Last reviewed: 25 September 2026. An NRI property sale that goes wrong rarely goes wrong at the registrar's office — it goes wrong six weeks earlier, when nobody applied for the lower-TDS certificate, or six weeks later, when the repatriation paperwork stalls at the bank. The tax law itself is covered in our Section 195 and lower-TDS deep-dive; this page is the other thing you need — the journey checklist, in the order the steps actually happen. For sales from 1 April 2026 the Income-tax Act, 2025 applies, so the section and form numbers below give the new reference first and the old one in brackets.
Phase 1 — sixty days before you sign anything
- PAN operative? An inoperative PAN (Aadhaar-linkage issues are common for NRIs) triggers higher TDS and blocks certificates. Fix first.
- Assemble the title file: purchase deed, chain documents, society NOC/share certificate, tax receipts, loan closure if any.
- Compute the real gain: cost without indexation — NRIs cannot use the 20%-with-indexation option, whatever the purchase date (only FMV as on 1-4-2001 substitution for older property), plus improvement costs with proofs and transfer expenses. This number drives everything.
- Decide on exemptions before the sale: reinvestment routes (sections 82/86 of the 2025 Act, old sections 54/54F) need timing discipline — the decision belongs here, not at ITR time.
- File Form 128 (formerly Form 13) on TRACES for the lower/nil deduction certificate under section 395(1)(a) (old s.197) — 30 to 45 days of processing is normal, so T-60 is when the clock starts. Without it, the buyer deducts on the full sale value, not your gain, and lakhs sit with the department for a year.
- Treaty check where relevant: TRC + Form 41 (formerly Form 10F) in hand if a treaty position affects the computation — see our DTAA relief guide and the Form 41 and TRC rules under section 159 (old s.90).
Worked example: what the certificate changes
An NRI sells a Thane flat for ₹1.2 crore. The purchase cost was ₹40 lakh, so the long-term gain (no indexation) is ₹80 lakh.
| Without a certificate | With a lower-deduction certificate on the gain | |
|---|---|---|
| Amount TDS is computed on | ₹1.2 crore (full sale value) | ₹80 lakh (the gain, as the certificate allows) |
| 12.5% + 4% cess (before surcharge) | about ₹15.6 lakh | about ₹10.4 lakh |
| Cash held back from the seller | about ₹5.2 lakh more, recoverable only through a refund after the ITR | closer to the real tax |
Surcharge is added on top where applicable (10% or 15% depending on the amount), and the Assessing Officer fixes the actual rate in the certificate, so treat these figures as illustrative.
Timeline at a glance
| When | What happens |
|---|---|
| T-60 days | PAN check, title file, gain computation, exemption decision, Form 128 filed |
| T-45 to T-15 | Certificate processing on TRACES; buyer obtains TAN; agreement drafted quoting the certificate |
| Sale day | Registration; buyer deducts per certificate and pays the balance into your NRO account |
| Following weeks | Buyer deposits TDS, files the TDS statement and issues your TDS certificate |
| Return season | Your ITR reports the gain and exemptions and claims the TDS credit |
| Repatriation | Form 146 by a CA, then Form 145, then bank processing |
Phase 2 — agreement and sale day
- The buyer needs a TAN. Buying from an NRI is not the 1% resident drill under section 393(1) Table S.No. 3(i) (old s.194-IA) — the buyer deducts under section 393(2) (old s.195) and files through the TDS system, which needs a TAN. Buyers discover this late; sellers should raise it early because the deal timeline is yours to protect.
- Certificate into the agreement: quote the lower-deduction certificate number and rate in the agreement; the buyer deducts exactly per certificate.
- Money path: sale proceeds via banking channels into your NRO account — cash components are a FEMA and tax problem you decline politely.
- Documents at registration: the usual registrar set plus your PAN, and the buyer's TDS arrangement documented in writing.
Phase 3 — after the registration
- Buyer's side (chase it): TDS deposit, statement filing, and your TDS certificate — your refund and credit depend on the buyer completing this correctly.
- Your ITR: report the gain, claim the certificate-backed TDS credit, apply exemptions with their proofs. Refund arises where TDS still exceeded the true tax.
- Repatriation: the bank moves funds abroad against Form 145 and (where applicable) a CA-certified Form 146 (formerly 15CA/15CB), within the applicable FEMA limits for NRO-sourced funds (the USD 1 million per financial year route for eligible remittances). Sequence: ITR position clear → Form 146 → Form 145 → bank processing.
- Keep the file: deed, certificate, TDS proofs, ITR, Form 145/146 — the complete pack answers any later notice in one attachment.
The mistakes that cost the most
- Starting Form 128 after the buyer is ready — the certificate arrives after the sale, and TDS hits the full value.
- A buyer without a TAN discovering it in the week of registration — deals slip a month.
- Selling with an inoperative PAN — everything downstream jams.
- Deciding reinvestment exemptions at ITR time, after the reinvestment windows have quietly run.
- Treating repatriation as a formality — banks reject incomplete Form 145/146 sets without sentiment.
Frequently asked questions
How much TDS applies when an NRI sells property?
The buyer deducts under section 393(2) of the Income-tax Act, 2025 (old section 195) — for long-term property (held over 24 months), at 12.5% plus surcharge and cess on the gains where a lower-deduction certificate under section 395(1)(a) (old section 197) authorises it, but on the FULL sale value where no certificate exists. NRIs pay 12.5% without indexation whatever the purchase date. The lower-TDS certificate is what keeps the deduction proportionate to the real gain.
When should I apply for the lower-TDS certificate?
File Form 128 (formerly Form 13) on TRACES 45–60 days before the expected sale — processing commonly runs 30–45 days and the certificate must exist before the buyer pays. It specifies the rate the buyer applies; quote it in the agreement to sell.
Does the buyer really need a TAN to buy my property?
Yes — purchases from NRI sellers run through section 393(2) (old section 195), which requires the buyer to obtain a TAN, deposit the TDS and file the statement. It is the buyer’s obligation, but the seller has the strongest incentive to raise it early because certificate credits and deal timelines depend on it.
How do I take the sale money abroad?
Through your bank under FEMA — NRO-sourced remittances (up to USD 1 million per financial year for eligible cases) move against Form 145 (formerly 15CA) and, where applicable, a chartered accountant’s Form 146 (formerly 15CB) certifying the taxes on the remittance. A clear ITR position makes the certification straightforward.
Can I save the capital gains tax by reinvesting?
Reinvestment-based exemptions (sections 82 and 86 of the Income-tax Act, 2025, old sections 54 and 54F) are available to NRIs for eligible reinvestments within the statutory windows — but the decision and the timeline discipline belong BEFORE the sale, not at return-filing. The exemption workings also reduce the gain the lower-TDS certificate is computed on.
What exactly does the firm handle in an NRI sale?
The full journey: gain computation and exemption planning, the Form 128 lower-deduction certificate on TRACES, buyer-side TAN and TDS guidance, ITR with certificate credits, and the Form 146 certification and Form 145 sequencing for repatriation — one desk, one consistent file, coordinated over WhatsApp and email across time zones.
We handle the whole journey — certificate, computation, buyer coordination, ITR and repatriation.
NRI Lower TDS Certificate Form 15CA/15CB Certification Talk to us CA for NRIsThis article is general information as on 25 September 2026. NRI sellers pay 12.5% without indexation on long-term gains; the indexation option for pre-23-July-2024 purchases is available only to resident individuals/HUFs. Surcharge varies with income. Facts decide everything in property matters — take advice on your case.