By CA Subin B · Published 2 August 2026 · Subin B & Associates, Chartered Accountants
When a buyer purchases immovable property from a Non-Resident Indian (NRI), Indian tax law requires the buyer to deduct tax at source (TDS) under Section 195 of the 1961 Act (Section 393(2), Table Sl. No. 17 of the Income-tax Act, 2025). Unlike sales between resident Indians where TDS is 1%, an NRI seller faces TDS on the total gross sale consideration rather than the actual capital gain.
To prevent excess tax from being locked up until a refund claim is processed, the NRI seller can apply to the Assessing Officer for a lower or nil TDS certificate. Under the 1961 Act, this application was made in **Form 13 under Section 197**. From Tax Year 2026-27 under the Income-tax Act, 2025, the application is filed in **Form No. 128 under Section 395**.
Capital gains are computed under Section 48 of the 1961 Act (Section 72 of the Income-tax Act, 2025). Once the transaction completes and net proceeds are deposited into the seller's NRO account, repatriation up to USD 1 million per financial year is permitted under FEMA, supported by CA certification in Form 15CB (now Form 146) and Form 15CA (now Form 145).
Subin B & Associates handles end-to-end capital gains computation, Form 128 (Form 13) lower TDS applications, and FEMA repatriation.
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