Section 393(2)
Payments to a non-resident fall within the consolidated non-resident withholding framework. The correct treatment is fact-specific and should not be reduced to a single universal percentage.
NRI PROPERTY SALE • TAX YEAR 2026–27
Lower or nil TDS certificate for an NRI property sale
Estimate the buyer-side withholding impact, identify missing facts and prepare for an application under section 395(1) in Form 128.
Cash-flow estimate Document readiness Professional review
The calculator does not determine tax liability. The buyer's withholding obligation may depend on the chargeable amount, holding period, total income, surcharge, cess, treaty position, stamp-duty value, joint ownership and any valid certificate. Use the rate confirmed for the specific transaction.
TDS cash-flow estimator
Enter the expected effective withholding rates for your case.
Indicative withholding without certificate
₹14,95,000
At certificate rate₹2,00,000
Potential cash released₹12,95,000
Simple gain indicator*₹48,00,000
Sale cash after first withholding₹85,05,000
*Not a statutory capital-gain computation; excludes indexed or grandfathered cost where relevant, section 78 deemed consideration, exemptions and transaction-specific adjustments.
CURRENT LEGAL FRAMEWORK
New Act references apply from 1 April 2026
Legal basis reviewed 12 September 2026
Section 395(1)
The payee may apply to the Assessing Officer. A certificate may specify a lower rate or no deduction when justified by estimated total income.
Form 128
For Tax Year 2026–27, CBDT guidance identifies Form 128 under the Income-tax Rules, 2026 as the application replacing old Form 13.
Transition from the 1961 Act
For transactions and applications governed before 1 April 2026, the familiar references were section 195 and section 197 / Form 13. CBDT states that an old section 197 certificate issued for projected receipts of Tax Year 2026–27 may continue to be valid after 1 April 2026. The certificate's terms, payee, payer, amount and validity must still be checked.
DOCUMENT READINESS
Information normally reviewed before application
The Assessing Officer or portal may require additional information. A complete application should be prepared before the buyer deducts tax or the transaction closes.
- PAN, passport and residential-status facts
- Overseas address and contact details
- Purchase deed, allotment and possession records
- Purchase payment proofs
- Improvement invoices and payment evidence
- Proposed sale agreement and buyer details
- Buyer PAN, TAN and correspondence
- Joint-owner and joint-buyer details
- Stamp-duty value / circle-rate information
- Transfer expenses and supporting invoices
- Earlier income-tax returns and assessment records
- Estimated total income and tax computation
- Relevant exemption or reinvestment proposal
- Expected payment and registration schedule
- Existing lower-deduction certificate, if any
Official references: Income-tax Act, 2025 as amended by Finance Act, 2026 · Income-tax Rules, 2026 · CBDT forms guidance. Statute, rules, notifications, certificate terms and portal instructions prevail.
HOW WE HELP
Professional review before deduction
Review
Residential status, ownership, holding period, consideration, stamp value, cost and proposed timeline.
Compute
Transaction-specific estimated income, tax, withholding exposure and certificate-rate support.
Prepare
Application data, document index, buyer coordination and clarification-response support.
COMMON QUESTIONS
Before the sale is finalised
Is 12.5% always the TDS rate on an NRI property sale?
No. A headline capital-gains rate and the buyer's withholding obligation are not interchangeable. Surcharge, cess, nature and period of holding, total income, chargeability and certificate terms can change the effective position.
Should the application be filed before the sale deed?
Practically, it should be initiated sufficiently before payment, deduction and registration. Processing time is authority-dependent, so the buyer, consideration and expected schedule should be identified early.
Does Form 128 automatically guarantee a lower rate?
No. It is an application. The Assessing Officer must be satisfied that the estimated total income justifies lower or nil deduction, and may seek clarification or documents.
Can the buyer deduct only on the expected capital gain without a certificate?
The buyer should not unilaterally substitute an informal gain estimate for the statutory withholding obligation. Obtain transaction-specific advice and, where appropriate, a valid certificate.
Plan the withholding before money is blocked.
Confirm the applicable law, computation, documents and buyer timeline before execution.