NRI Property Sellers Lose Lakhs to TDS Delays: How Budget 2026 Can Help

Key Highlights

• Buyers must obtain a Tax Deduction and Collection Account Number (TAN), deposit the deducted tax, and file quarterly e-TDS returns (Form 27Q)—a complex process for what is often a one-time transaction. Fund blockage and missed opportunitiesDeloitte partner Divya Baweja notes that the cumbersome process discourages buyers from dealing with NRI sellers and often results in excessive upfront tax deductions—even in cases where the seller’s actual tax liability is much lower or nil.
• The process of securing a lower or nil TDS certificate from the tax department can be lengthy, sometimes delaying or derailing property deals altogether. CA Dr Suresh Surana adds that while Section 195 is intended to protect tax revenues, its procedural demands can lead to disproportionate withholding, leaving NRIs with large sums stuck until refunds are processed. Existing relief — but with limitationsThe law does offer relief through Section 197, which allows NRI sellers to apply for a lower or nil TDS certificate by filing Form 13 online.
• This requires detailed disclosures on capital gains computation, cost of acquisition, indexation and eligible exemptions (such as Sections 54 or 54F).
• While helpful in theory, experts say procedural delays often limit its practical effectiveness. What Budget 2026 could fixTax experts argue that Budget 2026 should focus on procedural simplification without weakening tax oversight.
• One key recommendation is to introduce a simplified challan-cum-statement mechanism for NRI property sales, similar to Form 26QB used for resident sellers.