Lower TDS certificate for NRIs selling property in India — step by step
For an NRI selling property in India, a lower TDS certificate under Section 197 lets the buyer deduct tax on the actual computed capital gain — after cost of acquisition and eligible exemptions — instead of the higher default rate that would otherwise apply to the sale.
Why this matters more for property than almost anything else
Of all the situations where NRIs run into TDS trouble, property sales are the biggest, because the numbers involved are large and the gap between 'what's deducted by default' and 'what's actually owed' can be dramatic. A flat in Bangalore bought fifteen years ago for ₹40 lakh and sold today for ₹1.5 crore has a real capital gain far smaller than the full sale value — but a buyer who isn't given a certificate has every incentive to withhold conservatively on the larger number, since they're personally liable if they under-deduct.
What goes into the computation
The certificate application requires a proper capital gains computation: the original cost of acquisition (and any improvement costs), the sale consideration, and any exemptions the seller is eligible to claim — for instance, reinvesting proceeds into another residential property or specified bonds. The exact treatment of the gain depends on the rules applicable for the relevant assessment year, so this is worked out CA-side rather than assumed. See our explainer on what buyers deduct by default for the scale of the problem this solves.
Get your capital gains computed and Form 13 filed before you sign the sale agreement.
Start my application →The application flow
In practice: the CA computes the actual tax liability on the sale, prepares Form 13 with supporting documents (purchase deed, sale agreement, prior ITRs, bank statements), and files it on the income tax e-filing portal against the seller's PAN. The Assessing Officer reviews the computation, may raise queries, and — once satisfied — issues a certificate naming the buyer as the authorised deductor and specifying the rate to apply. Our full process guide covers each of these steps in more depth.
Timing matters — apply before you sign
Because the certificate has to be issued before the buyer makes payment for it to help, timing is everything. Applying only after the sale agreement is signed, or worse, after the payment is made, is too late — TDS at the default rate has likely already happened by then. See our guide on how long the process actually takes so you can plan backward from your target closing date.
Can I get a lower TDS certificate after the sale deed is already registered?
It's much harder. The certificate needs to reach the buyer before they deduct and deposit tax, since it changes what they're required to withhold. If the sale has already closed and tax has been deducted at the higher default rate, your remaining option is usually to claim the excess back by filing your ITR and seeking a refund, rather than applying for a fresh certificate for a transaction that's already complete.
This article is for general information only. For your specific situation, consult a practicing CA.
Don't let your buyer over-withhold
We compute your real capital gains liability and get Form 13 filed before your sale closes.
Apply for Form 13 →