NRI selling property? The TDS shock explained

By Parish Rao · 25 August 2026 · 6 minute read

This is the single biggest surprise for NRI sellers. You sell a flat for one crore, expect tax on your actual profit, and instead a large slice of the entire sale price is deducted before you see a rupee.

Why the number feels so wrong

When a resident sells property, the buyer deducts a small percentage of the sale price and the seller settles the real tax later. When an NRI sells, the buyer must deduct tax at a much higher rate, and crucially it is calculated on the entire sale value, not on your gain.

So a seller whose actual taxable profit might be fifteen lakh can find tax deducted as though the whole crore were income. The money is not lost. It is sitting with the government until you claim it back through your return, which can take many months.

The certificate that solves it

There is a proper legal route. You can apply to the Income Tax Department for a lower or nil deduction certificate before the sale. If granted, the buyer deducts only on your actual computed gain rather than the full price.

The difference in cash flow is enormous. For most NRI sellers this application is the single most valuable thing they do in the whole transaction.

Where the valuation fits

The application asks you to show your computed capital gain, which means proving your cost of acquisition. If the property was acquired before April 2001, that cost is its market value on 1 April 2001, established by a valuation report.

A weak cost figure means a weak application, which means a smaller reduction, which means more of your money parked with the department. This is exactly where a properly evidenced valuation pays for itself many times over. Our post on proving cost without a purchase deed covers the case where old papers are missing, which is very common in NRI families.

The sequence that works

1. Get the valuation done earlyBefore you apply for anything. It is the input to everything else.
2. Apply for the lower deduction certificateYour CA files this. Allow real time, because it is not instant.
3. Give the certificate to your buyerThey deduct at the approved rate. Without it in hand, they must deduct at the full rate and cannot fix it afterwards.
4. Complete the saleWith the deduction matching your real liability.
5. Handle repatriationMoving money abroad has its own paperwork and annual limits, again through your CA.

The mistake that costs the most

Starting the application after agreeing the sale date. Buyers are usually in a hurry, and once the transaction completes at the full deduction rate, your only route is a refund claim that can take a long time.

If you are even considering selling, get the valuation done now. It stays valid for the application and costs a fraction of the cash you would otherwise have locked up.

Doing it from abroad

Almost all of it works remotely. One person in India gives our engineer access to the property, and everything else moves by email. We do this constantly for families in the US, Canada, the Gulf and Singapore. See our NRI section, including the page on TDS for property sales.

Rates, thresholds and forms change, so your CA confirms the current position. What we provide is the valuation the whole application rests on. Read how we prepare it.