Real Estate Capital Gains
Not professional advice
This page provides general information only, for the US-India NRI corridor, and is not professional tax, legal, or financial advice. It does not account for your individual circumstances. Rules referenced here can change, and outcomes depend on facts specific to you. Please consult a qualified tax advisor, chartered accountant, or attorney licensed in the relevant jurisdiction before making any decision.
How capital gains on Indian real estate are calculated and taxed when sold by an NRI.
LTCG / STCG classifier for a property sale
Classifies a sale of Indian land/a building as long-term or short-term based on holding period, and estimates the capital gain. Property held more than 24 months is long-term (LTCG); 24 months or less is short-term (STCG).
Does not model indexation (moot for NRIs — the Finance Act 2024 grandfathering option to use 20% with indexation applies only to resident individuals/HUFs, not NRIs), Section 50C/43CA stamp-duty-value substitution, Section 54/54EC/54F reinvestment exemptions, surcharge or cess on the LTCG figure above, or foreign-currency conversion rules. Verify against incometax.gov.in and with a chartered accountant before relying on this for a specific sale.
How this is calculated
Property held for more than 24 months is long-term; 24 months or less is short-term. Capital gain = sale consideration − cost of acquisition − cost of improvement − transfer expenses (no indexation). Since the Finance (No. 2) Act, 2024, long-term gains on land/buildings are taxed at a flat 12.5% without indexation — this applies to NRIs unconditionally, since the Act's grandfathering option (20% with indexation, for property acquired before 23 July 2024) is available only to resident individuals and resident HUFs. Short-term gains have no special rate and are taxed at the seller's ordinary slab rate, which this tool cannot compute.
Not modeled: indexation, Section 50C/43CA stamp-duty-value substitution, Section 54/54EC/54F exemptions, surcharge, cess, and foreign-currency conversion rules.
Sources: Income Tax Dept.: Capital Gains
Section 393(2) TDS-on-NRI-property-sale estimator
Estimates the TDS a buyer must withhold under Section 393(2) when buying property from an NRI seller — applied to the full sale consideration, not just the gain, unless a lower-deduction certificate is held.
Does not model surcharge (10%-15% for capital-gains-type income, depending on your total income — a buyer generally cannot know this), so an actual TDS certificate or return will typically show a somewhat higher effective rate than shown here. Also does not model the buyer's TAN requirement or Form 27Q filing. Verify against incometax.gov.in before relying on this for a specific transaction.
How this is calculated
Section 393(2) requires the buyer to withhold TDS at the rate the gain is actually taxable at, on the full sale consideration — unlike the flat 1% under Section 194-IA for resident sellers. Absent a lower-deduction certificate, this tool uses 12.5% for long-term gains (the flat LTCG rate on real estate since the Finance (No. 2) Act, 2024) and 20% for short-term gains — the statutory rate under Section 393(2) [Table S. No. 17(e)], tied to Section 196's short-term classification, plus a flat 4% cess on whichever base rate applies.
Not modeled: surcharge, the buyer's TAN requirement, and Form 27Q filing mechanics.
Sources: Income Tax Dept.: Section 393 (TDS to non-residents)
Form 13 (lower/nil TDS certificate) explainer
Explains when applying for a Form 13 lower/nil TDS certificate is worth the effort, and roughly how much default withholding it could avoid. Does not determine your actual tax liability — use the classifier tool above, or a tax preparer, to estimate that first.
Because Section 393(2) TDS is withheld on the full sale consideration rather than on your actual gain, the default withholding on a property sale is often much larger than the tax you actually owe. NRIs can apply under Section 197 (Form 13) for a certificate allowing the buyer to withhold at a lower — or nil — rate instead, avoiding a long wait for a refund after filing a return.
Under the Income-tax Act, 2025 (in force from FY 2026-27 onward), Form 13 is renumbered Form 128, and the underlying provision, Section 197, is renumbered Section 395. The mechanism itself — apply before your sale/registration, processed through the TRACES portal, certificate valid for one financial year — is not expected to change, but this renumbering has not been independently verified against the Act's official text.
Does not determine your actual tax liability — enter your own estimate above. Does not guarantee a certificate will be granted at that rate (the Assessing Officer decides) or model processing time (commonly several weeks — apply well before your planned sale/ registration date). Verify against incometax.gov.in before relying on this.
How this is calculated
Estimated default TDS = sale consideration × the same default rate used by the Section 393(2) TDS estimator above (12.5% + 4% cess for long-term, 20% + 4% cess for short-term, the statutory rate under Section 393(2)/196, absent a certificate). Likely excess withheld = default TDS − your entered estimate of actual tax owed, floored at zero. This is a rough comparison to help decide whether applying is worth the effort — not a determination of what certificate rate you would actually receive.
Not modeled: whether a certificate would actually be granted at any particular rate, and processing-time.
Sources: Income Tax Dept.: Certificate of lower/no TDS deduction
Related reading
Selling Property in India as an NRI: LTCG vs. STCG Explained
Cross the 24-month holding line and your property sale is taxed under a completely different regime. Here's what actually changes.
Section 393(2) TDS on NRI Property Sales: What Buyers Withhold
Section 393(2) TDS is withheld on the full sale consideration, not the profit. For a highly appreciated property, that's a very different number than sellers expect.
Form 13 Lower TDS Certificate: Is It Worth Applying?
A lower TDS certificate can be the difference between waiting months for a refund and getting the right amount at closing. Here's how to tell if it's worth the effort.
Section 54/54EC: How NRIs Can Reduce Tax on a Property Sale by Reinvesting
The LTCG on an Indian property sale doesn't have to be the final number. Reinvesting the gain, in the right window, can bring it down to zero.