NRI Property Sale Calculator (LTCG + TDS)

Illustrative example, using the calculator’s defaults. You live in the US on an H-1B and sell a flat in India for ₹1.5 crore on 15 November 2026. You bought it in June 2012 for ₹40 lakh, pay ₹1.5 lakh in brokerage and have no other Indian income. The calculator shows:

• Long-term capital gain: ₹1.08 Cr
• Tax on the gain: ₹16.22 L (12.5% + 15% surcharge + 4% cess)
• TDS the buyer deducts: ₹22.43 L, worked on the full sale value
• Refund when you file your ITR: ₹6.2 L; net in hand ₹1.32 Cr

Two things follow. Without a Section 395 lower-deduction certificate, about ₹6.2 lakh of your money sits with the tax department until the refund arrives. And if you put ₹50 lakh into Section 85 bonds, the taxable gain falls to ₹58.5 lakh, the surcharge drops to 10% and the tax falls to ₹8.37 lakh.

When an NRI sells Indian immovable property held for more than 24 months, the gain is long-term capital gain (LTCG). From tax year 2026-27 the rules sit in the Income-tax Act, 2025 (the LTCG rate is in Section 197, which replaced old Section 112):

• NRI sellers: flat 12.5% LTCG without indexation, whatever the purchase date.
• Why no indexation? The Finance (No. 2) Act, 2024 let only resident individuals and HUFs who bought before 23 July 2024 choose 20% with indexation instead. NRIs were not given that choice.
• Held 24 months or less: the gain is short-term and taxed at your slab rate.
• Surcharge and 4% health & education cess apply on top. Surcharge depends on your total income (the gain plus other Indian income): 10% above ₹50 lakh and 15% above ₹1 crore, capped at 15% for LTCG.

When the seller is an NRI, the buyer must deduct TDS under Section 393(2) of the Income-tax Act, 2025 (old Section 195). The law taxes the sum chargeable to tax, but in practice buyers deduct on the full sale value unless the seller has a certificate:

• Base rate: 12.5% (long-term); for short-term gains buyers commonly deduct 30%.
• Surcharge: buyers usually apply 10% for sale value between ₹50 lakh and ₹1 crore, and 15% above ₹1 crore.
• Health & education cess: 4% on tax + surcharge.

This often results in TDS far higher than the actual tax due. The remedy is a lower-deduction certificate under Section 395 (Form 128, formerly Form 13). Apply before the sale, and the tax officer can authorise TDS on the actual gain instead of the full sale value. Without it, the excess sits with the government until you file your ITR and get a refund.

Section 82 (old Section 54, residential house): Invest the capital gain in one residential house in India, bought within 2 years or built within 3 years. The invested portion is exempt, up to ₹10 crore. If the gain is ₹2 crore or less, you can choose, once, to invest in two houses.

Section 85 (old Section 54EC, bonds): Invest the gain in specified bonds (NHAI, REC, PFC or IRFC) within 6 months of the sale. Capped at ₹50 lakh per financial year. The bonds are locked for 5 years and currently pay about 5.25% interest.

Section 86 (old Section 54F, any other long-term asset → residential house): Available if the gain is from an asset other than a residential house. The exemption is proportionate to the share of the sale proceeds you reinvest.

Section 82 and Section 86 cannot both be claimed on the same gain. Section 85 can be combined with either.

Sale proceeds are usually credited to your NRO account. NRIs can remit up to USD 1 million per financial year from NRO balances, including property sale proceeds, under a separate FEMA facility. This is not the Liberalised Remittance Scheme, which is for residents. The bank will ask for Form 145 (formerly 15CA) and, where needed, a chartered accountant's Form 146 (formerly 15CB).