Neutral impactCorporate Action
Property sale in India: NRI sellers face different TDS rules from residents—here's what to know
Mint 1 hr ago·20 Sept 2026, 3:09 pm
The Income Tax Act requires buyers to deduct tax at source (TDS) when they purchase a property. For resident sellers, the buyer must withhold 1% of the sale consideration. For non‑resident Indians (NRIs), the TDS is not a flat 1%; instead it is calculated at the rate applicable to the seller’s capital gains, which can vary based on the holding period and any exemptions.
This distinction affects the cash the seller receives at closing and the paperwork needed to claim any excess tax back. NRI sellers may need to plan for a larger upfront deduction and ensure they have the required PAN and Form 16A, while resident sellers face a predictable 1% withholding.
Investors should watch for any amendments to the TDS rules in upcoming finance bills and for clarifications from the tax department on documentation. Such changes could shift the effective cost of buying or selling property and influence market activity, especially in segments with strong NRI participation.
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