NRI Property Sale: TDS Cut from 20% to 6%
Situation
An NRI client was selling a residential flat in Mumbai for about ₹1.5 crore. The buyer was preparing to deduct TDS at the standard rate of over 20% on the full sale value, around ₹30 lakh, even though the client's actual capital gains tax liability, after indexation and exemptions, was far lower. Locking up that much cash meant a long wait to claim it back as a refund.
Approach
We computed the client's actual capital gains and expected tax liability, then filed a Lower Deduction Certificate application under Section 197 (Section 395(1) of the Income Tax Act, 2025) on Form 128 (formerly Form 13) well before the sale closed, attaching the computation, sale agreement, PAN, and prior ITRs, and followed up actively with the Assessing Officer.
Outcome
The certificate was issued reducing TDS from 20% to 6% based on actual gains, cutting the amount withheld from roughly ₹30 lakh to ₹9 lakh and freeing up about ₹21 lakh in cash at closing instead of locking it in a refund claim for a year or more.
Identities are anonymized to protect client confidentiality. The situation, approach, and figures reflect an actual engagement.
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