The rules in brief
Everything here applies to tax year 2026-27. Each section is a summary; the full guide has the steps, examples and forms.
Selling
Sell after more than 24 months and the gain is long-term, taxed at 12.5% without indexation, plus surcharge (capped at 15%) and 4% cess (2025 Act s. 197was s. 112). Sell sooner and the gain is added to your Indian income and taxed at slab rates. See how an NRI’s property gain is calculated.
Because you’re non-resident, the buyer can’t use the resident-seller rule (2025 Act s. 393(1) Table Sl. 3(i)was s. 194-IA). They must deduct at the capital-gains rate on the full price, unless you give them a lower-deduction certificate under 2025 Act s. 395(1)was s. 197, applied for on Form 128 (was Form 13). Here’s how to apply for the certificate.
You can cut the tax by reinvesting: buy another home in India (2025 Act s. 82was s. 54 if you sold a house, 2025 Act s. 86was s. 54F if you sold a plot) or put up to ₹50 lakh (₹50,00,000) into capital-gain bonds across the year of sale and the next year together (2025 Act s. 85was s. 54EC).
The capital gains on property calculator works out the gain, the tax and what reinvesting would save.
Read the full guide to selling property in India as an NRI.
Renting out
Rent from Indian property is taxed in India wherever you live. After municipal taxes, you deduct a flat 30% of what’s left for repairs, whatever you actually spent, plus home-loan interest (2025 Act s. 22was s. 24).
Your tenant must deduct TDS at 30% plus surcharge and cess before paying you (2025 Act s. 393(2) Table Sl. 17was s. 195). If your real tax is lower, you claim the difference back in your return.
Read the full guide to renting out property in India as an NRI.
Buying
An NRI or OCI cardholder can buy residential and commercial property in India, but not agricultural land, plantations or farmhouses. Pay from an NRE, NRO or FCNR account, or by money sent from abroad.
From 1 October 2026, a resident individual or HUF buyer no longer needs a TAN to buy from you: they report the TDS through Form 141 (was Form 26QB) using their own PAN. A company or firm buyer still needs a TAN, files Form 144 (was Form 27Q) quarterly and issues Form 131 (2025 Act s. 397(1)was s. 203A).
If you take a home loan, interest on a let-out property is deductible against the rent. On a self-occupied home the old-regime cap is ₹2 lakh (₹2,00,000) a year (2025 Act s. 22(1)(b), cap in 22(2)was s. 24(b)).
Inheriting
There’s no tax in India on inheriting property. Tax comes later, on rent you earn from it or when you sell. When you sell, your holding period and cost go back to when the original owner bought it.
You’ll usually need a will with probate, a succession certificate or a legal-heir certificate before you can sell. That paperwork takes the longest.
Key numbers for tax year 2026-27
Figures for tax year 2026-27, checked 27 September 2026.
Forms and deadlines
| Form | What it’s for | Who files it | When |
|---|---|---|---|
| Form 128 (was Form 13) | Lower-deduction certificate, so the buyer or tenant deducts less | You, on TRACES | Before the sale |
| Form 132 (was Form 16B) | TDS certificate proving what an individual or HUF buyer deducted from you (from 1 October 2026) | Buyer, after Form 141 | After the buyer’s statement |
| Form 131 (was Form 16A) | TDS certificate proving what a tenant, or a company or firm buyer, deducted from you | Tenant, or company or firm buyer | After their quarterly TDS return |
| Form 145 (was Form 15CA) and Form 146 (was Form 15CB) | Needed by your bank to send money abroad from NRO | You, with a CA for the accountant’s certificate | Before each transfer |
| ITR-2 | Your return: reports rent and gains, claims back extra TDS | You | 31 July 2027 |
Worked example: the most common case
Anita lives abroad and sells her flat in India, with no other Indian income that tax year. We ignore stamp duty and brokerage to keep it simple.
| Their actual tax | Amount |
|---|---|
| Long-term gain (₹1,20,00,000 − ₹60,00,000) | ₹60,00,000 |
| Tax at 12.5% | ₹7,50,000 |
| Surcharge | ₹75,000 |
| Cess | ₹33,000 |
| Tax actually owed | ₹8,58,000 |
Without a certificate, the buyer deducts the same rate plus its own surcharge band and cess on the whole ₹1.2 crore.
Common mistakes
- Selling: applying for the lower-deduction certificate after signing. The buyer must deduct at the full rate when they pay.
- Selling: asking the buyer to pay into an NRE account when you didn’t buy the property with money from abroad or from NRE or FCNR. Those sale proceeds go to NRO.
- Renting: letting the tenant skip TDS. You still owe the tax, and the tenant is liable for not deducting it.
- Buying: paying from a foreign card or a relative’s resident account. FEMA allows only money sent from abroad or your own NRE, NRO or FCNR account, and only money from abroad, NRE or FCNR lets you send the sale price back out later.
When to get a chartered accountant
Get one to apply for a lower-deduction certificate, since the cost working sets your rate. You’ll usually need one for Form 146 once you move more than ₹5 lakh abroad in a tax year. Get one too if the property was inherited without a registered will, is jointly owned with a resident, or you’ve received a notice about rent or a sale.
Property in India is one of eight areas covered on VideshTax — see the full site map for the rest.