Non-Resident Indians (NRIs) selling property in India face mandatory TDS deduction under Section 195 of the Income Tax Act. But do you know how to avoid TDS on sale of property by NRI? You must submit an application in Form 13 to the income tax department to receive a certificate for Nil/Limited Deduction of TDS to reduce TDS on a property transaction by an NRI.
Tips to Reduce TDS for Property Sale by NRI
Some legal options exist to minimize or avoid this deduction:
Approach the Income Tax Department by submitting Form 13 with proof of expected capital gains tax liability. If approved, the buyer deducts TDS at a reduced rate (or zero) instead of the flat 20%.
Reinvest Sale Proceeds Under Section 54/54F:
Section 54: Exempts capital gains if reinvested in residential property (purchase within 2 years/sale within 3 years).
Section 54F: Applies to the sale of non-residential property if the proceeds buy a residential property.
If excess TDS is deducted, file ITR and Form 26AS to claim a refund after the financial year ends. I hope you found this helpful.
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How to Avoid TDS on Sale of Property by NRI?
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2025-05-30T06:59:58+00:00 2025-05-30T07:00:00+00:00Comment
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