NRI Taxation Services

Property Transactions, Capital Gains, and Foreign Remittances (15CA/15CB)

Overview

Non-Resident Indians (NRIs) who hold assets or earn income in India are subject to distinct tax laws under the Income-tax Act, 1961, and Foreign Exchange Management Act (FEMA) guidelines. Managing these assets requires specialized knowledge of indexation, Double Taxation Avoidance Agreements (DTAA), and RBI repatriation limits.

At Dhalkari & Bhawalkar, we provide specialized NRI Tax Consultation. We assist NRIs with capital gains tax calculations on property sales, lower TDS certificate applications, NRO/NRE account taxation, and the generation of mandatory Form 15CA and Form 15CB certifications for seamless repatriation of funds.

NRI Taxation Specialties
  • NRI Property Sale Tax: Calculating exact capital gains and handling heavy TDS deductions on sales.
  • Lower TDS Certificate: Applying to the Income Tax Department (under Section 197) to reduce TDS from 20% to actual tax rates.
  • Form 15CA & 15CB: Drafting and certifying remittances to satisfy bank compliance rules for outward transfers.
  • DTAA Advisory: Helping NRIs claim double taxation exemptions to avoid paying tax twice on the same income.

Benefits

  • TDS Liability Optimization: Under normal rules, buyers of NRI properties must deduct a flat 20% TDS on the *sale value* (not the profit). We apply for a Lower TDS Certificate so that TDS is only deducted on actual capital gains, preserving your liquid cash.
  • Double Taxation Relief: We utilize DTAA treaties between India and your country of residence (USA, UK, Canada, UAE, etc.) to claim tax credits and avoid double taxation.
  • FEMA and RBI Compliance: Protect your remittances from compliance queries by banks by securing standard Form 15CB CA certificates.
  • Reinvestment Schemes: Plan your capital gains reinvestments under Section 54 (buying another house property) or Section 54EC (Capital Gain Bonds) to save tax legally.

Process for NRI Property Sale & Remittance

  1. Capital Gains Computation: We compute capital gains by applying indexation benefits to the original purchase cost and subtracting renovation/improvement costs.
  2. Applying for Lower TDS (Section 197): We file Form 13 on the income tax portal. The department reviews the computation and issues a certificate specifying a lower TDS rate (e.g. 1% to 3% instead of 20%).
  3. Remittance Certification: Once the sale proceeds are received in your NRO account, we issue Form 15CB (CA Certificate) and assist you in filing Form 15CA (undertaking) to transfer the funds to your overseas bank account.

Required Documents

  • PAN card and passport/OCI card.
  • Purchase deed of the property (showing original cost and date).
  • Sale agreement or draft agreement (showing final sale price).
  • Proof of improvements/renovations (invoices, bank statements showing payments).
  • NRO/NRE bank statements.
  • Tax Residency Certificate (TRC) from your country of residence.

Timelines

  • Lower TDS Certificate: Takes 30 to 45 working days to be issued by the Income Tax Department. (Must be applied for before the buyer pays the sale consideration).
  • Form 15CA & 15CB: Prepared and uploaded within 2 to 3 working days once complete bank statements and documents are shared.

Frequently Asked Questions

Under Section 195 of the Income-tax Act, if a buyer purchases property from a Non-Resident Indian, they are required to deduct TDS at a flat rate of 20% (plus applicable surcharge and cess, making it around 22.88% or more) on the *total sale consideration* if it is a Long-Term Capital Gain. To avoid this cash lockup, the NRI seller must apply for a Certificate for Deduction of Tax at Lower Rate under Section 197, which directs the buyer to deduct TDS only on the actual capital gains (profit) rather than the total sale value.

Form 15CA is a declaration filed online by the remitter (the person transferring funds abroad) declaring that tax has been paid on the remittance. Form 15CB is a formal Certificate issued and digitally signed by an independent Chartered Accountant certifying that the remittance is tax-compliant under the Income-tax Act and DTAA provisions. Banks require both forms before processing outward remittances from NRO accounts.

Under the Liberalised Remittance Scheme (LRS) and FEMA regulations, an NRI can repatriate up to USD 1 million (1,000,000 USD) per financial year from their NRO account, subject to payment of applicable taxes. The remittance requires Form 15CA/15CB certification and a standard bank application. Remittances from NRE accounts are fully repatriable without limits.
NRI Tax Consultation

Selling a property in Nashik or Pune? Contact our NRI tax desk to apply for lower TDS certificates, compute capital gains, and prepare Forms 15CA/15CB.

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