No, Applicable tax is required to be paid on the Capital Gain only which is further bifurcated as long term and short term
Long-term Capital Gain: Property held for more than 2 years Short-term Capital Gain: Property held for less than 2 years

• The TDS on sale of property by NRI is required to be deducted under Section 195
• The seller shall file an application in Form 13 with the Income Tax Dept to obtain No/Lower TDS certificate which needs to be given to the buyer for deducting the exact TDS. In case this certificate is not obtained by the seller from the Income Tax Department, the TDS should be deducted on the Total Sale Price and not on the Capital Gains. Therefore, it is very important for the seller to obtain this certificate from the Income Tax Officer.
• Also, what is important to know is that the buyer must have a TAN no to be able to buy a property from an NRI. Do note that PAN number is different than TAN number.
• If the buyer is buying a property jointly with someone; both must have separate TAN numbers even if they are from the same family.
• The TDS so deducted by the buyer shall be deposited with the Income Tax Dept within 7 days from the end of the month in which the TDS has been deducted
• This TDS is required to be deposited along with Challan No./ ITNS 281
• This TDS is required to be deposited along with Challan No./ ITNS 281 and can be deposited online as well as through various bank branches.
• After the deposit of TDS, the buyer is required to furnish a TDS Return.
• This TDS Return is required to be furnished in Form 27Q and is required to be furnished separately for each quarter in which the TDS has been deducted.
• This TDS Return is required to be deposited within 31 days from the end of the quarter in which the TDS has been deducted
• After the deposit of TDS and filing of TDS Return, the buyer is also required to furnish Form to the seller of property.

Effective TDS rate for Long-term Capital gains

• Less than INR 50 Lacs: 20.8%
• INR 50 Lacs – INR 1 Crore: 22.88%
• Above INR 1 Crore: 23.92%

Effective TDS rate for Short-term Capital gains

• Flat rate: 30%

Effective TDS rate for Resident Indians

• Flat rate: 1%

To reduce the TDS on Sale of Property by NRI, the NRI is required to file an application in Form 13 with the Income Tax Department for issuance of Certificate for Lower/No Deduction of TDS.
In absence of this certificate which is attested by the Income tax Officer, TDS gets deducted on the Total Sale Price of the property and not only on the Capital Gains. This Certificate hence helps the NRI’s in largely reducing the TDS Liability and therefore, most NRI’s opt for this certificate.

NRIs can open three main types of accounts: Non-Resident External (NRE), Non-Resident Ordinary (NRO), and Foreign Currency Non-Resident (FCNR) accounts. Each serves different purposes related to repatriation, income management, and currency holding.

NRE accounts are used to park foreign earnings and offer full repatriability with tax-free interest in India. NRO accounts are meant to manage income earned in India (like rent or dividends) with limited repatriability and taxable interest.

Yes, NRIs can remit funds freely from their NRE and FCNR accounts. However, repatriation from NRO accounts is subject to a limit of USD 1 million per financial year, and must comply with tax and regulatory guidelines.

To open an NRI account, you typically need a valid passport, visa/residence permit, proof of overseas address, PAN card or Form 60, and passport-sized photographs. Additional KYC documents may be required as per bank policies.

The 20% outward remittance tax, also known as Tax Collected at Source (TCS), was introduced in India's Union Budget 2023. Here are the key points:

• Applicability: This tax applies to most foreign remittances made by Indian residents and Non-Resident Indians (NRIs) under the Liberalized Remittance Scheme (LRS).
• Threshold: A 20% TCS is deducted on foreign remittances over Rs. 7 lakhs.
• Purpose: It covers remittances for investments, purchase of foreign assets, gifting money abroad, etc.
• Exceptions: Remittances for medical treatment and education expenses abroad have lower TCS rates.
• Collection: TCS is collected by banks/authorized dealers at the time of remittance.
• Tax Credit: NRIs can claim the TCS paid as a tax credit.

This tax adds an extra burden on large foreign remittances by NRIs under the LRS, but remittances from NRO/FCNR accounts are exempt when done through The Remittor Process.              

TCS Rates:

• 20% on foreign remittances over Rs. 7 lakhs (except education and medical)
• 5% on remittances for overseas tour packages (no threshold)
• 5% on education remittances over Rs. 7 lakhs (non-loan case)
• 0.5% on education loan remittances over Rs. 7 lakhs

Calculation MethodL

• Calculate the amount exceeding the threshold limit (if any) for the transaction type.
• For example, if an NRI remits Rs. 10 lakhs under LRS (non-education/medical), 20% TCS applies on Rs. 3 lakhs (Rs. 10 lakhs - Rs. 7 lakhs threshold).

TCS Amount = (Remittance Amount exceeding threshold) x Applicable TCS Rate

• For Rs. 10 lakhs, TCS amount = Rs. 3 lakhs x 20% = Rs. 60,000

The TCS is deducted upfront by the authorized dealer (bank) before transferring funds. For remittances without a threshold limit, like overseas tour packages, the TCS rate applies to the full amount.

Remittor is a wealth transfer platform for Global Indians, ensuring compliance management for transactions. The Remittor Process helps you transfer wealth globally without losing money to unnecessary taxes. Our services include:

• Transaction advisory
• Integrated banking services
• Competitive remittance rates up to INR 8 crores
• Compliance management to avoid the 20% TCS

Yes, as a registered remittance agency, our partners hold an FFMC license for currency conversion, and all transactions are processed through RBI-authorized partners.

NRIs can open three main types of accounts: Non-Resident External (NRE), Non-Resident Ordinary (NRO), and Foreign Currency Non-Resident (FCNR) accounts. Each serves different purposes related to repatriation, income management, and currency holding.

NRE accounts are used to park foreign earnings and offer full repatriability with tax-free interest in India. NRO accounts are meant to manage income earned in India (like rent or dividends) with limited repatriability and taxable interest.

Yes, NRIs can remit funds freely from their NRE and FCNR accounts. However, repatriation from NRO accounts is subject to a limit of USD 1 million per financial year, and must comply with tax and regulatory guidelines.

To open an NRI account, you typically need a valid passport, visa/residence permit, proof of overseas address, PAN card or Form 60, and passport-sized photographs. Additional KYC documents may be required as per bank policies.

Interest earned on NRE and FCNR accounts is exempt from Indian income tax. However, interest from NRO accounts is taxable, and banks deduct Tax Deducted at Source (TDS) on such interest payments.