NRI
Lower Deduction Certificate for NRIs (Form 13)
How NRIs cut 20%+ TDS on an Indian property sale using a lower deduction certificate under Section 397 in Form 13, with the valuation it rests on.
By ValuerDekho editorial team · Reviewed by Reviewing Chartered Accountant (to be named) · Updated 6 September 2026
What the certificate does
Under Section 397 of the Income-tax Act 2025 (formerly Section 197), the assessing officer for international taxation can direct the buyer to deduct tax at a lower or nil rate computed on the seller’s actual capital gain instead of on the full consideration. The seller applies in Form 13 on the TRACES portal.
Documents
- Agreement to sell with the buyer’s PAN and payment schedule.
- Seller’s PAN, passport, and proof of non-resident status.
- Title deed and acquisition evidence; for pre-2001 or inherited property, the registered valuer’s FMV 2001 or inheritance-date report in Form 170.
- Improvement bills with dates.
- Computation of capital gains and tax, including any reinvestment claim under Section 84 (formerly 54).
- Bank details (NRO account).
- Earlier returns if filed.
Timeline
Week 0: agreement signed; valuer engaged. Week 1: FMV report delivered. Week 2: Form 13 filed by the CA. Weeks 3 to 6: officer’s queries and certificate. The buyer then deducts at the certified rate and files Form 27Q.
Pitfalls
Filing without the valuer’s report (officers reject self-estimated costs); mismatched names between passport and deed; instalments paid before the certificate; a certificate that covers only part of the consideration; ignoring surcharge and cess in the computation.
After the certificate
Deduction at the certified rate, Form 16A from the buyer, credit in the NRO account, then repatriation with Forms 145/146. File the return to claim any remaining refund.
Frequently asked questions
How long does a lower-deduction certificate take?
Typically three to six weeks from a complete application; apply as soon as the agreement to sell is signed.
Can I apply after the sale deed?
No. The certificate must be in the buyer's hands before payment; after that the only remedy is a refund through the return.
Related guides
- Fair Market Value as on 1 April 2001 (FMV 2001)
- Forms 145 and 146: Repatriating Sale Proceeds
- TDS on NRI Property Sale: the 2026 Rules
Last reviewed 6 September 2026 by Reviewing Chartered Accountant (to be named). Regulatory references are to the Income-tax Act 2025 and Income-tax Rules 2026 (in force from 1 April 2026) with the former 1961-Act section numbers in brackets. This is general information, not tax or legal advice.