Selling Property in India as an NRI – Step-by-Step Guide (TDS, FEMA & Fund Repatriation)

For most NRIs, selling property in India can feel overwhelming. Between taxation rules, FEMA/RBI compliance, and paperwork, many struggle to get their funds safely transferred abroad. The truth is, while the process is straightforward for Indian residents, NRIs face additional legal and tax obligations.

This guide breaks down the step-by-step process of selling property in India as an NRI, covering TDS, FEMA rules, NRO/NRE accounts, Form 15CB, and fund repatriation.

Step 1 – Know What Property You Can Sell as an NRI

As per FEMA guidelines, NRIs can sell:

• ✅ Residential property (apartment, villa, house).

• ✅ Commercial property (shops, offices, commercial plots).

• ✅ Agricultural land or farmhouses — only if inherited (NRIs cannot buy new agricultural land, but they may sell inherited ones to a resident Indian).

Step 2 – Understand TDS (Tax Deducted at Source) on Property Sale

• For NRIs, the buyer is legally required to deduct TDS before making payment.

• TDS rates:

  • 20% on long-term capital gains (property held for more than 2 years, with indexation).

  • 30% on short-term capital gains (property held for less than 2 years).

• Plus, surcharge and cess may apply, increasing the effective rate.

👉 Tip: NRIs can apply for a Lower TDS Certificate from the Income Tax Department if actual tax liability is lower than the default rate.

Step 3 – Manage Your NRO Account

Sale proceeds of property must be credited to an NRO account (Non-Resident Ordinary).

• NRE Account: Only for foreign earnings.

• NRO Account: For income generated in India (rent, property sale, dividends).

Funds from an NRO account can later be repatriated abroad with proper documentation.

Step 4 – Documentation Required for Fund Transfer Abroad

To repatriate sale proceeds, banks require:

1. Registered sale deed (proof of sale).

2. Undertaking letter from the seller.

3. Form 15CB (CA certificate certifying tax compliance).

4. Form 15CA (submitted online to the Income Tax Department).

5. NRO account details (in the seller’s name or a blood relative).

   
   

Step 5 – FEMA & RBI Compliance for Repatriation

• FEMA rules allow NRIs to repatriate up to USD 1 million per financial year (from an NRO account) including property sale proceeds, rent, or other income.

• Sale proceeds of up to two immovable properties can be repatriated abroad.

• Capital gains tax must be paid in India before repatriation is permitted.

Step 6 – Double Taxation Avoidance Agreement (DTAA)

NRIs often worry about being taxed twice – once in India and once in their country of residence.

• India has signed DTAA treaties with countries like the US, UK, Canada, UAE, and others.

• Under DTAA, you can claim tax credits in your country of residence for taxes already paid in India.

• Example: If you paid capital gains tax in India, you won’t be taxed again fully in the US — you can claim credit.

Step 7 – Gifting Funds to Children Abroad

A common question: If I sell my property and transfer the funds to my children abroad, is it taxed twice?

• In India: Gifts to blood relatives are not taxed.

• In the US: Gifting up to $5.6 million (lifetime exemption) is not taxable for the giver.

So, transferring funds to children abroad after a sale is tax-efficient and legally safe.

Step 8 – Power of Attorney (PoA) for NRIs

If you cannot be physically present in India to complete the sale, you can authorize a Power of Attorney (PoA) holder (relative or trusted representative) to:

• Sign the sale agreement.

• Complete registration at the sub-registrar’s office.

• Liaise with banks and buyers.

👉 Important: PoA must be notarized and attested by the Indian Embassy/Consulate in your country of residence.

Case Study - One of Kaptain Group clients

Mr. Rao, an NRI in California, wanted to sell his Hyderabad apartment. With Kaptain Group’s help:

• We arranged valuation and buyer screening.

• Ensured buyer deducted correct TDS.

• Obtained Form 15CB & 15CA.

• Managed repatriation of funds to his US bank.

Result: A smooth, transparent, and legally compliant sale — without Rao needing to fly down.

Final Thoughts

Selling property in India as an NRI is not complicated if handled correctly. The key is ensuring TDS compliance, FEMA/RBI approvals, and proper documentation for repatriation.

At Kaptain Group, we specialize in helping NRIs sell property stress-free — ensuring maximum value, complete legal compliance, and safe fund transfers abroad.

👉 Contact us today to make your property sale in India hassle-free and fully compliant.