Why is TDS deducted on the full sale value and not on my profit?

Because section 195 applies to payments made to a non resident, and it works on the consideration rather than on the gain. The buyer has no way of knowing your cost, so the law makes them withhold on the whole amount unless the tax office tells them otherwise.

How do I stop the excess deduction?

Apply under section 197 in Form 13 for a lower deduction certificate, before the sale completes. It computes the deduction on your real gain. A valuation report from a government approved valuer is what supports the figures.

What if the property was bought before April 2001?

Then your cost is the value as on 1 April 2001, not the old purchase price, and that value has to be established with evidence. For most older NRI held properties this is the single largest lever on the tax. Here is how it is done.

Can I use the 20 percent with indexation route?

No. That option was kept open only for resident individuals and HUFs on property acquired before 23 July 2024. An NRI computes long term gains at 12.5 percent without indexation.

Does my buyer need anything special?

Yes, a TAN. NRI sales are reported in Form 27Q, not in the 26QB challan used for resident sellers. If your buyer uses the wrong form your tax credit does not appear and your refund is delayed.

NRI TDS on Property Sale Calculator

When an NRI sells property in India the buyer deducts tax on the entire sale value, not on the profit. This shows you the gap between what gets deducted and what you actually owe.

Sale value in rupeesWhat it cost you, or the 1 April 2001 valueHow long have you held it?Selling costs such as brokerage (optional)If held 2 years or less, your Indian slab rate

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The rule that catches every NRI seller

When a resident sells property in India, the buyer deducts 1 percent of the price and everybody moves on.

When an NRI sells, a completely different section applies. Under section 195 the buyer must deduct tax on the entire sale consideration, not on the profit, and at the full long term capital gains rate with surcharge and cess on top.

So on a one and a half crore sale the buyer withholds something in the region of twenty two lakh rupees before you see anything at all. That happens even when your actual gain is small and your real tax bill is a fraction of the amount withheld.

Where that money goes

It goes to the Income Tax Department in your name. You are not losing it. You are lending it, interest free, for as long as it takes to file a return and receive a refund.

In practice that means the money is gone for the rest of the financial year plus the assessment cycle. Sellers who were relying on the proceeds to buy abroad, settle a loan or split an estate between siblings discover the timing problem after the deed is signed, which is far too late.

The fix, and why it needs a valuation

Section 197 lets you apply for a certificate that tells the buyer to deduct at a lower rate, computed on your actual gain rather than on the whole price. The application is made in Form 13 on the TRACES portal, before the sale is completed.

The assessing officer has to be satisfied that your stated gain is real. That means showing what the property is worth now and what it cost, and where the property was acquired before April 2001, what it was worth on 1 April 2001. A signed valuation report from a government approved valuer is the evidence that carries that.

Apply early. The certificate takes weeks, sometimes longer, and it is worthless once the money has already been deducted.

Things the buyer usually gets wrong

Your buyer needs a TAN, not just a PAN. The 26QB challan used for resident sellers does not apply to you, and using it creates a mess that takes months to unpick.

The return your buyer files is Form 27Q, quarterly. If they get the deposit or the return wrong, your credit for the deducted tax does not appear in your Form 26AS, and your refund stalls.

Many buyers have never handled an NRI purchase and will not know any of this. It is worth checking, politely and early, rather than assuming.

Repatriating what is left

Getting the money out of India is a separate step, with its own paperwork. Your bank needs Forms 15CA and 15CB, and the chartered accountant signing 15CB will want the sale documents and the tax position to line up. Up to one million dollars per financial year can move out of an NRO account once that is done.

Questions people ask us

Why is TDS deducted on the full sale value and not on my profit?: Because section 195 applies to payments made to a non resident, and it works on the consideration rather than on the gain. The buyer has no way of knowing your cost, so the law makes them withhold on the whole amount unless the tax office tells them otherwise.
How do I stop the excess deduction?: Apply under section 197 in Form 13 for a lower deduction certificate, before the sale completes. It computes the deduction on your real gain. A valuation report from a government approved valuer is what supports the figures.
What if the property was bought before April 2001?: Then your cost is the value as on 1 April 2001, not the old purchase price, and that value has to be established with evidence. For most older NRI held properties this is the single largest lever on the tax. Here is how it is done.
Can I use the 20 percent with indexation route?: No. That option was kept open only for resident individuals and HUFs on property acquired before 23 July 2024. An NRI computes long term gains at 12.5 percent without indexation.
Does my buyer need anything special?: Yes, a TAN. NRI sales are reported in Form 27Q, not in the 26QB challan used for resident sellers. If your buyer uses the wrong form your tax credit does not appear and your refund is delayed.

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Checked by Parish Rao, Chartered Engineer and Government Approved Valuer.

Page last checked on 27 August 2026.