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NRI Selling Property in INDIA

A Guide to NRI: Selling Property in INDIA

NRI Selling Property in INDIA:

If you’re a Non-Resident Indian (NRI) looking to sell property in India, you’ll need to understand the basics of real estate transactions and taxes. This guide is here to make things easier for you, focusing on Tax Deducted at Source (TDS) and its impact on your taxes. We’ll break down TDS, understand capital gains, talk about Lower TDS Certificates, and explore exemptions and deductions under Sections 54 and 54F of the Income Tax Act. As an NRI, it’s important to know these details to make smart choices and follow Indian income tax rules.

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Understanding TDS:

When an NRI sells property, the buyer will deduct a certain amount of income tax, known as Tax Deducted at Source (TDS), from the payment. This is done at a fixed rate of 20%. If the capital gains are lower, the TDS rate matches the actual gains rate, which affects your overall tax liability. The buyer is responsible for ensuring TDS compliance.

Capital Gains: What’s Important

Capital gains are a key factor in tax implications. These are calculated by subtracting the cost of buying the property from the selling price. These gains determine the TDS. For NRIs, long-term gains are taxed at a fixed 20%, while short-term gains are taxed based on the total income tax slab rates in India. Understanding this calculation is important for NRI property transactions.

Lower TDS Certificate for NRIs:

The Lower TDS Certificate is a document issued by the Income Tax Department that allows NRIs to receive income at a reduced TDS rate. This certificate can help minimise TDS deductions. To get this certificate, you’ll need to make a case to the tax authorities, explaining why a lower deduction rate should be allowed. Key factors considered include the nature of the property, how long you’ve owned it, and other relevant details. Getting this certificate can significantly affect your overall tax situation.

Exemptions and Deductions: Sections 54 and 54F

  • Section 54: This section of the Income Tax Act allows NRIs to claim an exemption for long-term capital gains when selling a house property. To take advantage of this exemption, NRIs must invest the gains in a new property within specific timelines and adhere to certain geographical restrictions. Selling the new property within three years may cancel the exemption.


  • Section 54F: This section allows NRIs to claim an exemption for long-term gains, excluding residential house property. Like Section 54, this provision has conditions related to the purchase or construction timeline, geographical requirements, and ownership limits. Full exemption requires investing the entire sale receipt, highlighting the importance of strategic financial planning.

Getting Professional Help:

Given the complex nature of TDS regulations and tax exemptions, it’s advisable for NRIs to seek professional guidance from tax experts. Compliance with Indian tax laws is crucial to avoid financial setbacks and penalties. Professional advice can be invaluable in navigating this complex area and making informed decisions that align with regulatory requirements.

Wrapping Up:

Selling property in India as an NRI requires careful consideration. We at FSKINDIA.COM can help you in a very easy and convenient manner to help you sell or buy any property in India.


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FAQs on Selling Property in INDIA

Any person who have lived more than 182 days or more in a Financial Year, outside India is considered as NRI.
Need help in NRI related Income Tax Queries? Call us on +91-175-5031685 or fill out this basic information we will reach out to you.

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