NRI Selling Property in Pune 2026 — Tax, TDS & Repatriation Checklist
Selling a Pune property as an NRI is not complicated — but it is surprisingly different from what an Indian resident seller experiences. The most frequent shock for NRI sellers: the buyer is legally required to deduct TDS at 22.66% on the entire sale value (not the capital gain) before paying you. On a ₹1 crore Pune flat, that’s ₹22.66 lakh withheld upfront — often coming as a complete surprise at the registration table.
This guide explains every step of the NRI property sale process in Pune: the TDS mechanics, how to get a lower TDS certificate to pay only on your actual gains, the capital gains tax calculation, exemption routes, repatriation limits and process, and the filing requirements that most NRI sellers miss.
The TDS Shock — Understanding Why 22.66%
When an Indian resident sells a property, the buyer deducts TDS at 1% of the sale value (under Section 194-IA). But when an NRI sells, an entirely different provision applies: Section 195 of the Income Tax Act.
Under Section 195:
- Short-term capital gains (held < 2 years): TDS at 30% + surcharge + cess = 34.32% on sale value
- Long-term capital gains (held ≥ 2 years): TDS at 20% + surcharge + cess = 22.88% on sale value
For most Pune property sales by NRIs (held for 2+ years), the applicable TDS rate is 22.88% on the total sale consideration — not the gain, the entire sale price.
Why is it on sale value and not gain? Section 195 requires TDS on the “income element” of the payment — and since the entire sale amount is an income inflow from the NRI’s perspective, the withholding is applied broadly. The buyer is legally protected only by a lower TDS certificate — without it, they must deduct at the full rate.
The Lower TDS Certificate — Form 13
The most important action an NRI seller can take before finalising the sale: apply for a lower TDS certificate under Section 197 (via Form 13) from the Income Tax Department.
What Is a Lower TDS Certificate?
It is a certificate from your Assessing Officer that authorises the buyer to deduct TDS at a lower rate — the rate that corresponds to your actual capital gains tax liability, not the blanket Section 195 rate.
How much does it save? On a ₹1 crore sale:
- Without certificate: TDS = ₹22.88 lakh (22.88%)
- With certificate (assuming LTCG of ₹30L and 20% tax): TDS = ₹6 lakh (6%)
- Cash flow difference: ₹16.88 lakh released upfront
While you would eventually get this refund after filing your ITR, the refund process takes 6–18 months. The lower TDS certificate keeps the money in your hands (or helps the transaction close at the agreed price without the buyer’s cash flow being disrupted).
How to Apply
- File Form 13 online at the Income Tax e-filing portal (incometax.gov.in)
- Provide: PAN card, RERA-registered sale agreement, purchase deed with cost, estimated sale price
- Your CA must prepare the computation showing estimated LTCG and applicable tax
- The Assessing Officer issues the certificate within 30 days (there’s a legal timeline)
Timeline: Apply for Form 13 as soon as the sale price is agreed and the agreement to sell is executed — ideally 6–8 weeks before the registration date.
Capital Gains Calculation — LTCG for NRI Sellers
Long-term capital gains on property (held 2+ years) are taxed at 20% with indexation benefit.
Indexation Benefit
Indexation allows you to inflate the purchase price using the Cost Inflation Index (CII) published by the Income Tax Department, which effectively reduces your taxable gain.
Formula: Indexed Cost of Acquisition = Original purchase price × (CII of sale year ÷ CII of purchase year)
Example calculation:
- Purchased: Hinjewadi 2 BHK in 2016 for ₹52 lakh
- CII 2016-17: 264
- CII 2025-26: 363 (provisional)
- Indexed cost: ₹52L × (363 ÷ 264) = ₹71.5 lakh
- Sale price 2026: ₹95 lakh
- LTCG: ₹95L – ₹71.5L = ₹23.5 lakh
- Tax at 20%: ₹4.7 lakh
- Effective tax on sale: 4.9% versus 22.88% TDS default
What Can Be Added to Cost
The indexed cost can include:
- Original purchase price (stamp duty value or agreement value, whichever is higher)
- Stamp duty and registration paid at purchase
- Home loan processing fees
- Any capital improvements made to the property (renovation that added to value — documented with receipts)
Cannot include: Interior furniture and fittings that are movable, routine maintenance expenses, loan interest paid.
Section 54 — The Property Exemption Route
If you reinvest the LTCG in another residential property in India, the entire gain can be exempt from tax under Section 54.
Conditions for Section 54 Exemption
- You must be an individual or HUF (companies and firms are not eligible)
- The original property must be residential (it is, in typical Pune flat sales)
- Reinvestment must be in one residential property (from FY 2021-22 onward, you can claim for two properties if LTCG is up to ₹2 crore — one-time option)
- Timeline: Purchase the new property within 1 year before or 2 years after the sale date; OR construct within 3 years of sale date
Capital Gains Account Scheme (CGAS)
If the new property is not purchased before the ITR filing deadline (usually July 31), deposit the capital gain amount in a Capital Gains Account Scheme bank account before the deadline. This preserves the exemption while you search for and purchase the new property.
Important for NRI sellers: The exemption is available even if the new property is purchased in India by an NRI. NRIs can purchase residential property in India (commercial, agricultural, and plantation property have restrictions). The new property must be in India.
Form 15CA and Form 15CB — The Remittance Documents
Once the TDS is deducted and the sale is complete, before the buyer transfers funds from India to your foreign account (or to your NRO account for later repatriation), two forms must be filed:
Form 15CA — The Remitter’s Declaration
Filed by the buyer (or authorised agent) before remitting any amount to an NRI. It declares the nature of the payment, applicable TDS rate, and treaty relief (if any).
Form 15CB — The CA Certificate
A certificate from a practicing Chartered Accountant confirming:
- Nature of the payment
- Double taxation avoidance agreement (DTAA) provisions applicable
- That TDS has been correctly deducted
Without Form 15CB from a CA and Form 15CA filed on the income tax portal, the bank cannot process the international transfer. This is a hard regulatory requirement — not optional paperwork.
Fees: CA fees for Form 15CB preparation: ₹5,000–15,000 in Pune. Always use a CA who is experienced in NRI transactions — the documentation requirements are specific.
Repatriation — Getting Money Out of India
Once the property is sold and TDS is deducted, the net proceeds can be repatriated to your country of residence through your NRO account.
Limits
- USD 1 million (approx. ₹8.3 crore at current rates) per financial year per NRI — this is the RBI limit on repatriation from NRO accounts
- Most Pune property sales (up to ₹2–3 crore) are well within this limit
Required Documentation for Repatriation
Your bank (where you hold the NRO account) will require:
- Copy of sale deed (registered)
- TDS deduction certificate (Form 16A issued by the buyer)
- Form 15CA (filed online)
- Form 15CB (from CA)
- NRO account statement showing receipt of sale proceeds
- Self-declaration that funds represent sale proceeds of property (bank provides format)
- Chartered Accountant’s certificate confirming tax compliance
Timeline: Typically 15–30 working days from submission of all documents at the bank. Different banks have different internal SLAs — HDFC, Axis, and ICICI NRI teams are generally faster than PSU banks for this process.
NRI Tax Return Filing — Mandatory Even If Exempt
Many NRI sellers believe that if they have paid TDS and claim Section 54 exemption, they need not file an Indian income tax return. This is incorrect and creates legal risk.
NRI tax return filing is mandatory if:
- Gross income (including capital gains from property sale) exceeds ₹2.5 lakh (basic exemption limit)
- Property is sold for any amount in India
The ITR filing allows you to:
- Claim Section 54 exemption formally
- Claim refund of excess TDS (if lower TDS certificate was not obtained)
- Satisfy future documentation requirements (visa renewal, next property purchase, etc.)
Which ITR form: NRIs file ITR-2 (if no business income) or ITR-3 (if business income). RNOR (Resident Not Ordinarily Resident) individuals may file ITR-1 or ITR-2 depending on income types.
Deadline: July 31 of the assessment year following the sale year (e.g., for a sale in FY 2025-26, deadline is July 31, 2026, unless extended by government notification).
Common Mistakes NRI Sellers Make
1. Not Applying for Lower TDS Certificate
The most expensive mistake. The default 22.88% TDS on full sale value creates a large refund that takes 6–18 months to arrive — when the money could have stayed in your account.
2. Not Tracking the Purchase Cost Properly
NRIs who bought property 10–15 years ago often cannot produce the original purchase deed, stamp duty receipts, or home loan processing fee documents. This results in a higher computed LTCG because indexation cannot be fully applied to undocumented costs.
3. Ignoring Form 15CA/15CB Until Transfer Day
These forms must be filed before the bank transfer — not as an afterthought. If your CA is not prepared in advance, you face delays in receiving your funds.
4. Missing the ITR Filing Deadline
NRI sellers who “forget” to file Indian ITR face notices, penalties (₹5,000–10,000 under Section 234F), and complications in future NRO-to-NRE fund transfers.
5. Not Checking DTAA Benefits
India has Double Taxation Avoidance Agreements with 90+ countries. For NRIs in the US, UK, UAE, Canada, Singapore, and Australia, DTAA provisions may reduce the Indian tax on capital gains further — always check with a CA familiar with the relevant DTAA.
6. Using General Power of Attorney Without Proper Registration
If you are completing the sale through a GPA holder (common for NRIs who cannot travel to India), the GPA must be notarised in your country of residence, apostilled, and registered in India. An unregistered GPA creates title defects.
NRI Seller Checklist
Pre-sale (6–8 weeks before registration):
- PAN card verified active (non-resident NRI PAN is valid — no action needed if already held)
- Form 13 application filed for lower TDS certificate
- CA engaged for Form 15CB preparation
- Original purchase deed, stamp duty receipt, home loan closure certificate collected
- Capital gains computation prepared by CA
At registration:
- Lower TDS certificate provided to buyer (if obtained)
- Buyer to issue TDS cheque to Income Tax Department
- Form 16A to be collected from buyer within 15 days
Post-registration:
- Form 15CA filed online
- Form 15CB obtained from CA
- Sale proceeds received in NRO account
- Bank documents submitted for repatriation
- Capital Gains Account (CGAS) deposit made if Section 54 reinvestment not yet done
- Indian ITR filed by July 31
Conclusion
Selling a Pune property as an NRI in 2026 involves more documentation than a resident sale — but the process is well-defined and the tax outcome can be very favourable with proper planning. The lower TDS certificate under Section 197 is the single most impactful action you can take. Section 54 reinvestment exemption can eliminate the LTCG entirely. And the USD 1 million repatriation limit is sufficient for all typical Pune property transactions.
The key to a smooth sale: engage a CA with NRI transaction experience at least 2 months before your target registration date, and have all your original documents in hand before the sale process begins.
For help connecting with verified Pune property buyers, RERA-compliant agents, and NRI transaction specialists, visit Pune Realty Hub. We handle NRI property sales with full documentation support and transparent pricing.
