Selling Your Mumbai Flat as an NRI: How Much TDS the Buyer Will Deduct, and How to Get It Down

When an NRI sells a flat held over 24 months, buyers deduct 12.5% plus surcharge and cess on the full price: 13% to 14.95%. Worked examples and how to reduce it.

Aerial view of residential towers in Mumbai's suburbs on a hazy morning

The most common shock for NRI sellers isn't the capital gains tax. It's the TDS. The buyer deducts tax on the entire sale price, not on your profit, so a large part of your money can be held back until you file a return.

What is the TDS rate when an NRI sells property in India?

For a property held for more than 24 months (a long-term capital asset), the buyer deducts 12.5%, plus surcharge and 4% cess, on the full sale consideration, from the first rupee (CalcGuru, Patron Accounting):

Sale value	Surcharge	Effective TDS rate
Up to Rs 50 lakh	Nil	13.00%
Rs 50 lakh to Rs 1 crore	10%	14.30%
Above Rs 1 crore	15%	14.95%

For a short-term sale (held 24 months or less), gains are taxed at slab rates, and buyers typically deduct at the maximum rate. Without a valid PAN, the deduction can be 20% or higher.

How much TDS on a Rs 1.5 crore flat?

By my calculation, at 14.95% the buyer deducts about Rs 22.43 lakh on a Rs 1.5 crore sale. If your actual long-term gain is, say, Rs 40 lakh, the tax on that gain is a fraction of what's been withheld. You get the rest back only after filing an Indian return.

How can an NRI reduce TDS on a property sale?

Apply for a lower or nil deduction certificate in Form 128 (formerly Form 13) before the sale. With it, the buyer deducts only on your estimated gain. Our post on Form 128 for NRI sellers explains how.

TDS is charged on the price, tax is charged on the profit. The Form 128 certificate is how you close that gap.

Exemptions that reduce the gain

If you reinvest in another residential house in India, Section 82 of the Income-tax Act, 2025 (the old Section 54) can exempt the long-term gain. Factor it into your Form 128 application. See Section 82 explained.

What changed for buyers in October 2026?

From 1 October 2026, resident individual and HUF buyers can deposit this TDS using their PAN through Form 141 Schedule E, without a TAN. That makes NRI sellers easier to deal with for ordinary buyers. Read the no-TAN rule.

After the sale

Collect the TDS certificate from the buyer and check it shows against your PAN.
File your Indian return to claim any refund.
Repatriate the proceeds within the rules; see repatriating sale proceeds.

What this means for you

NRI sellers: start the Form 128 application as soon as you have a likely buyer and price. Check the numbers on our NRI TDS calculator.
Buyers: deduct the right amount; mistakes are your liability, not the seller's.

Aerial view of high-rise residential towers across Mumbai's suburbs — Selling from abroad? See NRI buy and sell help.

Frequently asked questions

What is the TDS rate on property sold by an NRI?

For long-term property, 12.5% plus surcharge and 4% cess on the full sale value: 13% up to Rs 50 lakh, 14.30% up to Rs 1 crore and 14.95% above.

Is TDS on NRI property sale charged on the gain or the full price?

On the full sale price, unless the seller has a lower deduction certificate.

How can an NRI seller reduce TDS?

By getting a lower or nil deduction certificate in Form 128 before the sale.

Related reading

Planning to sell? Book a video call or WhatsApp me.

Warmly,
Yanik

General information, not tax advice. Surcharge depends on your circumstances; confirm with a chartered accountant.

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