Selling Property in India as an NRI: What Taxes Apply?

For a 2026 sale, be careful with articles that still refer only to the old TDS forms.

The Income Tax Department says that from April 1, 2026, the Income-tax Act, 2025 applies to the relevant TDS obligations. It also introduced Form 141, which consolidates certain earlier challan-cum-TDS statements, including the reporting of TDS on transfer of immovable property.

For an NRI seller, the applicable withholding provisions are different from the ordinary resident-seller situation, so I wouldn't assume the buyer should simply use the standard resident property TDS process.

Also, the tax treatment can depend on whether the property qualifies as a long-term or short-term capital asset and on the specific facts of the acquisition.

I'd get the calculation checked before signing the final sale documents, particularly if the property was inherited or gifted.

One thing that helped me was separating TDS from capital gains tax.

The buyer may deduct tax from the amount payable to an NRI, but that doesn't necessarily mean the deducted amount equals the seller's final tax liability.

The actual capital gain depends on things such as the property's acquisition cost, improvement costs and the applicable rules based on the date of acquisition and transfer.

For my sale, the CA also looked at whether I qualified for any reinvestment exemption.

Another issue is the money leaving India after the sale. The tax and remittance paperwork shouldn't be treated as exactly the same thing as calculating capital gains.

I would keep the sale agreement, original purchase deed, property tax records, improvement invoices and bank statements. Having those documents made the calculation much easier.

I sold an apartment in India while living in the UK, and the biggest surprise for me was the TDS.

Because the seller was an NRI, the buyer had to deal with withholding tax requirements applicable to payments to a non-resident. This is different from the standard property-sale TDS rules people often mention for transactions between residents.

I also had to calculate the capital gain separately. The TDS deduction isn't simply the final tax liability on the profit.

I would strongly recommend getting the sale documents, purchase documents, improvement bills and ownership records together before calculating anything.

My CA also checked whether any tax exemption could apply based on reinvestment.

The rules changed with the new Income-tax Act in 2026, so I wouldn't rely on an old article explaining Section 195 or the old TDS forms without checking the current provisions.