NRI tax compliance
The sale, in the right order
Capital gains, withholding and repatriation for non-resident sellers of Indian property — planned in writing before the deed, and followed through to the remittance.
A written reply from Reghu Prasad within two working days
The certificate exists only before the deed
In short
When a non-resident sells Indian property, the buyer withholds tax on the whole sale price, not just the gain. A lower-deduction certificate, applied for before the deed, brings that down to the tax actually due. GSTserve plans this in writing before the deed, files the return and any refund claim, and follows the money through to the remittance abroad.
Read: the full sequence, step by step · Read: the lower-deduction certificate
A buyer has been found for the house in Ernakulam, or the land near Thrissur your father bought in the eighties. The buyer’s lawyer wants to register within the month. A cousin knows someone who handles these matters. Two people have already told you the tax “depends on the case” — which you knew — and neither has told you what it depends on.
The order of events now decides most of what follows: whether tax is deducted on your gain or on the entire sale price, whether the money moves this year or next, and whether anything has to be undone later. That order can be set out in writing, with dates, before you sign anything.
- Before the deed, not after
- The certificate cannot reach a deduction already made. The order is the work.
- Nothing filed without your yes
- Every application, return and authorisation prepared by us and signed by you.
- Followed to the remittance
- The desk stays open until the money reaches your account abroad — Form 145 filed, the Form 146 certificate in place where one is needed, and your bank’s FEMA remittance from your NRO account made.
The sequence
Six steps, and the first three happen before the deed.
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Establish the facts first
Your residential status for the year. How the property came to you — purchase, inheritance, gift. When, and for how much, with what evidence. This goes into a written position before any figure is quoted, because every later step is built on it.
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Compute before you negotiate
The gain is computed under s.72 of the Income-tax Act, 2025 (erstwhile s.48). For inherited property, cost travels from the previous owner under s.73 (erstwhile s.49). For property held before 1 April 2001, the fair-market-value option under s.90(2)(a) — with a valuer’s report obtained now, not at filing.
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Certificate before the deed
An application for a lower or nil deduction certificate under s.395(1) (erstwhile s.197 of the 1961 Act), or through the electronic route under s.395(6), so the buyer deducts against the computed gain rather than the full consideration. The deed date is fixed around this application — not the other way round.
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Prepare the buyer
Your buyer must deduct under s.393(2) (erstwhile s.195), at the rate in force or as the certificate directs — and must first hold a deduction account number under s.397(1)(a). Most buyers have never done this. They receive a written brief from us stating exactly what to do and when.
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The deed and the deduction
Execution, deduction at the certified rate, deposit of the deducted tax, and the buyer’s deduction certificate to you under s.395(4) (erstwhile s.203). Proceeds reach your Indian account. You sign everything yourself; nothing is signed on your behalf.
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Between deed and refund
The longest stretch, and the least explained. The deducted tax must surface in your annual tax statement. Your return goes in under s.263 (erstwhile s.139). Then processing, then the refund. Then the remittance file for your bank: Form 145 under Rule 220 of the Income-tax Rules, 2026, and — where one is needed — the chartered accountant’s certificate in Form 146, from the CA you appoint. The Income-tax Act, 2025 requires this information for a foreign remittance, as s.195(6) of the 1961 Act did. Repatriation itself runs from your NRO account, under FEMA’s USD one-million route. Months, not weeks — so we report at fixed intervals, with dates. Silence is never the signal.
What we do
Eleven things, each of them nameable.
- A written assessment of your residential status and the taxable position of the sale, before you commit to a price or a date.
- Computation of the capital gain, including cost established for inherited or gifted property and the pre-2001 fair-market-value option, worked from the report of a registered valuer you appoint yourself — we tell you what that report has to establish, and we take no referral fee.
- Preparation and filing of the lower-deduction certificate application, and follow-up with the assessing officer’s office until it issues.
- A written brief for your buyer: their deduction obligation, the deduction account number, deposit timelines, and the certificate they owe you.
- A document checklist for the title chain and cost evidence, reviewed against what the computation and the application will need.
- The deed-day checklist: what is deducted, at what rate, deposited by when, evidenced how.
- Tracking of the deducted tax into your annual tax statement, reconciled before filing.
- Preparation of your return of income — including whether the ordinary long-term capital gains charge under s.197 of the 2025 Act (erstwhile s.112) or the non-resident special regime under sections 212–218 (erstwhile Chapter XII-A) serves you better — for your approval and signature.
- Refund tracking and correspondence with the department.
- Assembly of the complete remittance file for your bank — Form 145 under Rule 220 of the Income-tax Rules, 2026 prepared, and the full file behind the Form 146 accountant’s certificate made ready for the chartered accountant you appoint. The certificate itself carries a signature that is theirs alone — which is exactly the boundary we state everywhere else.
- Working with your own accountant abroad: the Indian evidence a treaty claim rests on — the computation, the tax actually deposited, the return and its acknowledgement, the Indian certificates and forms — supplied to them directly on your written instruction, and their questions answered.
The certificate does double work
For a sale from 1 April 2026, a lower-deduction certificate under s.395(1) (erstwhile s.197), applied for in Form 128 and obtained before the sale, does more than reduce the withholding. When the proceeds later leave India and the remittance is above the small-remittance limit for the tax year, Rule 220(1)(b) of the Income-tax Rules, 2026 lets it go through on Part B of Form 145 on the strength of that certificate. Once Part B is furnished, Part C is not required, and neither is the Form 146 accountant’s certificate that goes with it. One decision, taken early, removes two problems later. Smaller remittances go on Part A, and your bank may still ask for its own documents; we set out which route applies before you commit.
Where this usually goes wrong
Five failure modes, all of them avoidable.
Each of these is something we have seen turn a straightforward sale into a year of correspondence. None of them is exotic.
The certificate sought after the deed
The lower-deduction certificate operates prospectively; it cannot reach a deduction already made. Tax withheld at the full rate on the whole consideration then sits with the department until a return is filed and processed — often more than a year.
The buyer deducts on the wrong basis
Advised as if for a resident seller, the buyer deducts 1% under s.393(1) (erstwhile s.194-IA) — or deducts correctly but holds no deduction account number. Either way the credit never reaches you, and correcting it depends on a buyer who has already moved in.
No evidence of cost for an inherited house
Your cost is the previous owner’s cost under s.73, or fair market value at 1 April 2001 under s.90(2)(a). Nobody kept the 1974 deed, and the valuation is commissioned in a panic at filing — when it should have anchored the certificate application.
The reinvestment deadline discovered at filing
The rollover reliefs — sections 82, 85 and 86 (erstwhile 54, 54EC and 54F) — each carry a clock, and any unapplied gain must reach the designated deposit under s.89 by the return due date. Many sellers first hear of the deadline after it has passed.
The remittance blocked at the bank
The tax is settled, and the transfer stalls: the bank asks for the remittance information return under s.397(3)(d) (erstwhile s.195(6)) and the accountant’s certificate on the day of transfer — documents that could have been assembled weeks earlier.
01Where the property is
The filings are national. One step is not.
Almost all of this sequence is indifferent to where the property stands. The residential status, the computation, the return, the withholding, the information return and the remittance file are prepared and filed on all-India systems. A flat in Chennai and a house in Tripunithura are the same work, done the same way, and we have handled matters in Tamil Nadu and Karnataka as well as across Kerala.
One step is different, and we would rather you heard it here than found it out in week six. The application for a lower-deduction certificate under s.395(1) goes to your jurisdictional assessing officer — a specific officer, in a specific range, wherever the property or the assessee is assessed. We prepare and pursue that application through the electronic route and written correspondence, which is the route the law provides and which usually suffices, wherever the officer sits.
If your matter turns on someone appearing before the officer in person, we will say so at the assessment stage, before you engage us — that appearance has to be by you or by a representative the law allows — and tell you what it means for your dates.
The valuer, and who appoints them
A fair-market-value substitution on an inherited or long-held property rests on a registered valuer’s report. That is a signature we cannot give. You appoint the valuer yourself, anywhere in India — and we take no referral fee — and we tell you precisely what the report has to establish so it holds up when the computation is examined.
The document under the tax
Title, succession and partition are questions for an advocate, not for us. We compute on the position those documents establish, and we tell you when the position is not yet established.
Where our work ends
The certificate that accompanies an outward remittance must be signed by a chartered accountant. GSTserve Advisory Services LLP is not a firm of chartered accountants and does not present itself as one. We tell you this at the first assessment, not at the bank counter. You appoint your own; we prepare the file their certificate rests on, complete and reconciled. We sell no certificates and take no referral fee — so the professional who certifies answers only to you.
Two situations we are asked about most
If you have already sold
If the buyer deducted at the full rate on the whole consideration, that money is recoverable — through a filed return, processing, and a refund that carries interest. What cannot be recovered is the certificate route, or the time.
What may still be open, depending on your dates, are the reinvestment reliefs and the designated deposit. Send us the deed date; we will tell you in writing which doors remain open.
How we work across time zones
Calls happen on Indian office hours — 9.30 am to 5.30 pm IST, with a named partner. Outside them, message the same number and Reghu returns the call, at a time of mutual convenience. Every call is followed by a written note of what was said and what happens next. Documents move through a shared folder with a running checklist.
Every application, return and authorisation is prepared by us and signed by you. Nothing is filed that you have not read.
Coming home
Returning to India for good? The years around it can be planned.
The years around your return decide how your foreign income and assets are taxed. Most people plan a return to India around family, work and schools. The tax rules run on their own calendar. The year you land, the two or three years after it, and the first year of full residence each treat your foreign income differently — and the differences are large. None of this requires drama. It requires counting days, knowing which of three statuses you hold each year, and doing a few things in the right order. That is work we do daily.
The three windows
- The year you land
- Residence is decided by days, not intentions. Spend 182 days or more in India in the tax year and you are resident for the whole of it. Arrive in the first half of the year and that happens at once; arrive later and it may not.
- The not ordinarily resident years
- For usually two, sometimes three tax years, a returning NRI is resident but “not ordinarily resident”. In those years, income arising abroad generally stays outside Indian tax. This is the window in which most reorganising of foreign affairs is best done.
- When full residence begins
- The window closes on a countable date. From that year, income earned anywhere is taxable in India at the rate in force, and holding any foreign asset or account means filing a return, whatever your income. The disclosure needs records best gathered earlier.
What we do
- We confirm your residential status, year by year, in writing.
- We test your intended return date against the day-count rules before you book travel.
- We identify your not ordinarily resident years and what each one allows.
- We advise on redesignating NRE and NRO accounts, and on whether a Resident Foreign Currency account suits you.
And through the transition
- We prepare and file your Indian income-tax returns through the transition.
- We plan the first disclosure of foreign assets and help you assemble the records it needs.
- We apply treaty relief where the same income is taxed in two countries.
- We tell you plainly when a matter needs a professional we are not, so you can appoint one early.
Tell us your return date, even a rough one. We will tell you what the years around it look like. Two long reads cover this ground in full: the tax years that decide everything, and what happens to the money you built abroad.
Questions we are asked on this page
Five, answered properly.
Do I need to travel to India?
Usually not for the tax work — the certificate application, the return and the correspondence are handled electronically, with your signature obtained remotely. The sale deed itself can be executed through a power of attorney holder you choose and instruct. Whether to attend registration in person is your decision; we will tell you, in advance, which documents require you and which do not. The drafting, attestation and registration requirements for a power of attorney executed abroad depend on where you sign it, and are best settled with your own legal attorney before dates are fixed — that work is theirs, not ours.
The buyer’s lawyer says he will simply deduct 1%.
That is the provision for a resident seller — s.393(1) of the Income-tax Act, 2025 (erstwhile s.194-IA). For a non-resident seller, s.393(2) (erstwhile s.195) applies instead, at the rate in force, unless a certificate directs otherwise. A buyer who deducts on the wrong basis creates a defect that surfaces months later, in your refund. The written brief we give your buyer exists to prevent exactly this conversation.
How long until I actually see the money?
Three clocks run in sequence: the certificate (weeks, before the deed), the deed and deposit of tax (days), and then the return, processing, refund and remittance (months). We cannot compress the department’s clock. What we control is that no clock starts late, no document is asked for twice, and you always know which stage you are in and what date comes next.
The house was my mother’s. There are no purchase papers.
This is the ordinary case, not the difficult one. Your cost is her cost under s.73 (erstwhile s.49); where the property predates 1 April 2001, fair market value on that date can stand in for it under s.90(2)(a), established by a registered valuer’s report. What matters is commissioning that report before the certificate application — not discovering the gap at filing.
Will I be taxed on this again in the US or the UK?
India taxes the gain; your country of residence may also, with relief available under the applicable treaty, given effect in India through s.159 (erstwhile s.90). We do not advise on US or UK tax, and we do not tell you what your position is at home.
What we do is work with your own CPA, chartered accountant or tax adviser so that nothing on the Indian side arrives late or in the wrong shape. That means the Indian position in writing with every figure traceable to a document, the tax actually deducted and deposited evidenced from the department’s own record, the Indian return and its acknowledgement, and the Indian certificates and forms your adviser needs to see — supplied to them directly on your written instruction, on their timetable rather than ours, and with their questions answered.
Whether relief is available to you at all, and whether a credit is allowed, is decided under your home country’s law by the adviser who practises there. We make sure the Indian evidence is complete, on time, and in the form your adviser asks for.
Request a written assessment
Answer what you can. Leave the rest blank.
A partner replies in writing — a preliminary position, not a sales call. Ten fields, no more.
What happens next
Received. Reghu Prasad will reply to your email within two working days, Indian calendar, with a written preliminary position and the list of documents that would firm it up.
If a deed date is already fixed, say so in a reply to that email — it moves you up the queue.
Or speak to someone
+91 80860 75699
info@gstserve.com
Across time zones
One number, answered 9.30 am to 5.30 pm IST. Outside those hours, leave a message on it and Reghu returns the call, at a time of mutual convenience.
The office
A3, 2nd Floor, Nedumchalil Building
(Next to HDFC Bank, Padivattom Branch)
Civil Line Road, Padivattom
Ernakulam – 682024, Kerala, India
The order of events is decided before the deed is signed.
Decide it now. Send us what you have — the deed date matters more than the paperwork you are missing.
Request a written assessmentA written reply from Reghu Prasad within two working days