Selling your property in India while living abroad might sound complex, but with the right roadmap, it can be a smooth and rewarding journey.
From capital gains tax to FEMA rules and repatriation, this guide breaks down everything NRIs must know to sell property in India legally, tax-efficiently, and confidently.
1️⃣ Capital Gains Tax: What Every NRI Must Know
Understanding capital gains tax is step one when planning your sale.
🔹 Short-Term Capital Gains (STCG):
Property held < 24 months
Taxed at your slab rate
Buyer deducts 30% TDS
🔹 Long-Term Capital Gains (LTCG):
Property held > 24 months
Taxed at 20% with indexation
Buyer deducts 20% TDS
📌 Inherited Property?
The holding period is calculated from when the original owner bought it. You can use indexation from April 1, 2001 (or purchase date, whichever is later).
💡 Note: Surcharge and 4% cess are applicable on higher-value transactions.
2️⃣ TDS (Tax Deducted at Source): Don’t Ignore This!
As an NRI seller, TDS is deducted by the buyer before payment:
✔️ 30% TDS on STCG
✔️ 20% TDS on LTCG
✅ Provide your PAN – or TDS can go even higher
✅ Buyer must file Form 27Q and issue Form 16B to you
✅ You can apply for a Lower/Nil TDS Certificate (Sec 197) if actual tax liability is less — plan at least 30-40 days before sale
3️⃣ FEMA Guidelines: Selling Property the Right Way
Foreign Exchange Management Act (FEMA) compliance is non-negotiable:
🏡 You can sell property to:
Resident Indians
NRIs or OCIs (but not agricultural land/farmhouses)
📄 All transactions must go through authorized banking channels
📜 If abroad, issue a Power of Attorney (PoA):
Must be notarized and attested by the Indian Embassy
Stamped at Sub-Registrar in India
4️⃣ Repatriation: How to Bring Your Sale Proceeds Abroad
After the sale, funds typically go to your NRO account. Repatriation to your resident country involves:
💰 USD 1 Million/year repatriation limit (across all NRO remittances)
🧾 File Form 15CA and obtain Form 15CB (if amount > ₹5 lakh)
📌 Over USD 1M or inherited property? You may need RBI approval
5️⃣How to Save Tax: Exemptions for Smart NRIs
🏡 Section 54 – Reinvest in Property
Buy/construct another residential property
Up to 2 properties if gains ≤ ₹2 Cr
Timeline: Buy within 2 years or construct in 3 Years
🌐 DTAA Benefits – Avoid Double Tax
Claim credit in your country of residence
Get a Tax Residency Certificate (TRC) and file Form 10F in India
6️⃣ Final Tips: Process & Professional Help
✔️ Get your property valued
✔️ Market it effectively and verify the buyer
✔️ Use a property lawyer & NRI-specialized CA
✔️ Understand stamp duty & registration
✔️ Don’t skip legal due diligence
✅ In Conclusion
Selling property in India as an NRI is a high-stakes financial and legal event. But with the right compliance, expert help, and early planning, it doesn’t have to be stressful.
✨ Maximize your returns, minimize tax, and repatriate your funds with peace of mind.
💼 Team Wealth By Rule – The House of Financial Experts
📞 Call Us: 99049 33311
🌐 Visit: www.wealthbyrule.com
🧾 India’s Trusted Partner for NRI Taxation, Compliance & Wealth Guidance
