Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Why there is so much excess to claim
TDS under Section 195 is taken on your whole sale value, but your tax is only on the gain. The difference is yours to reclaim. Example: you sell a flat for ₹1 crore with a gain of ₹20 lakh. TDS at about 12.5% plus surcharge and cess on the full ₹1 crore is roughly ₹13 lakh+, while tax on a ₹20 lakh long-term gain is around ₹2.6 lakh — leaving close to ₹10 lakh refundable. Figures are illustrative; confirm rates and surcharge for your sale.
Step by step to claim the refund
- Check the buyer has filed Form 27Q so the TDS appears in your Form 26AS / AIS.
- Compute your capital gain (long-term, held over 24 months, is taxed at 12.5% from 23 July 2024).
- File ITR-2 before the due date and report the gain and the TDS.
- Keep a validated Indian bank account (an NRO account works) for the refund.
The refund is paid with interest under Section 244A.
Better still: stop it being blocked
A refund can take months. The cleaner route is to apply before the sale for a lower TDS certificate under Section 197 using Form 13, so the buyer deducts only on your real gain. See the full NRI property sale & TDS guide, or our NRI property sale & repatriation service.