NRIs don't get the resident indexation choice - flat 12.5% LTCG applies regardless

NRI Selling Property in India

Most NRIs assume the same capital gains rules apply to them as to resident sellers back home. They don't. Between Section 195 TDS withheld on the full sale price, the loss of the indexation choice, and the US or Canada side of the filing, a property sale that should net six figures can quietly lose a third of itself to withholding and double taxation if it isn't planned before the deed is signed.

Plan My Property Sale What We Handle
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Quick answer

What is the capital gains tax rate for an NRI selling property in India?

For property held more than 24 months and sold on or after July 23, 2024, long-term capital gains are taxed at a flat 12.5% with no indexation benefit. This applies regardless of when the property was originally purchased. Crucially, NRIs do not get the choice resident Indians have: the Finance Act 2024 grandfathering option to use the old 20% rate with indexation only applies to resident individuals and Hindu Undivided Families, not to non-residents. If the property was held 24 months or less, the gain is short-term and taxed at the NRI's applicable slab rate instead of the flat LTCG rate.

Four Things to Get Right Before You Sign

LTCG and TDS calculation

12.5% flat LTCG with no indexation for sales on or after July 23, 2024, plus applicable surcharge and a 4% cess. We calculate the actual liability so the buyer doesn't over-withhold against your gross sale price.

Lower-deduction certificate

Without a certificate from the Income Tax Department, the buyer must withhold against the full sale consideration, not just the gain. We file for the certificate before closing so your cash isn't trapped until you file a return and wait for a refund.

Repatriation: Form 15CA/15CB

Sale proceeds land in your NRO account first. We prepare the Form 15CB chartered accountant certificate and the Form 15CA declaration needed to move up to USD 1 million per financial year out through your bank.

US or Canada foreign tax credit

If you're a US person, the gain is also reportable on Schedule D. We coordinate Form 67 in India with Form 1116 in the US under DTAA Article 25 so the same gain isn't taxed twice.

The Indexation Trap

Search any Indian tax forum and you'll find confident answers about the Budget 2024 "grandfathering" choice between 20% with indexation and 12.5% without. Most of those answers don't mention who that choice actually applies to.

Seller typeProperty acquired before Jul 23, 2024LTCG rate option
Resident individual / HUFYesBetter of 20% with indexation, or 12.5% without
NRIYes12.5% without indexation only - no choice
Any sellerNo (acquired after Jul 23, 2024)12.5% without indexation

What it costs you: an NRI who assumes they qualify for the indexation choice and structures a deal around the 20% rate can end up with the wrong number for negotiating net proceeds, the wrong TDS expectation at closing, and a mismatch to clean up at return-filing time.

We Plan the Sale, Not Just the Return

Gurleen leads our NRI compliance practice, coordinating the India-side certificate and repatriation work with the US or Canada-side foreign tax credit claim so both filings are built to match from the start, not reconciled after the fact.

How We Engage

  • Calculate your actual LTCG/STCG liability under current rules before you sign
  • File for a Section 195 lower or nil-deduction certificate ahead of closing
  • Prepare Form 15CB and Form 15CA for repatriation through your NRO account
  • File your Indian return to recover any over-withheld TDS
  • Coordinate Form 67 and Form 1116 so the US or Canada foreign tax credit lines up with what was actually paid in India

We work alongside your Indian property lawyer and the buyer's bank - we handle the tax and repatriation mechanics, not the conveyancing.

NRI Property Sale FAQs

What LTCG rate applies to NRI property sales?
12.5% flat with no indexation for sales on or after July 23, 2024, regardless of when you bought the property. NRIs don't get the 20%-with-indexation choice that resident individuals and HUFs get for pre-July-2024 purchases.
How much TDS will the buyer withhold?
Under Section 195, TDS is based on your actual tax liability and applied to the full sale price, not just the gain, unless you get a lower or nil-deduction certificate first. Without one, expect significant cash tied up until you file and claim a refund.
How do I get the sale proceeds back to the US or Canada?
Proceeds go into your NRO account first. From there you can repatriate up to USD 1 million per financial year using Form 15CB (CA certificate) and Form 15CA (your declaration), through an authorized dealer bank.
Do I owe tax in the US or Canada too?
If you're a US person, yes - the gain is reportable on Schedule D. The India-US treaty and Form 1116 let you claim a foreign tax credit for what you paid in India, via Form 67 filed in India, so you're not taxed twice on the same gain.

Plan the Sale Before You Sign, Not After

A call covers your property, your residency status, and what the TDS and repatriation timeline actually looks like. No commitment.

[email protected] +1 (206) 209-8210