Written by: Paras Nagpal, Business Consultant, GetMyCA
Reviewed by: GetMyCA Tax Team
Last Updated: 13 July 2026
Reading Time: 8 minutes
Quick Answer: Are capital gains taxable for NRIs in India?
Yes. Capital gains from the sale or transfer of Indian assets may be taxable in India for NRIs. This can include capital gains from Indian property, listed shares, mutual funds, bonds or other capital assets.
The correct tax treatment depends on the asset type, holding period, purchase cost, sale value, applicable deductions or exemptions, TDS credit, AIS/Form 26AS entries and the ITR form selected before filing.
Who does this apply to?
This guide is relevant for NRIs who have sold or transferred Indian capital assets during the financial year. It may apply where an NRI sells property in India, redeems Indian mutual funds, sells Indian shares or receives gains from another Indian capital asset.
It is also useful where TDS has been deducted on a property sale or where capital gains transactions appear in AIS/Form 26AS.
What assets can create capital gains for NRIs?
NRIs should review capital gains whenever there is a sale, transfer or redemption of capital assets such as:
- Indian residential or commercial property
- Land or inherited property in India
- Listed equity shares
- Mutual funds
- Bonds or other securities
- Other capital assets, depending on the facts
Capital gains are generally reviewed under the capital gains provisions when profits or gains arise from transfer of a capital asset. The charging and computation framework for capital gains is covered under the Income-tax Act provisions such as Section 45 and Section 48.
NRI Capital Gains Asset Review Table
Use this high-level table to keep the review focused on capital gains documents and portal matching. Exact tax treatment should still be checked based on the asset type, dates and applicable provisions.
| Asset Type |
What to Review |
Documents to Match |
AIS/Form 26AS Check |
| Property |
Sale value, purchase cost, ownership share and TDS credit |
Sale deed, purchase deed, improvement proof and TDS proof |
Property sale and TDS entries |
| Shares |
Purchase date, sale date, quantity, sale value and cost |
Broker statement, demat statement and capital gains statement |
Securities transaction entries |
| Mutual Funds |
Redemption value, cost, asset type and capital gains statement |
Mutual fund statement and capital gains report |
Mutual fund or AIS reporting entries |
Short-term vs long-term capital gains: basic review
Capital gains are usually reviewed as short-term or long-term depending on the type of asset and the holding period. This classification matters because computation method, tax treatment and exemption review can differ.
For NRIs, the holding period should be checked separately for each asset type. A property sale, listed share sale and mutual fund redemption may not follow the same review pattern. The purchase date, sale date, asset type and supporting documents should be checked before finalizing the ITR.
How should NRIs review capital gains when selling Indian property?
When an NRI sells Indian property, the capital gains review usually starts with:
- Sale consideration as per sale deed
- Purchase cost and date of acquisition
- Cost of improvement, if any
- Holding period
- Ownership share, in case of joint ownership
- TDS deducted by the buyer, if applicable
- AIS/Form 26AS reporting
- Exemption review, where applicable
The computation framework under capital gains generally considers full value of consideration, transfer-related expenditure, cost of acquisition and cost of improvement. The exact computation should be reviewed with the relevant Income-tax Act provisions and transaction documents, including Section 45 and Section 48.
How should NRIs review capital gains on shares and mutual funds?
NRIs selling Indian shares or redeeming Indian mutual funds should review transaction statements carefully. Broker reports, capital gains statements, demat statements and mutual fund statements should be matched with AIS/Form 26AS.
Important checks include:
- Purchase and sale dates
- Quantity sold or redeemed
- Sale value
- Cost of acquisition
- Type of asset
- STCG/LTCG classification
- Securities or mutual fund reporting in AIS
- TDS or tax reporting, if any
For shares or debentures of an Indian company held by a non-resident, Section 48 contains specific computation language, so transaction-level review is important.
TDS on Sale of Property by NRI: What Should Be Checked?
When an NRI sells Indian property, TDS may apply depending on the facts and applicable provisions. The seller should check whether TDS appears in Form 26AS/AIS and whether the TDS credit is correctly considered while filing the return.
The NRI should review:
- Whether TDS was deducted by the buyer
- Whether Form 16A or related TDS proof is available
- Whether the TDS amount appears in Form 26AS
- Whether AIS shows the property transaction
- Whether the TDS credit matches the return computation
This section is only for capital gains review. For detailed refund-focused guidance, read our guide on NRI TDS Refund in India.
Section 195 provides the broad TDS framework for payments to non-residents, but the exact deduction position should be checked based on the transaction facts.
AIS and Form 26AS checks for capital gains
Before filing ITR, NRIs should review AIS and Form 26AS for capital gains-related entries. This helps identify mismatches before filing.
Check the following:
- Property sale or high-value transaction reporting
- Share and mutual fund transaction information
- TDS entries
- SFT information
- Demand/refund information, where relevant
- Difference between broker statements, sale deeds and portal data
The Income Tax Department Non-Resident Individual page states that Form 16A captures TDS on income other than salary, Form 26AS reflects tax deducted/collected at source, and AIS includes TDS/TCS, SFT information, tax payments and demand/refund information.
NRI Capital Gains Review Checklist
Before filing ITR for capital gains, NRIs should check:
- Whether the asset type is correctly identified
- Whether purchase date and sale date are available
- Whether sale consideration matches sale deed, broker statement or mutual fund statement
- Whether cost of acquisition and improvement records are available
- Whether holding period has been reviewed for the specific asset
- Whether TDS credit appears correctly in Form 26AS
- Whether capital gains entries in AIS match transaction documents
- Whether exemption eligibility, if any, has been reviewed with supporting proof
- Whether the applicable ITR form has been checked before filing
This checklist helps NRIs avoid wrong classification, missed TDS credit, document mismatch and incomplete capital gains reporting.
Documents required for NRI capital gains review
The following documents are generally useful for reviewing NRI capital gains:
- Sale deed or transfer deed
- Purchase deed or acquisition proof
- Cost of improvement proof, if any
- Valuation report, if applicable
- Broker statement or capital gains statement
- Demat statement
- Mutual fund capital gains statement
- Form 16A or TDS certificate, if available
- AIS and Form 26AS
- Bank statement showing sale consideration
- Proof of ownership share in case of joint ownership
This is a capital gains-specific list. For a complete NRI ITR document checklist, a separate document-focused guide should be used.
Common mistakes NRIs make with capital gains reporting
NRIs commonly make these mistakes:
- Ignoring capital gains because sale proceeds were received outside India
- Not matching property sale or securities transactions with AIS/Form 26AS
- Using incorrect purchase cost or improvement cost
- Missing TDS credit in the ITR
- Treating property sale income like rental income
- Not checking holding period before classifying gains
- Not reviewing exemption eligibility properly
- Selecting the ITR form without checking all income heads
How capital gains affect ITR filing
For many NRIs with capital gains and no business or professional income, ITR-2 is generally checked. If business or professional income also exists, ITR-3 may need review.
For detailed form selection, read our guide on ITR-2 vs ITR-3 for NRIs.
The Income Tax Department Non-Resident Individual page states that ITR-2 applies to individuals, resident or non-resident, having income under any head other than business/profession, while ITR-3 applies where business/profession income is also involved.
How GetMyCA reviews NRI capital gains before filing
GetMyCA reviews sale documents, purchase cost records, asset type, holding period, capital gains statements, TDS records, AIS/Form 26AS entries and the applicable ITR form before filing support is provided.
The review focuses on correct classification, document matching, TDS credit review, eligible claim review and proper reporting of capital gains in the return.
Need help reviewing your capital gains before NRI ITR filing? Visit our NRI ITR Filing in India page.
Author and Review Note
This article has been prepared by Paras Nagpal, Business Consultant at GetMyCA, and reviewed by the GetMyCA Tax & Compliance Team for source alignment, tax-topic accuracy and safe compliance wording.
GetMyCA recommends that NRI capital gains should be reviewed with transaction documents, purchase cost proof, TDS records, AIS/Form 26AS, capital gains statements and applicable Income Tax Act provisions before filing.
Frequently Asked Questions
Q: Are capital gains taxable for NRIs in India?
Yes, capital gains from the sale or transfer of Indian assets may be taxable in India for NRIs, depending on the asset type, holding period and applicable provisions.
Q: What assets can create capital gains for NRIs?
Indian property, land, shares, mutual funds, bonds, securities and other capital assets may create capital gains for NRIs when sold, transferred or redeemed.
Q: Is sale of Indian property by an NRI taxable in India?
Yes, sale of Indian property by an NRI may result in capital gains taxable in India. The gain should be reviewed with sale deed, purchase cost, holding period, TDS records and AIS/Form 26AS.
Q: Does TDS apply on sale of property by NRI?
TDS may apply when an NRI sells Indian property, depending on the facts and applicable provisions. The seller should check Form 26AS/AIS and TDS proof before filing ITR.
Q: How should NRIs check capital gains in AIS/Form 26AS?
NRIs should compare AIS/Form 26AS with sale deeds, broker statements, mutual fund statements, TDS certificates and bank credits before filing the return.
Q: What documents are needed for NRI capital gains review?
Sale deed, purchase proof, improvement cost proof, broker or mutual fund capital gains statement, Form 16A, AIS/Form 26AS and bank statement are generally useful.
Q: Which ITR form is generally checked for NRI capital gains?
For many NRIs with capital gains and no business or professional income, ITR-2 is generally checked. If business or professional income exists, ITR-3 may need review.
Q: Can excess TDS on capital gains be claimed as refund?
Yes, if TDS deducted is higher than the final tax liability, the excess may be claimed as refund by filing the correct ITR, subject to verification and applicable provisions.
Sources
- Income Tax Department - Non-Resident Individual for AY 2026-27
- Income Tax Department - File ITR-2 Online FAQs
- India Code - Income-tax Act, 1961: Section 45 and Section 48 for capital gains charge and computation framework
- India Code - Income-tax Act, 1961: Section 195 for payments to non-residents, where applicable
- India Code - Income-tax Act, 1961: Section 112 / 112A for capital gains rate review where applicable
- India Code - Income-tax Act, 1961: Section 54, 54EC and 54F for exemption review, where applicable
About the Author
Paras Nagpal
Business Consultant, GetMyCA
Email: paras@getmyca.com | Phone: +91 92174 87001
Disclaimer: This content is for educational purposes only. It is not personalized tax advice. Capital gains taxability, TDS treatment, exemption eligibility and ITR filing depend on asset type, residential status, transaction facts and applicable provisions. Please consult a qualified tax professional before filing or making any tax decision.
About GetMyCA
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