NRI Capital Gains Tax on Property: Rates and Reinvestment
Tax years beginning from 1 April 2026 use the Income-tax Act, 2025. Confirm the applicable Act, exemption conditions and current rate with your Chartered Accountant; headline capital-gains rates are not TDS instructions.
How your gain is taxed changed materially on 23 July 2024. For NRIs selling Indian property, getting this right — and using the exemptions — is where real money is saved.
Long-term vs short-term
Immovable property held for more than 24 months is a long-term capital asset. Under the 2024 regime, LTCG is taxed at 12.5% without indexation (plus surcharge and cess). Held 24 months or less, the gain is short-term and taxed at slab rates.
Three legal ways to cut the tax
| Route | What you reinvest | Into |
|---|---|---|
| Section 82 (formerly 54) | The capital gain | A qualifying house in India: purchase 1 year before or 2 years after transfer; construct within 3 years |
| Section 85 (formerly 54EC) | The gain, up to ₹50 lakh | Eligible specified bonds within 6 months; ₹50 lakh aggregate limit and 5-year conditions |
| Section 86 (formerly 54F) | The net sale consideration | A residential house (when selling a non-house asset) |
The CGAS safety net
For house-reinvestment relief, deposit the eligible unused amount in CGAS before filing the return and no later than the applicable statutory return due date. Under section 82 this is section 263(1); the earlier section 54 rule used section 139(1). A belated return does not extend the deposit deadline.
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FAQs
What is the capital gains tax rate for NRIs on property in 2026?
Long-term gains (property held over 24 months) are taxed at 12.5% without indexation under the 2024 regime, plus surcharge and cess. Short-term gains are taxed at slab rates.
Can NRIs claim Section 82 (formerly 54) exemption?
Yes — NRIs can claim sections 82, 85 and 86 (formerly 54, 54EC and 54F) on Indian property gains, subject to the same conditions and time windows as residents.
What is the 54EC bond limit?
The specified-bond route has a ₹50 lakh aggregate investment limit, a six-month investment window and five-year conditions. Confirm the bond is eligible before investing.
What if I can't reinvest before filing my return?
Make any required CGAS deposit before filing and no later than the applicable statutory due date; complete the qualifying reinvestment within its prescribed period.
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Sources checked 8 October 2026: Income-tax Act, 2025, amended in 2026