Selling a flat or plot in India from abroad is harder than buying one was. As an NRI selling property in India, you meet rules that resident sellers never see. The buyer must deduct tax at source at a much higher rate. India taxes the gain regardless of where you live. The sale proceeds sit in an NRO account until you clear a repatriation process.

None of this is unmanageable. The problem is that most NRIs learn the rules mid-transaction. Usually a buyer’s lawyer asks for a tax certificate, or a bank refuses to remit the money abroad. Deals stall, and sellers accept lower prices just to close.

This guide sets out the sequence for an NRI sale in India in 2026. It covers the TDS the buyer deducts, the capital gains computation, the valuation report at the centre of it, and how to move the money out afterwards. It focuses on residential property in Telangana and Andhra Pradesh, but the tax rules apply nationwide. Confirm the current rates with your chartered accountant before you sign.

Who counts as an NRI for the sale

Your residential status for tax purposes depends on days spent in India in the relevant financial year, not on your passport. If you qualify as a non-resident under the Income Tax Act, the NRI rules apply to your sale. Your Indian passport does not change that. OCI card holders follow the same rules as NRIs for these purposes.

Check your status for the year of sale first. It determines the TDS rate, the tax computation and the repatriation route.

TDS rules for an NRI selling property in India

When a resident buys property from an NRI, the buyer must deduct tax at source under Section 195. The deduction applies to the entire sale consideration, not just the gain. For long-term capital gains, the base rate is 12.5 percent, plus surcharge and cess. For short-term gains, the rate follows the seller’s income slab.

Because the buyer deducts TDS on the full sale price, it often exceeds the actual tax due by a wide margin. Consider an NRI who bought a flat for 60 lakh and sells it for 80 lakh. The buyer deducts TDS on 80 lakh, even though the gain is only 20 lakh.

There is a remedy. You can apply to the Income Tax Department for a lower or nil deduction certificate under Section 197 before the sale. The application needs a computation of your expected capital gain, which is where the valuation report comes in.

How capital gains are computed

The gain is the sale price minus the cost of acquisition and the cost of improvements. Two rules matter for NRIs:

  • Holding period. Property held for more than 24 months produces a long-term gain, taxed at the concessional rate. Anything shorter is short-term and taxed at slab rates.
  • Cost for old property. For property acquired before 1 April 2001, you can substitute its fair market value on that date for the original cost. A registered valuer must certify the FMV, and the law caps it at the stamp duty value on that date.

Since the 2024 changes, long-term gains on property attract 12.5 percent tax without indexation. Sellers who acquired property before 23 July 2024 may, in some cases, choose the older 20 percent rate with indexation if it results in lower tax. Ask your CA to run both computations.

Why a valuation report sits at the centre

Three parts of the process depend on a defensible market value:

  • The FMV as on 1 April 2001 for inherited or pre-2001 property, which sets your cost base.
  • Your lower deduction certificate application, which needs a credible gain estimate.
  • Finally, the sale price itself, which the tax department may question if it falls below the stamp duty value.

A report from an IBBI-registered valuer covers all three. On Proprify, an NRI can order both the FMV 2001 report and the current market valuation online in a few minutes, see the quote before paying, and track the site visit and delivery on WhatsApp from abroad. Reports come from IBBI registered valuers and arrive by email, usually within 48 hours of the inspection.

Selling inherited property as an NRI

Inherited property is common among NRI sellers. The rules are favourable. First, the original owner’s holding period counts towards yours. Second, the cost of acquisition is the original owner’s cost, or the FMV as on 1 April 2001 for older property.

Make sure the title is in your name before you sell. You may need a registered succession document, a legal heir certificate or a probated will, and the buyer’s bank will ask for it. Sort this out before listing the property, not after.

The repatriation step

The sale proceeds go into your NRO account. From there, you can repatriate up to USD 1 million per financial year. First you pay the tax, and then the bank needs Form 15CA and a chartered accountant’s certificate in Form 15CB.

If you bought the property with foreign funds through an NRE or FCNR account, the original investment may qualify for repatriation outside the annual limit, subject to conditions. Keep the original purchase documents and bank records to prove the source of funds.

A practical sequence for the sale

Sellers who do the tax work before they list the property close faster and at better prices. Proprify’s NRI flow is built around that order:

  • Confirm your residential status for the year of sale with your CA.
  • Fix the title, especially for inherited property, before any buyer sees it.
  • Order the valuation online: current market value, and the FMV 2001 report if the property is older. Order both, one after the other, so the same valuer prepares them with matching dates.
  • Send the reports to your CA for the gain computation and the lower deduction certificate application.
  • Sign the agreement of sale with the TDS mechanics written in.
  • Register, with the buyer depositing TDS against your PAN.
  • File your Indian return to claim any excess TDS.
  • Repatriate through your NRO account with Form 15CA and 15CB.

Buyers respond well to a seller who arrives with a valuation and a tax certificate in hand. It signals a clean, predictable transaction, and it removes the two questions that stall most NRI sales.

Selling from abroad without flying back

Most NRI sellers cannot visit for every step, and they should not need to. A registered valuer can inspect the property, verify the documents with the sub-registrar office, and deliver a signed report by email. Proprify adds the pieces that make this workable from another time zone: the quote is visible before payment, the site visit is scheduled with whoever holds the keys, and progress updates arrive on WhatsApp.

If you also intend to list the property, the same valuation becomes the reference price for the listing. That is one report doing two jobs, and it avoids the common problem of an NRI seller pricing from memory and either scaring off buyers or leaving money on the table.

Choose a valuer registered with IBBI, since banks, courts and the tax department accept those reports without argument, and check the registration number on the order page.

Conclusion

An NRI selling property in India keeps control of the process by handling tax before handling buyers. Confirm your status, fix the title, and get the valuation report that establishes both the FMV 2001 and the current value. Then apply for a lower TDS certificate so the buyer withholds what you actually owe, not a quarter of the sale price.

With those steps done from abroad, the sale, the registration and the repatriation follow a predictable path, and more of the proceeds reach your account.

If you own property in Telangana or Andhra Pradesh and cannot travel, order the NRI valuation on Proprify and share the report with your chartered accountant before you set a price.

Last reviewed: September 2026.

This article is general information, not tax or legal advice. Rates, limits and procedures change; confirm the current position with your chartered accountant or lawyer before acting.

Frequently asked questions

What TDS applies when an NRI sells property in India?

The buyer deducts tax on the full sale price, not just the gain. For long-term gains the base rate is 12.5 percent plus surcharge and cess. A lower deduction certificate under Section 197 brings the withholding down to the actual liability.

Can I order the valuation from abroad?

Yes. On Proprify you order online, the valuer inspects locally, and the signed report arrives by email. The FMV 2001 report is a separate order, prepared by the same valuer with a matching date.

Can an NRI repatriate the sale proceeds?

Up to USD 1 million per financial year from an NRO account, after tax is paid and the bank receives Form 15CA and 15CB. Property bought with NRE funds may qualify for repatriation outside that limit.

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About the author: Rama Krishna Mannava is an IBBI Registered Valuer for Land and Building (Reg. No. IBBI/RV/01/2021/14222), Chartered Engineer, and founder of Proprify, the valuer-led property platform. He has delivered over 7,000 valuation reports across Telangana and Andhra Pradesh and is empanelled with more than 25 banks and financial institutions.