NRI Clients · Chennai Property
Selling Property in Chennai as an NRI: TDS, Lower-Deduction Certificate & Repatriation
Capital gains computation, the lower or nil TDS certificate, the buyer’s TDS paperwork, Sub-Registrar coordination and Form 15CA/15CB for repatriation, for NRIs selling a flat, house or plot in Chennai from abroad.
How much TDS is deducted when an NRI sells property in India?
When an NRI sells property in India, the buyer must deduct TDS on the full sale price, not just the profit, at the rate applicable to the seller’s capital gain. For property held over 24 months that is 12.5% plus surcharge and cess on the entire consideration, unless the seller first obtains a lower or nil deduction certificate from the Income Tax Department. That certificate lets the buyer deduct tax only on the estimated gain. The rule sits in Section 195 of the 1961 Act and continues, under a renumbered provision, in the Income-tax Act, 2025 from 1 April 2026. For current rules and procedures, see the Income Tax Department e-filing portal.
What we handle on an NRI property sale
Capital Gains Computation
Working out the holding period, cost of acquisition (including the previous owner’s cost for inherited property), improvement costs and the gain, and comparing the sale price with the guideline value.
Lower or Nil TDS Certificate
Preparing and filing Form 13 on TRACES with the sale agreement, cost evidence and computation, and following up with the Assessing Officer until the certificate is issued to the buyer.
Buyer-Side TDS Support
Guiding the buyer through TAN registration, TDS deposit, the quarterly Form 27Q return and the Form 16A certificate, so the credit appears correctly in the seller’s Form 26AS.
Section 54 and 54EC Planning
Assessing whether reinvesting in a new residential house or in specified bonds reduces the tax, and building the timeline before the sale deed is registered.
Form 15CA/15CB and Repatriation
Issuing the Form 15CB certificate, filing Form 15CA, and coordinating with your bank to remit NRO sale proceeds abroad within RBI limits.
ITR Filing and Refund
Filing the Indian return for the year of sale, reporting the gain and exemptions, and claiming a refund where the TDS deducted exceeds the actual tax.
Steps to sell Chennai property as an NRI
- 1
Collect title and cost documents
Gather the parent documents, the original sale deed or settlement deed, the encumbrance certificate, patta, tax receipts and proof of the purchase price and any improvement costs. For inherited property, collect the legal heir or probate papers and the previous owner’s cost.
- 2
Agree the price and check the guideline value
Compare the agreed price with the Tamil Nadu guideline value for the property. If the guideline value is higher than the price beyond a tolerance band, Section 50C may treat the guideline value as the sale consideration for capital gains.
- 3
Apply for the lower-deduction certificate
Once the sale agreement is signed, file Form 13 on TRACES with the buyer’s details, sale agreement and computation. The certificate names the buyer and the rate, so apply well before the planned registration date.
- 4
Execute the sale deed at the Sub-Registrar office
Sign in person at the Chennai Sub-Registrar office or through an attorney holding a Power of Attorney attested at an Indian embassy or consulate and adjudicated for stamp duty in Tamil Nadu. The buyer pays the consideration, less TDS, into your NRO account.
- 5
Make sure the buyer deposits TDS and files Form 27Q
The buyer, using a TAN, deposits the TDS, files the quarterly Form 27Q return and issues Form 16A to you. Check that the credit reflects in your Form 26AS before filing your return.
- 6
Remit the proceeds and file your return
We issue Form 15CB, you or we file Form 15CA, and your bank remits the money abroad. In the following filing season, the Indian return reports the gain, any Section 54 or 54EC exemption, and claims any refund due.
Related services
FAQ
Frequently asked questions
Why does the lower TDS certificate make such a difference?
Without it, the buyer deducts tax on the whole price, not on your profit. Illustrative example, ignoring surcharge and cess: you sell for ₹1.2 crore a flat that cost ₹70 lakh and was held over 24 months. The gain is ₹50 lakh, and tax at 12.5% is ₹6.25 lakh. Without a certificate, TDS at 12.5% on ₹1.2 crore is ₹15 lakh, so ₹8.75 lakh is held until your refund is processed.
How is capital gain on Chennai property taxed for an NRI?
Property held for more than 24 months gives a long-term capital gain, taxed at 12.5% without indexation for transfers on or after 23 July 2024, plus surcharge and cess. Property held for 24 months or less gives a short-term gain, added to your other Indian income and taxed at slab rates. NRIs are taxed on the same gain as residents, but tax is collected upfront through the buyer’s TDS.
Does the buyer need a TAN to buy property from an NRI?
Yes. When the seller is a resident, the buyer can pay TDS through Form 26QB using only a PAN. When the seller is an NRI, the buyer must obtain a TAN, deposit TDS under the non-resident provisions, file the quarterly Form 27Q return and issue Form 16A. Many buyers do not know this, so it is worth raising before the sale agreement is signed.
Can an NRI claim Section 54 or Section 54EC exemption?
Yes, both are available to NRIs. Under Section 54, the long-term gain on a residential house can be exempted by buying another residential house in India within one year before or two years after the sale, or building one within three years, with the exemption capped at ₹10 crore. Under Section 54EC, up to ₹50 lakh of gain can be invested in specified bonds within six months of the sale.
How much of the sale money can an NRI send abroad?
Sale proceeds are credited to your NRO account, and you can remit up to USD 1 million per financial year from NRO balances after Form 15CA and, where required, a Form 15CB certificate from a Chartered Accountant. Proceeds of up to two residential properties bought with foreign funds or inherited may be repatriated, subject to RBI conditions. Your bank will ask for the sale deed, tax proof and the 15CA acknowledgement.
Can I sell Chennai property without travelling to India?
Yes. You can sign a specific Power of Attorney in favour of a trusted person in Chennai, attested at the Indian embassy or consulate where you live. After it arrives in India, it is typically presented for adjudication and stamp duty in Tamil Nadu before your attorney uses it at the Sub-Registrar office. We coordinate the tax paperwork with your attorney and buyer remotely throughout.
What happens if the guideline value is higher than my sale price?
Section 50C may apply. If the stamp duty value fixed under the Tamil Nadu guideline value exceeds the actual sale price by more than a tolerance band, the stamp duty value is treated as the sale consideration for computing your capital gain. You can ask the Assessing Officer to refer the valuation to a Valuation Officer if you believe the guideline value is higher than the property’s fair market value.
How long does a lower TDS certificate take, and when should I apply?
Apply as soon as the sale agreement is signed and the buyer’s PAN and TAN details are known. Processing time depends on the Assessing Officer and how complete the application is, so we recommend building a buffer of several weeks before the planned registration date. Filing with a clear computation, cost evidence and the sale agreement usually reduces follow-up queries from the department.
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