Taxes for NRIs Selling Property in Pune: A 2026 Guide to TDS, Capital Gains & Repatriation

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For Non-Resident Indians (NRIs), selling a property in Pune is often less about finding a buyer and more about navigating the complex web of Indian taxation.

The biggest shock for most NRIs? The TDS.

Unlike resident sellers, where TDS is a measly 1%, for NRIs, the buyer is legally required to deduct over 20% of the sale value upfront. If you sell a flat for ₹1 Crore, ₹20+ Lakhs is instantly blocked with the government, even if your actual profit is small.

Here is the complete 2026 guide to minimizing this tax hit and safely moving your money abroad.

1. The “Budget 2026” Relief: No More TAN for Buyers

  • The Old Rule: Previously, if a resident bought a property from an NRI, the buyer had to apply for a special “Tax Deduction Account Number” (TAN). This was a huge hassle, scaring away many local buyers.
  • The 2026 Update: The government has abolished the TAN requirement for resident buyers. They can now deduct and deposit your TDS using just their PAN card.
  • Why this helps you: It makes your property more attractive to local buyers who were previously terrified of the compliance paperwork.

2. Capital Gains Tax: What You Actually Owe

The tax you actually owe (Capital Gains) is often much lower than the tax deducted (TDS).

A. Long Term Capital Gains (LTCG)

  • Criteria: If you held the property for more than 24 months.
  • The New Rule (Post-July 2024): The tax rate is flat 12.5% (without indexation benefits).
  • The “Grandfathering” Option: If you bought the property before July 23, 2024, you can choose the better of two options:
    1. 12.5% Tax (No Indexation)
    2. 20% Tax (With Indexation Benefit – adjusting purchase price for inflation). We calculate both to see which saves you more money.

B. Short Term Capital Gains (STCG)

  • Criteria: If sold within 24 months.
  • Tax Rate: Taxed as per your Income Tax Slab in India (up to 30% + surcharge).

3. The TDS Trap (And How to Fix It)

While your actual tax might be 12.5% on profit, the buyer is forced to deduct TDS on the Sale Value.

  • Standard TDS Rate for NRIs: 20% + Surcharge + Cess = Effective rate ~20.8% to 23.92%.
  • The Problem: On a ₹1 Cr sale, the buyer cuts ₹23.92 Lakhs. If your actual tax liability is only ₹5 Lakhs, the government holds the remaining ₹18 Lakhs until you file a refund request next year.

The Solution: Lower Deduction Certificate (Form 13) You do not have to accept the high TDS.

  1. Apply: Before the sale deed is registered, we apply for a Lower Deduction Certificate (LDC) under Section 197.
  2. Calculation: We show the Income Tax Officer your actual capital gain computation.
  3. Result: The Officer issues a certificate instructing the buyer to deduct TDS at a lower rate (e.g., 3% or 5% instead of 23%).
  4. Benefit: You get significantly more money in your bank account immediately.

4. Repatriation: Moving Money to the USA/UK

Once the money is in your NRO account, you can transfer up to $1 Million USD per financial year. To do this, your bank will demand two documents:

  • Form 15CB: A certificate from a Chartered Accountant (CA) certifying that all taxes have been paid.
  • Form 15CA: An online declaration you file with the Tax Department.

5. Can You Save the Tax Entirely?

Yes, under specific sections:

  • Section 54: Reinvest the Capital Gains amount into another residential property in India (within 2 years or construct within 3 years).
  • Section 54EC: Invest up to ₹50 Lakhs in Capital Gains Bonds (NHAI or REC) within 6 months of the sale. These have a lock-in of 5 years.

Summary Checklist for NRI Sellers

  1. Check Buyer Comfort: Inform them they don’t need a TAN anymore (Budget 2026).
  2. Calculate Liability: Compare the 12.5% vs. 20% tax regime.
  3. Apply for LDC: File Form 13 at least 45 days before the sale registration to save cash flow.
  4. Repatriate Smartly: Ensure you have the 15CA/15CB forms ready before approaching your bank for the wire transfer.

Disclaimer: Tax laws are subject to change. This article is for informational purposes and does not constitute financial advice. Always consult a Chartered Accountant or Tax Lawyer for your specific computation.

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