Income Tax Act Section 195 & 54EC Compliant
Selling Property in India as NRI — TDS & Form 13 Guide
Authoritative guide on Section 195 TDS rates, Form 13 lower tax deduction certificate, Section 54/54EC capital gain tax savings, and repatriating proceeds abroad.
NRI Property Capital Gains & TDS Estimator
Calculate estimated Section 195 TDS withholding tax with and without Form 13 Lower Deduction Certificate.
Total sale consideration in INR
Purchase price + improvements adjusted for CII inflation
Estimated TDS Withholding: ₹23,92,000 (23.92% Effective Rate)
Estimated Net Capital Gain: ₹40,00,000
Standard Section 195 TDS deducted on total sale price by buyer. File ITR-2 to claim refund of excess TDS.
Capital Gains Tax Exemption Options for NRIs
| Section | Investment Route | Lock-in Period & Limits |
|---|---|---|
| Section 54 | Reinvest gains into purchasing another residential house in India | Purchase within 2 years (or construct within 3 years). Max cap ₹10 Crores. |
| Section 54EC | Invest in specified Capital Gains Bonds (NHAI, REC, PFC, IRFC) | 5-Year mandatory lock-in. Maximum investment cap of ₹50 Lakhs per financial year. |
| Section 54F | Reinvest sale proceeds of non-residential asset (land/commercial) into residential house | Must not own more than 1 house on date of transfer. |
Step-by-Step Form 13 Lower TDS Certificate Process
- Apply online via TRACES / Income Tax e-Filing portal before executing the final sale deed.
- Upload Agreement to Sell, Indexation computation, original purchase deed, and bank statement.
- Assessing Officer (AO) verifies capital gains and issues Lower TDS Certificate specifying exact lower rate.
- Buyer deducts TDS strictly at the lower rate specified in the certificate.
Frequently Asked Questions
Unlike resident property sales where 1% TDS applies under Section 194IA, property sales by NRIs are governed by Section 195. The buyer is mandated to deduct TDS at 20% plus applicable surcharge and cess (up to 23.92%) on the TOTAL sale price, unless the NRI obtains a Lower Deduction Certificate (Form 13).
By filing Form 13 on the Income Tax portal prior to sale registration, the Income Tax Officer calculates TDS based on actual capital gains rather than the total sale value, preventing liquidity blockages and avoiding years of waiting for TDS refunds.
Under Section 54EC, NRIs can invest up to ₹50 Lakhs of long-term capital gains into specified Capital Gains Bonds (REC, PFC, NHAI, IRFC) within 6 months of sale, locking funds for 5 years to claim 100% tax exemption.