You can avoid paying high TDS on your property sale in India by planning your documents and tax calculations before the buyer makes any payment. The most effective method is applying for a Lower TDS Certificate. This single step can reduce your deduction from 20%+ to a much smaller amount. Once you understand how to avoid TDS on sale of property by NRI, the entire sale becomes simpler and more predictable.

Many NRIs struggle because they don’t get the right guidance at the right time. This is where India for NRI plays a key role. We help you understand rules, prepare documents, and move through each step without confusion. Let’s get into this and make the process easy for you to understand.

What is TDS on the Sale of Property by an NRI?

TDS is a compulsory tax that the buyer deducts when an NRI sells property in India. The deduction happens before you receive the sale amount.

Here’s how it works in simple words:

• The law treats NRIs differently from residents.
• So, buyers must deduct TDS at the time of payment.
• Long-term property sales attract 20% TDS plus surcharge and cess.
• Short-term sales follow slab rates, which are even higher.
• The buyer deposits this TDS to the Income Tax Department with your PAN.

But the problem starts when buyers deduct TDS on the entire sale value, not on actual capital gains. And this leads to a high upfront deduction. This is why knowing how to avoid TDS on sale of property by NRI is important before you start the transaction.

Why TDS is Deducted When an NRI Sells Property in India

TDS ensures tax compliance. Since you live outside India, the government uses TDS to guarantee tax collection on time.

• The buyer has the right to deduct TDS
• Failure to deduct leads to penalties for the buyer
• So buyers often over-deduct to stay safe

We at India for NRI help both buyers and sellers understand their responsibilities, which avoids confusion and delays.

How to Avoid TDS on Sale of Property by NRI

You can lower or avoid TDS by showing your correct capital gains to the Income Tax Department. Once the department reviews your documents, it issues a lower TDS certificate. This tells the buyer exactly how much tax to deduct.

Here’s the process how you can avoid TDS on the sale of property in India:

1. Apply for an NRI Lower TDS Certificate

You can apply for a lower TDS certificate to avoid TDS. The certificate is issued under Section 197 of the Income Tax Act. It helps you reduce TDS based on your true capital gains.

With this certificate:

• TDS is deducted only on actual capital gains
• If your gains are low or zero, TDS becomes almost NIL
• The buyer is legally protected
• You don’t have to wait months for refunds

At India for NRI, we help you prepare the documents and apply correctly.

2. Calculate Your Capital Gains Properly

Your capital gains calculation must be accurate. This ensures the Lower TDS Certificate reflects the right deduction.

To apply for the certificate, you must show:

• Purchase cost
• Indexed cost
• Renovation expenses
• Property valuation report (if required)
• Sale agreement values

A correct calculation ensures your TDS is based on accurate figures. This helps avoid higher deductions and unnecessary refunds later.

3. Use Capital Gains Exemptions Before the Sale

When selling a property in India, you can reduce your taxable gains by investing under specific sections.

• Buy another residential property under Section 54
• Invest in 54EC capital gains bonds
• Use Section 54F if selling a non-residential asset

When your gains reduce, your TDS also reduces. If you need assistance with this, we are here to guide you on which exemption suits your situation.

4. Prepare Documents Before Starting the Sale

You must be ready with proper documents before applying for the certificate. Below are the documents that are required when selling your property in India:

• PAN
• Passport
• Purchase deed
• Old renovation bills
• Draft sale agreement
• Bank details
• Power of Attorney (if selling from abroad)

If you live outside India, you can appoint someone through a power of attorney to sell property in India.

If the Property Is Inherited, Plan Carefully

Inherited properties need extra attention. One question that's often asked is: Can NRI sell inherited property in India? The answer is it depends on your cost of acquisition is not the same as a normal purchase. You must consider:

• Old purchase records
• Updated valuation
• Applicable exemptions

This is important when dealing with capital gains tax on inherited property.

Pro Tip: At India for NRI, we simplify this process for NRIs who live abroad and cannot manage paperwork on their own.

TDS on Rental or Investment Property Sales

If your property was rented, your capital gains calculation changes slightly. This happens because the property was used to earn income, not just to hold.

You must consider three things:

1. Depreciation

You claim depreciation each year. This lowers your cost of acquisition. So, when you sell the property, your capital gains increase. This also affects the TDS amount.

2. Improvement Costs

Any major upgrades - like flooring, repairs, or interior work can be added to your indexed cost. This helps reduce your capital gains.

3. Actual Rental Usage

If your property was rented full-time or part-time, your rental income and allowed expenses need to be included. This changes your tax calculation before the TDS is applied.

Repatriating Your Money After the Sale

Once the sale is completed, most NRIs want to move funds abroad. For repatriation, banks require:

• TDS certificate
• Form 15CB and 15CA
• NRO account details

This is a part of NRI property sale repatriation. India for NRI helps you understand these steps and avoid delays.

How India for NRI Supports Your Property Sale

Selling property from outside India can feel slow and confusing. Rules change, documents take time, and small mistakes can lead to high TDS cuts. This is where India for NRI makes the process easier for you. We guide you from the first step to the last so you can complete the sale with clarity and confidence.

We help you check documents, calculate your capital gains, and prepare the right papers before you apply for a Lower TDS Certificate. With proper planning, we can also help you reduce your TDS drastically, in many cases, even to zero. This saves you time, money, and long refund waits.

You will get complete support no matter if your property is inherited, rented, or jointly owned. And if you need to move your funds abroad after the sale, we help you understand repatriation rules without any stress.

With India for NRI, you get a smooth experience at every step of your property sale in India. So don’t wait, just trust us and call now!