Where do I start before selling my flat in India as an NRI?
With the certificate, and therefore with the cost history it depends on. The buyer must deduct tax computed on the whole sale consideration rather than on your gain, so unless something intervenes a large sum is withheld against a much smaller liability. A lower-deduction certificate obtained before closing sets the deduction at the real liability, and applying for it means proving what the flat cost and what was spent on it. That evidence is the first task. Everything else in the transaction, including the buyer's paperwork, the return and the remittance, is easier once it exists.
How early should I apply for a lower-deduction certificate?
Early enough that it is in the buyer's hands before completion, which in practice means starting well before you expect to sign. The certificate only does its job in advance, because its function is to fix what the buyer deducts. Afterwards the money sits with the Indian department until a return recovers it, which is the same destination reached slowly. Since the application depends on a supported cost history, and assembling that takes longer than people expect on a flat held for years, treat it as the first step of the sale rather than a parallel errand.
What does the buyer need from me before we sign?
Chiefly the certificate, if you have obtained one, because it is what authorises a deduction below the default. Without it the buyer is obliged to deduct on the whole consideration and will do so. He carries the exposure if he gets it wrong, so he will not take your word about your gain. Give him the document rather than an explanation. It is also worth telling the buyer's side early that a certificate is being sought, so the closing timetable accommodates it instead of forcing a deduction nobody intended.
Why is the tax deducted on the sale price and not on my gain?
Because the deduction is a collection mechanism, not a computation of your liability. The buyer is not in a position to verify what the flat cost you or what you spent improving it, so the obligation is set against the figure he does know, which is the consideration he is paying. On a long-held flat that produces a withholding far larger than the tax the transaction actually owes. The two ways to close the gap are a certificate before closing, which lowers the deduction to the real liability, and a return afterwards, which recovers the excess.
What happens if I sell first and ask the questions afterwards?
You end up on the slower route. The deduction has been taken on the whole consideration, so the excess is with the Indian department and only a return will bring it back. Meanwhile the proceeds themselves need their own certification before a bank will move them, which is a second piece of work nobody tends to raise during a sale. Nothing here is unrecoverable. It simply costs time, and leaves a substantial sum sitting in India while it runs. Asking the questions before closing turns two recovery exercises into one piece of preparation.
Do I need to plan the remittance before I sell the property?
It is worth doing, because the remittance is a separate step with its own document. Reducing or recovering the deduction settles the tax. Moving the proceeds out needs the remittance certified before a bank will act. Sellers routinely discover this after completion, with the money in an Indian account and the transaction team dispersed. Find out what your bank will require while the sale documents are being drawn up, and the certification can be prepared from the same papers rather than reconstructed from them months later.
Is the sale of foreign property taxable where I live?
For a resident, yes — worldwide gains are taxable, and the gain is computed in your own currency, so the exchange rate at purchase and at sale changes the number even when the local-currency price did not move. The country where the property sits usually taxes it too, often with a withholding or clearance step before closing, and that tax becomes a credit. A principal residence relief may apply to a home abroad on the same terms as one at home. See principal residence and foreign property.
What is TCS on foreign remittance?
Tax collected at source. When a resident individual remits money abroad under the Liberalised Remittance Scheme — or buys an overseas tour package — the bank or seller collects an amount of tax on top and deposits it against your PAN. It is not a cost and it is not a final tax: it appears in your annual tax statement and is set off against the tax on your return, with the excess refunded. The rates and the purposes they attach to have been amended repeatedly, so we confirm them for the remittance year. See LRS limits and TCS.
