When an NRI sells property in India, the buyer must deduct TDS before making payment. This section 195 TDS calculator for NRI seller gives you the exact amount — broken down by base tax, surcharge, and cess — for both LTCG and STCG scenarios. It also handles the most critical split: whether a Lower Deduction Certificate has been obtained, which determines whether TDS hits the full sale price or only the capital gain.

What Is Section 195 TDS Calculator NRI Seller?

Section 195 of the Income Tax Act, 1961 (renumbered Section 393 under the Income Tax Act, 2025, effective 1 April 2026) makes the buyer responsible for deducting tax at source on any payment to a non-resident that is chargeable to tax in India.

When the payment is for the sale of immovable property, the deduction is based on capital gains rates — not a flat 1% like under Section 194-IA for resident sellers. There is also no minimum transaction threshold: even a ₹20 lakh flat sold by an NRI attracts TDS under Section 195.

This calculator is built for NRI sellers (including OCIs and PIOs), their buyer counterparts, CAs, property lawyers, and NRI-focused banking relationship managers who need an accurate TDS figure before a transaction closes.

Section 195 TDS Calculator NRI Seller — Formula (Section 195, Income Tax Act / Section 112(1)(c), Finance Act 2024)

The Finance (No. 2) Act, 2024 amended Section 112(1)(c) to set a flat 12.5% LTCG rate for non-residents effective 23 July 2024 — removing indexation and eliminating the dual-computation option that resident taxpayers retain.

Step 1 — Capital Gain
Capital Gain = Sale Consideration
             − Cost of Acquisition
             − Cost of Improvement
             − Transfer Expenses

Step 2 — TDS Base
  Without Lower TDS Certificate (default): TDS Base = Sale Consideration
  With Lower TDS Certificate (Section 197): TDS Base = Capital Gain

Step 3 — Base Tax Rate
  LTCG (held > 24 months): 12.5%
  STCG (held ≤ 24 months): 30% (buyer's conservative default)

Step 4 — Surcharge on Base Tax (Capital Gains — capped at 15%)
  Capital Gain ≤ ₹50 lakh:          Nil
  Capital Gain ₹50 lakh – ₹1 crore: 10%
  Capital Gain > ₹1 crore:           15%  ← surcharge on CG is capped here

Step 5 — Education Cess
  4% on (Base Tax + Surcharge)

Step 6 — Total TDS
  Total TDS = Base Tax + Surcharge + Cess

Effective LTCG rates (FY 2026-27):

The 14.95% ceiling does not change no matter how large the property sale because surcharge on capital gains is statutorily capped at 15% under Section 112.

NRI-specific restriction: Resident individuals can choose between 12.5% (no indexation) and 20% (with indexation) for properties acquired before 23 July 2024. NRIs cannot. The second proviso to Section 112(1) that restored this option for residents does not extend to non-residents. NRIs always pay 12.5% regardless of the purchase date.

How This Calculator Works

1. Select gain type. Choose LTCG (property held more than 24 months) or STCG (24 months or less). Holding period for inherited property starts from the date the previous owner acquired it.
2. Enter sale consideration. Use the amount agreed in the sale deed. Section 50C may apply if the sale price is below 110% of the stamp duty / circle rate — but TDS is always calculated on the actual sale consideration, not the circle rate.
3. Enter cost of acquisition. For inherited property, use what the previous owner paid (or fair market value as on 1 April 2001 if the original purchase was before that date).
4. Add improvement and transfer costs if applicable. Renovation and structural capital expenditure counts as cost of improvement. Routine maintenance does not. Transfer expenses include brokerage, stamp duty on the sale, and legal fees paid by the seller.
5. Select whether a Lower Deduction Certificate (Section 197) has been obtained. This is the most impactful choice in the calculator. Without it, TDS is deducted on the full sale price. With it, TDS is deducted on the capital gain only. Applying for an LDC (Form 128 under ITA 2025, earlier Form 13) before the transaction closes can save the NRI several lakhs that would otherwise be locked with the department until an ITR refund is processed.
6. Click Calculate. The tool shows capital gain, TDS base, surcharge bracket, cess, total TDS to be deducted, effective rate, and net proceeds to the NRI.

Step-by-Step Example Calculation

Scenario: An NRI in Dubai sells a Mumbai flat in August 2026.

Step 1 — Capital Gain ₹1,50,00,000 − ₹45,00,000 − ₹5,00,000 − ₹2,00,000 = ₹98,00,000

Step 2 — TDS Base No LDC → TDS Base = ₹1,50,00,000 (full sale consideration)

Step 3 — Base Tax 12.5% × ₹1,50,00,000 = ₹18,75,000

Step 4 — Surcharge Capital gain is ₹98 lakh → falls in the ₹50L–₹1Cr bracket → 10% surcharge 10% × ₹18,75,000 = ₹1,87,500

Step 5 — Education Cess 4% × (₹18,75,000 + ₹1,87,500) = 4% × ₹20,62,500 = ₹82,500

Step 6 — Total TDS ₹18,75,000 + ₹1,87,500 + ₹82,500 = ₹21,45,000

Net proceeds to NRI: ₹1,50,00,000 − ₹21,45,000 = ₹1,28,55,000

Same example with LDC obtained:

TDS Base switches to capital gain = ₹98,00,000

Base Tax: 12.5% × ₹98,00,000 = ₹12,25,000
Surcharge (10%): ₹1,22,500
Cess (4%): ₹53,900
Total TDS with LDC = ₹14,01,400

The LDC saves the NRI ₹7,43,600 in blocked funds — money that would otherwise sit with the department until the ITR refund cycle.

Who Should Use This Section 195 TDS Calculator NRI Seller

• NRI property sellers who need to know how much the buyer will withhold and whether to apply for a Lower Deduction Certificate before signing the sale deed.
• Property buyers purchasing from an NRI — you are legally responsible for deducting and depositing TDS correctly. An error results in interest at 1%–1.5% per month plus an equal penalty under Section 201.
• Chartered Accountants and tax professionals handling NRI property transactions and advising on TDS planning, Form 128 applications, and FEMA compliance.
• Company Secretaries and advocates involved in commercial property transfers by non-resident entities.
• NRI-focussed bankers and relationship managers at HDFC, ICICI, Axis, and other banks who help clients understand repatriation and TDS before funds leave India.
• OCIs and PIOs selling property inherited from Indian parents or family members.

Latest Rules You Should Know (2026)

Budget 2024 — LTCG rate change (effective 23 July 2024): The LTCG rate on property for non-residents dropped from 20% (with indexation) to 12.5% (without indexation), per the Finance (No. 2) Act, 2024. NRIs have no choice between the two methods — 12.5% applies regardless of purchase date.

Budget 2026 — Procedural simplification (effective 1 October 2026): Individual and HUF buyers purchasing property from NRIs no longer need a TAN. From 1 October 2026, they can deposit TDS using their PAN via a challan-cum-statement. Company and firm buyers still require a TAN. The TDS rates are unchanged.

ITA 2025 (effective 1 April 2026): Section 195 is renumbered Section 393 under the new Income Tax Act, 2025. Form 13 (Lower Deduction Certificate application) is now Form 128. Form 27Q (TDS return for NRI payments) is renumbered Form 144. The substantive TDS rates and computation methodology remain identical.

DTAA benefit: If the NRI's country of residence has a Double Taxation Avoidance Agreement with India, a more favourable rate may apply. The NRI must provide a Tax Residency Certificate to the buyer, who can then deduct at the treaty rate instead of the Finance Act rate. This calculator does not compute DTAA rates — consult a CA for treaty-based claims.

Common Mistakes People Make

• Applying Section 194-IA instead of Section 195. Section 194-IA (1% TDS, only for transactions above ₹50 lakh) is for resident sellers only. Using it for an NRI sale can cause the NRI's TDS credit to disappear from Form 26AS and trigger reassessment notices years later.
• Deducting TDS only on the capital gain without an LDC. Without a Section 197 certificate, the default rule mandates TDS on the full sale consideration, not just the profit. This is the single most expensive mistake buyers make.
• Using the old 20% LTCG rate. Many online calculators and property consultants still show 20% for NRI LTCG. The rate changed to 12.5% on 23 July 2024. Over-deducting locks the NRI's money with the department for months.
• Assuming NRIs can choose between 12.5% and 20% with indexation. That option applies only to resident individuals and HUFs. NRIs pay 12.5% flat — no indexation, no choice.
• Ignoring surcharge bracket shifts. A ₹49 lakh gain attracts 0% surcharge; a ₹51 lakh gain attracts 10%. The effective TDS rate jumps from 13% to 14.30% — a difference that is easily avoidable with LDC planning and proper gain computation before the transaction closes.
• Not accounting for the Section 50C rule. If the sale price is more than 10% below the stamp duty value, the tax department will substitute the stamp duty value as the sale consideration for capital gains computation. This does not change the TDS base (TDS is on the actual sale consideration), but it does affect the NRI's actual tax liability.

FAQs

What is the TDS rate under Section 195 for NRI property sale in FY 2026-27?

For long-term capital gains (property held more than 24 months), the TDS rate is 12.5% plus surcharge (0%, 10%, or 15% depending on the capital gain amount) plus 4% education cess. The maximum effective LTCG rate is 14.95% for gains above ₹1 crore. For short-term gains (held 24 months or less), buyers typically deduct at 30% plus applicable surcharge and cess, giving a maximum effective rate of about 35.88%.

Is TDS under Section 195 deducted on the sale price or only the profit?

By default — when no Lower Deduction Certificate (Form 128 / Section 197) has been obtained — TDS is deducted on the entire sale consideration, not on the profit. A Section 197 certificate from the assessing officer authorises the buyer to deduct TDS on the actual capital gain amount only.

Can an NRI apply for a nil TDS certificate to avoid deduction entirely?

Yes, if the NRI can demonstrate that their actual tax liability is zero (for example, because the property was sold at a loss or full exemption is available under Sections 54 / 54EC), the assessing officer may issue a nil deduction certificate. The application is filed online through TRACES in Form 128 (previously Form 13) before the sale is executed.

What form does the buyer use to file TDS returns for an NRI property sale?

The buyer must file TDS returns in Form 144 (previously Form 27Q), not Form 26QB. Form 26QB is restricted to transactions involving resident sellers. Using the wrong form causes the NRI's TDS credit to go missing from their tax records, which can take years to correct.

Does Section 195 TDS apply to all NRI property sales regardless of sale value?

Yes. Unlike Section 194-IA (which applies only when the sale consideration exceeds ₹50 lakh), Section 195 has no threshold. TDS must be deducted on any payment to an NRI that is chargeable to tax in India, including on a ₹10 lakh flat sold by an NRI.

Can the NRI claim a refund if TDS is deducted at a higher rate?

Yes. If TDS is deducted on the full sale consideration (default, without LDC) but the NRI's actual tax liability is lower, the excess can be claimed as a refund by filing an ITR in India. The refund process typically takes several months to a year, which is why advance LDC planning is strongly recommended for high-value transactions.

Does Budget 2026's TAN removal change how TDS is calculated?

No. From 1 October 2026, individual and HUF buyers can deposit TDS using their PAN instead of a TAN — this is a procedural simplification only. The TDS rates, the obligation to deduct, and the computation formula are all unchanged.

Related Tools on Toolisky

Note: toolisky.com was not reachable from this build environment, so the sitemaps could not be fetched. Do not invent URLs. Keshav — please replace the placeholders below with actual links once available.

• Long-Term Capital Gains Tax Calculator for Property — compute your LTCG before deciding on an LDC application
• Income Tax Calculator for NRI — determine overall India-source tax liability for the year
• Section 54 / 54EC Exemption Planner — see how reinvestment in bonds or residential property reduces your taxable gain
• Form 26AS TDS Credit Checker Guide — verify TDS credit appears correctly after buyer files Form 144
• Stamp Duty & Registration Calculator — check stamp duty cost by state before finalising the sale deed