation — a CA will confirm which is better for you
- TDS is deducted by the buyer at the time of sale; you can apply for a lower/nil deduction certificate to avoid over-withholding
Saving tax with exemptions
Property Point's NRI desk coordinates this end to end and connects you with vetted chartered accountants and lenders — book a call and we'll handle the paperwork across time zones.
- Section 54 — reinvest long-term gains from a residential property into another residential property
- Section 54EC — invest gains in specified bonds (e.g. NHAI/REC) within the time limit
- DTAA — the Double Taxation Avoidance Agreement between India and your country of residence prevents being taxed twice
Frequently asked
This guide is general information, not legal or tax advice. FEMA and tax rules change with each Union Budget — please confirm specifics with a qualified chartered accountant. Property Point's NRI desk connects you with vetted professionals.
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