Cutting Excess TDS on Your NRI Property Sale
Why buyers hold back so much of an NRI seller's money, and the one thing that reduces it.
The rule
When the seller is not resident in India, the buyer is legally required to deduct tax before paying. The buyer is personally liable if they get it wrong, so buyers deduct the maximum and their accountants advise exactly that.
Why the amount feels absurd
Because it is calculated on the entire sale price, not on your profit.
Sell for one crore with a real gain of twenty lakh, and tax is deducted as though the whole crore were income. The deduction can easily exceed your total actual liability, sometimes by several times.
Two ways out
Refund afterwards. File a return, show the real gain, claim the excess back. It works but takes months, and meanwhile your money sits with the department.
Lower deduction certificate, applied for in advance. Much better. You apply before the sale, demonstrate what the actual gain will be, and the department issues a certificate directing the buyer to deduct less.
Why the valuation is the heart of it
To show the real gain you have to show the real cost. For property bought before April 2001, that means an evidenced 1 April 2001 value from a registered valuer.
Without that, you have no way to demonstrate a lower gain, and the application has nothing to stand on.
The order to do things in
- Valuation firstBefore the sale agreement if you can manage it.
- Accountant computes the expected gainSale price, less indexed cost, less expenses.
- File the applicationWith the valuation as supporting evidence.
- Certificate issued, buyer deducts lessYour money stays with you.
Start early. Really.
The most common call we get from abroad is after completion, asking whether the deduction can be reversed. It cannot. It becomes a refund claim. Begin when you decide to sell.
Questions people ask us
- Can the buyer just agree to deduct less?
No. Without the certificate he is personally liable, so he will not risk it, and you cannot really expect him to.
- What if I have already sold?
Then you claim a refund by filing a return. You still need a proper valuation to establish your cost, so the report is worth getting either way.
- Does this apply if I am an OCI cardholder?
What matters is your residential status for tax purposes, not the card you hold. Ask your accountant to confirm your status before the sale.
Checked by Parish Rao, Chartered Engineer and Government Approved Valuer.
Page last checked on 23 August 2026.