The situation
Where the client started.
Dubai-based banker selling a ₹3.2 Cr Bengaluru flat held for 9 years.
Problem
What was at stake.
- Buyer's CA was poised to deduct TDS on the full sale consideration at 14.95% (12.5% LTCG plus 15% surcharge and 4% cess).
- That would have locked up several multiples of the actual tax until the next year's refund — unworkable for the client's onward UAE property purchase.
- Improvement costs and section 54/54EC options were not on the buyer-side CA's radar.
Approach
How we worked it.
- Computed long-term capital gain at 12.5% under the post-23 July 2024 regime (no indexation, in line with Finance Act 2024), including allowable improvement costs.
- Filed Form 13 with the jurisdictional AO requesting deduction on actual LTCG, not gross consideration.
- Coordinated buyer-side TDS posting + 26QB and 16B issuance.
- Routed proceeds via NRO with 15CA/CB; repatriated USD 1M under the FEMA cap.
Outcome
What changed.
- Section 197 certificate issued in 31 days.
- TDS withheld at 4.1% of consideration — matched final LTCG liability within 2%.
- Repatriation completed in the same FY — no refund cycle, no idle capital.
Takeaway
The principle behind it.
Default 14.95% TDS on NRI property LTCG is a working-capital trap, not a tax rate. Form 13 is non-optional for any sale above ~₹1 Cr.