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Quick answer: if a buyer or tenant deducted more tax from your payments than you finally owe, you claim the difference back by filing an Indian income tax return. First you need to see the deducted tax in your tax statement, since the credit appears only after the person who deducted it has filed their return and reported your PAN. This guide shows where to check, what to do when the tax is missing, how the claim works and how refund interest is described.
This is general information and not tax advice. The Income-tax Act, 2025 and the Income-tax Rules, 2026 apply from 1 April 2026, and form names and procedures are still settling. Several points below come from secondary sources and should be checked on the income tax e-filing portal or with a chartered accountant. This guide is independent and has not been reviewed by a lawyer or a chartered accountant.
Why a refund happens
When an NRI sells a flat, the buyer deducts tax from the payments, and the deduction can be on the whole sale price and not only on your gain. Rent paid to an NRI landlord is also taxed at source. If your actual tax for the year is smaller, the extra deduction stays with the department until you claim it. The NRI property-sale TDS guide and the guide to TDS on rent paid to an NRI landlord explain the deduction. A lower deduction certificate reduces the withholding in advance. See the guide to the lower TDS certificate (Form 128). Without one, the refund route is the way back.
Step 1: check the tax is in your statement
- The annual tax credit statement was Form 26AS. The department describes Form 168 as replacing it from tax year 2026-27, and it is viewed on the e-filing portal and not on TRACES (see the department’s page and a secondary explainer). Form 26AS stays relevant for earlier years.
- Whether Form 168 absorbs the Annual Information Statement is described differently by different sources. Check both Form 168 and your AIS on the portal.
- Terminology has changed. The 2025 Act speaks of a tax year, so the year starting 1 April 2026 is tax year 2026-27, where the older law said financial year and assessment year.
- Match each entry to your papers: the buyer’s name and PAN, the date of payment, the amount of tax and the challan.
Step 2: get the buyer’s proof
Ask the buyer for the TDS certificate and the proof of deposit. Under the 2026 forms, the certificate for non-salary deductions is reported as Form 131, which replaces Form 16A (see this note). The buyer’s quarterly statement is reported as Form 144, and some sources describe a PAN based route for certain individual buyers using Form 141, Schedule E from 1 October 2026 (see this explainer). The forms and dates are described differently across sources, so ask the buyer’s accountant which one applies to your payments. Do not rely on the form name alone. Rely on the challan details and the amount.
If the tax does not show up
The credit shows only after the buyer files their statement and the details match your PAN. If it is missing:
- Check that the buyer quoted your PAN correctly on every payment. A wrong digit is the most common cause.
- Ask the buyer or their accountant whether the statement for that period has been filed, and request a correction if the PAN or amount is wrong.
- Keep the challan, the certificate and your bank statements. They support your claim.
- If the buyer will not respond, ask your chartered accountant about raising it with the jurisdictional tax officer. Do not claim credit for tax that does not appear in your statement without advice.
Step 3: claim the refund through your return
- The refund is claimed by filing a return. An NRI with property or rental income usually uses ITR-2, since ITR-1 and ITR-4 are generally not available to non-residents (see this explainer).
- Report the sale, the capital gain and any exemption you qualify for, and claim credit for the tax deducted. See the NRI income tax return guide and the step by step guide to selling your flat as an NRI.
- Check the due date for tax year 2026-27 on the e-filing portal. We have not confirmed a date that applies to NRIs.
- Verify the return electronically. Confirm with the portal which methods work from abroad.
- Make sure the refund can reach a bank account. Ask your accountant which of your accounts can be used. See the guide to opening an NRI bank account.
Refund interest
Secondary sources describe interest on refunds under section 437 of the 2025 Act as simple interest at 0.5% a month or part of a month, running from 1 April 2026 for a return filed on time and otherwise from the date of filing, with none payable on a refund below 10% of the tax (see this explainer and Angel One). Treat that as a summary and check the Act.
If you want to avoid the wait
| Situation | What can help |
|---|---|
| Sale where tax on the whole price exceeds your tax | Apply for a lower or nil certificate before the buyer pays. See the guide to the lower TDS certificate (Form 128). |
| Rent from a flat | Ask your accountant whether a lower deduction certificate or a different structure suits you. See the guide to TDS on rent paid to an NRI landlord. |
| Excess already deducted | File the return and claim the refund. |
Forms 15G and 15H are generally not available to NRIs, so they are not a way around the deduction.
Tax paid abroad
If you also pay tax in your country of residence on the same income, a foreign tax credit may be available, and a double tax avoidance agreement can matter. The form and rules for claiming it have been renumbered under the new Act, so ask your accountant for the current form before you file. This guide does not cover foreign tax credit in detail. After a refund or a sale, see the guide to sending property sale proceeds abroad for sending the money abroad.
Mistakes to avoid
- Filing the return before the tax shows in your statement, then getting a mismatch notice.
- Claiming more credit than your statement shows.
- Losing the buyer’s details after closing, when they are hardest to trace.
- Assuming a lower deduction certificate or a refund reduces your final tax. Both only decide how much is held back or returned.
- Treating Form 26AS as current for tax year 2026-27.
For the buyer’s side, see the guide for buyers paying tax on a purchase from an NRI.
Frequently Asked Questions
How do I check TDS deducted on my property sale?
Look at your tax credit statement on the e-filing portal. The department describes Form 168 as the statement from tax year 2026-27, with Form 26AS for earlier years. Also check your AIS, and compare each entry with the buyer’s challan.
Why is the buyer’s TDS not showing in my statement?
The credit appears only after the buyer files their statement and the PAN and amounts match. Ask the buyer to check the PAN and file or correct the statement.
How do I claim a refund of excess TDS as an NRI?
File an Indian income tax return, usually ITR-2 for an NRI with property income, report the sale and claim credit for the tax deducted. The refund is paid to your bank account if the return is verified and processed.
Is there interest on a tax refund?
Secondary sources describe simple interest at 0.5% a month under section 437 of the 2025 Act, with conditions. Check the Act or ask your accountant.
Can I avoid the refund wait?
A lower or nil deduction certificate, applied for before the sale payments, reduces the withholding. It does not reduce your final tax.
Can an NRI use Form 15G or 15H?
Generally no. They are not available to non-residents.
Which TDS certificate form applies now?
Sources report Form 131 for non-salary deductions from 1 April 2026, in place of Form 16A. Ask the buyer’s accountant which certificate applies to your payments.
Sources
| Point | Source |
|---|---|
| Form 168 and tax statements | Income Tax Department and Reconscribe |
| TDS certificate and buyer statement forms | TaxFetch and CA Alok Kumar |
| Refund and interest | EzTax and Angel One |
| Return form for NRIs | NRI Information |
| Filing portal and TRACES | e-filing portal and TRACES |
Reviewed on 29 October 2026. Check the form names, the buyer reporting route, the due date for tax year 2026-27, the refund interest rule and the foreign tax credit form on the e-filing portal or with a chartered accountant before you rely on them. This guide has not been reviewed by a lawyer or a chartered accountant.
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