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NRI Capital Gains Tax on Property Sale in India

Selling immovable property in India as a Non-Resident Indian triggers capital gains tax obligations. Understanding holding periods (24 months for land/building), indexation, LTCG tax rates, and tax-saving exemptions under Section 54 and Section 54EC helps save significant tax legally.

Written & Reviewed By:Acharya Capital Gains Practice|Chartered Accountant (ICAI)

Last Updated: September 2026

Disclaimer: This content is for general informational purposes only and does not constitute personalized legal or financial advice. For specific tax filings or audits, consult our qualified accountants directly.

1. Short-Term vs Long-Term Capital Gains

• **Short-Term Capital Gain (STCG):** Held for 24 months or less. Taxed as per NRI's applicable income tax slab rates.

• **Long-Term Capital Gain (LTCG):** Held for more than 24 months. Taxed at 20% (plus surcharge and cess) with indexation benefit (or applicable revised provisions).

2. How NRIs Can Save LTCG Tax Legally

Section 54 Exemption:Reinvest net capital gains in buying or constructing another residential house in India within specified timelines.

Section 54EC Exemption (Capital Gain Bonds):Invest capital gains up to ₹50 Lakhs in notified NHAI / REC capital gain bonds within 6 months of sale. Lock-in period is 5 years.

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