How an NRI can repatriate money after selling property in India

How Repatriation Works When an NRI Sells Property in India

Repatriating the proceeds from a property sale in India follows a set sequence under FEMA (Foreign Exchange Management Act) and the Income Tax Act. The process begins with the sale transaction and concludes when the funds are credited to the NRI overseas account. Depending on how quickly each step is completed, the timeline typically ranges from four to twelve weeks.

The repatriation steps for an NRI are as follows.

Step 1, TDS Deduction by the Buyer

The buyer deducts TDS from the sale amount at the applicable NRI rate, which is detailed in the rates section below. They deposit it using Form 27Q with the Income Tax department. The buyer must have a TAN (Tax Deduction Account Number) to complete this filing. However, from 1 October 2026, the new Income Tax Rules 2026 will remove this TAN requirement for individual and HUF buyers in NRI seller transactions. Until then, TAN remains mandatory.

Step 2, NRO Account Credit

The net sale proceeds, after TDS, are credited to the NRI seller NRO (Non-Resident Ordinary) account by the buyer or through the registrar process.

Step 3, CA Certifies Form 15CB

The NRI chartered accountant certifies the capital gains calculation and files Form 15CB, confirming that TDS has been properly deducted and repatriation is allowed.

Step 4, Form 15CA Filing

The NRI (or their authorised representative in India) files Form 15CA on the Income Tax portal, self-declaring the nature of the remittance.

Step 5, Bank Remittance

The bank processes the remittance from the NRO account to the NRI NRE account or directly to their overseas bank account via SWIFT after receiving Form 15CA and Form 15CB.

A critical requirement is that sale proceeds must first go into an NRO account, not directly into an NRE account or overseas. The NRO account is the necessary intermediate holding point. Any attempt to transfer funds directly from the sale proceeds to a foreign account without following this sequence is non-compliant under FEMA and will be rejected by the bank.

Also Read: How an NRI Can Buy and Take Possession of a Flat in India Remotely

Repatriation Limits and the Role of the NRO Account

The annual repatriation limit for an NRI from their NRO account is USD 1 million per financial year (April to March), including all sources such as property sale proceeds, rental income, dividends, and other credits to the NRO account. This limit is set by the Reserve Bank of India under FEMA regulations (the USD 1 million NRO repatriation scheme). It is a per-person limit, not per transaction. An NRI selling a property worth 5 crore (around USD 600,000 at current rates) can repatriate the full proceeds within a single financial year if the net amount does not exceed the USD 1 million limit.

The NRO account repatriation limit may be a problem for high-value properties. For example, an NRI selling a flat at Piramal Mahalaxmi in South Mumbai, where transaction values often exceed 5 crore, needs to consider the timing of repatriation in relation to their financial year. If net proceeds surpass USD 1 million, the excess will carry over to the next financial year. The NRO account itself has no limit on inflows. The USD 1 million cap only applies to outward remittances per year.

TDS on Sale of Property by an NRI, Rates and Mechanics

TDS on the sale of property by an NRI follows Section 195 of the Income Tax Act, not Section 194IA (which applies to resident sellers). This distinction is important because Section 195 has much higher TDS rates than the 1 per cent that applies to resident sellers. The buyer, whether resident or NRI, is responsible for deducting TDS and depositing it using Form 27Q (for NRI sellers, not Form 26QB).

The TDS rate for property sale by an NRI on LTCG is 12.5 per cent of the total sale price, not 12.5 per cent of just the gains. For a 3 crore property bought for 80 lakh, TDS is applicable on the full 3 crore. The actual tax obligation is lower, which is why the lower TDS certificate for NRIs exists. It matches the TDS to the actual gain rather than the gross sale amount.

Also Read: A Complete Guide to TDS on Flat Purchases in Mumbai in 2026

How NRIs Can Reduce TDS and Capital Gains Tax on a Property Sale

The most effective way for an NRI to reduce TDS on a property sale is by obtaining a lower TDS certificate (Section 197 application). The NRI, or their authorised CA, submits an application to the Assessing Officer (AO) of the Income Tax Department before the sale is finalised. The AO reviews the actual capital gains, factoring in indexation, acquisition costs, improvement costs, and any exemptions available. The AO then issues a certificate that allows for a lower TDS rate. This lower TDS certificate can reduce the TDS rate from the full 12.5 to 30 per cent range to a level that matches the actual tax liability. In some cases, it can even be close to zero for NRIs eligible for exemptions under Sections 54 or 54F.

The capital gains exemptions available to NRIs are the same as those for residents.

Section 54

Applicable when selling a residential house. Reinvest capital gains (not total proceeds) in one new residential property in India within 2 years of sale (or 3 years if it is under construction). LTCG is exempt up to 10 crore.

Section 54F

Reinvest the entire sale amount in one residential property in India. The entire LTCG is exempt up to 10 crore. This is especially relevant for NRIs selling non-residential assets.

Section 54EC

Invest up to 50 lakh per financial year in NHAI or REC bonds within 6 months of sale to protect that part of the gains.

NRIs planning to buy a reinvestment property at Piramal Revanta in Mulund, Piramal Aranya in Byculla, or Piramal Vaikunth in Thane to qualify for a Section 54 or 54F exemption should remember that the new property must be located in India and must not be sold within 3 years to maintain the exemption.

Form 15CA and Form 15CB Explained for NRIs

Form 15CA and Form 15CB are two compliance documents that allow the bank to approve the transfer of funds abroad. These forms are necessary for any taxable outward remittance. Specifically, you need Form 15CB (the CA certificate) when the total remittance exceeds 5 lakh in a financial year. For remittances up to 5 lakh, only Form 15CA Part A is required. For amounts over 5 lakh, which is almost always the case in property sales, both Form 15CA Part C and Form 15CB are necessary.

Form 15CB is a certificate from a chartered accountant. The CA reviews the type of remittance, confirms that the appropriate TDS has been deducted and paid, and certifies that the repatriation follows FEMA and the Income Tax Act. This form is prepared first, before Form 15CA is filed, because Form 15CA depends on the details in Form 15CB. For property sale proceeds, Form 15CB is required regardless of the amount being remitted.

Form 15CA is a self-declaration completed by the NRI remitter (or their authorised representative) on the Income Tax e-filing portal before the remittance takes place. It details the nature of the transaction, the amount, applicable tax regulations, and references the Form 15CB certificate number. Once submitted, Form 15CA generates an acknowledgement number that the bank needs along with Form 15CB to process the remittance.

Under the Income Tax Act 2025, Form 15CA will be renamed Form 145, and Form 15CB will become Form 146, starting from FY 2026-27. Until that time, the current form numbers will still be in use. Check the current form numbers and availability on incometax.gov.in when you file.

Repatriation Rules for NRI Selling Inherited Property and the Full Documents Timeline

An NRI selling inherited property in India follows the same repatriation rules as a regular sale. However, there is one key difference: inheritance must be legally established through a Will, a probate order, or a legal heirship certificate. TDS on the sale of property by an NRI applies the same way. The buyer must deduct Section 195 TDS, regardless of how the NRI obtained the property.

One specific rule states that if the original owner was a resident Indian, the total holding period of the original owner and the NRI heir is counted. Inherited properties typically qualify for LTCG treatment at 12.5 per cent, rather than the 30 per cent STCG rate. The documents required for an NRI to sell property in India are more extensive for inherited property. A Will or succession certificate, proof of inheritance, and the original acquisition cost documentation must all be submitted to the CA calculating capital gains.

Typical end-to-end timeline is 6 to 14 weeks from sale registration to crediting funds overseas. This timeline depends on CA availability, the AO processing of a lower TDS certificate (if applied), and bank processing times.

For an NRI selling property in India, compliance with TDS, Form 15CB, Form 15CA, NRO routing, and bank remittance is essential. The consequences of skipping this process, like blocked remittances, tax notices, and interest on short-deducted TDS, far outweigh the cost of hiring a qualified CA. If you are an NRI considering selling your existing property to buy a new one at a Piramal project in Mumbai or Thane, Piramal Realty can connect you with advisors who manage the full NRI transaction and repatriation process.

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