+91 89287 94727


73 Ocean Street, New South Wales 2000, SYDNEY

Contact Person: Callum S Ansell
E: callum.aus@capital.com
P: (02) 8252 5319


22 Guild Street, NW8 2UP,

Contact Person: Matilda O Dunn
E: matilda.uk@capital.com
P: 070 8652 7276


Genslerstraße 9, Berlin Schöneberg 10829, BERLIN

Contact Person: Thorsten S Kohl
E: thorsten.bl@capital.com
P: 030 62 91 92


Economy, GST

Non-resident Indians who sell house property in India must pay taxes on capital gains. The tax paid on profits depends on whether the capital gains are short or long-term.

How much is the tax paid?

Taxes on long-term capital gains are taxed at 20%. Short-term gains will be taxed at the income tax slabs rates applicable to non-resident Indians on the basis of total taxable income in India for non-resident Indians.

TDS Deductible

From a tax perspective, a buyer is liable to deduct 20.60% TDS in case property being sold has been held for up to 3 years, else 30.60%. Also, Form 15A 15B certificate needs to be provided to the banker to allow repatriation.

Save taxes on capital gains under the following section

Non-resident Indians can claim exemptions under section 54 and section 54EC on long-term capital gains from the sale of residential house properties in India.

The exemption under section 54

It is available when there is long-term capital gain and selling a house property of the NRI. Keep in mind that you do not have to invest the entire sales receipt, but the amount of capital gains. Of course, the purchase price of your new property may be higher than the amount of capital gains.

However, your exemption will be limited to the total capital gain for sale. In addition, you can buy this property either one year before the sale or after two years of selling your property. You are also allowed to invest proceeds in building property, but the construction must be completed within 3 years from the date of sale.

Only one property can be bought or built for the home from capital gains to claim this exemption. It is mandatory that this property is a new home in India. an exemption will not be available for property purchased or built outside India to claim such exemption under section 54. (Remember that this exemption can be withdrawn if you sell this new property within 3 years after purchase).

If you have not invested your capital gains until the date of deposit (usually July 31) of the financial year in which you sold your property, you can deposit your profits in a PSU bank or other bank as agree on banks as per the Capital Gains Account Scheme, 1988. And in your return claim this as an exemption from your capital gains, you don’t have to pay tax on it.

An exemption under Section 54F

They are available when there is a long-term capital gain to sell any capital assets that are not residential house property. To claim this exemption, the NRI must purchase one house property within one year prior to the date of transfer or two years after the date of transfer or construct one house property within 3 years after the date of transfer of capital assets. This new property must be in India and should not be sold within 3 years of purchase or construction.

In addition, the NRI should not own more than one house property (besides the new house) and nor should the NRI purchase within a period of 2 years or construct within a period of 3 years any other residential house. . Here entire sales receipts must be invested. If all sales receipts are invested, capital gains are fully exempt; otherwise, the exemption is allowed proportionately.

An exemption under Section 54 EC

You can save tax on your long term capital gains by investing in certain bonds. Bonds issued by the National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC) have been specified for this purpose. Which are redeemable after 3 years and must not be sold within 3 years from the date of sale of the house property. Keep in mind that you cannot claim this investment under any other deduction. Noted that within 6 months to invest in these bonds. Although this exception is required, you must invest before the date of return filing. You are allowed to invest a maximum of 50lakh in a financial year in these bonds.

The NRI must make these investments and show evidence relevant to the buyer, to ensure that TDS is not deducted on the capital gains. The NRI can also claim the surplus TDS deducted at the time of return filing and claim a refund.

× Whatsapp