6 days ago
Selling Indian Property: NRI TDS Rates, TAN Rules and Registration
When an NRI sells property in India, the buyer must usually take tax out of the payment.
Unlike some property sales by residents, there is no minimum sale price before this tax deduction applies.
The tax amount depends on how long the property was owned.
A sale after two years is treated as a long-term gain and has a 12.5% TDS rate, before surcharge and cess.
A sale within two years uses the seller’s income-tax slab rate.
Before 1 October 2026, buyers generally need a TAN to handle this tax.
Buyers must also deposit the tax and complete the required filings.
Registration officials may ask for a TDS certificate, a challan, or both.
NRI property sellers face TDS rules different from those applying to resident Indian sellers.
There is no minimum transaction threshold for TDS when an NRI sells Indian property.
Long-term gains, from sales after two years, generally attract 12.5% TDS plus surcharge and cess.
Short-term gains, from sales within two years, are subject to the NRI seller’s applicable income-tax slab rate, plus surcharge and cess.
Until 1 October 2026, buyers generally need a TAN and proof of TDS payment; certain buyers will receive relief after that date.
- Who
- NRI property sellers and the buyers purchasing their immovable property in India.
- What
- The article explains TDS rates, TAN requirements, tax filings, and proof needed when NRIs sell Indian property.
- Where
- India, including state sub-registrar offices handling property registration.
- When
- The current TAN process applies before 1 October 2026; the change removing TAN requirements for certain purchases starts on 1 October 2026.
- Why
- To ensure the buyer deducts and deposits the required tax and can complete property registration.
Key facts
- NRI TDS threshold
- No minimum transaction amount applies when an NRI sells property.
- Long-term holding period
- A sale after two years creates a long-term capital gain.
- Long-term TDS rate
- 12.5%, plus applicable surcharge and cess.
- Short-term holding period
- A sale within two years creates a short-term capital gain.
- Short-term TDS rate
- The NRI seller’s applicable income-tax slab rate, plus surcharge and cess.
- TAN deadline
- The existing TAN requirement applies before 1 October 2026; the stated relaxation begins on that date for certain resident individuals and Hindu Undivided Families.
- Registration proof
- Sub-registrar offices may request a TDS certificate, TDS challan, or both.
Sources
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