Selling property in India as NRI sounds easy from far away. You find a buyer, sign the papers and wait for the money. In real life, three things trip people up. The first is tax on your profit. The second is the TDS the buyer cuts from your payment. The third is the rule for sending the money to your foreign bank account.
This guide covers all three in plain language. Tax rules have changed a lot in the last two years. The new Income-tax Act 2025 has also applied since 1 April 2026, and some section numbers have changed. Use this guide to plan. Then confirm the final numbers with a chartered accountant.
You can also browse more family and money guides for Indians abroad on the DeshSansaar blog.
Who Counts as an NRI When You Sell?
For tax, your status depends on how many days you spent in India in the year of sale and in the years before it. A foreign passport or years abroad do not decide it alone. If you spend enough days in India in a year, you can become a resident for that year.
This matters because status changes almost everything. It sets the TDS rate, the bank account you use and the limit on sending money out. Count your days before you sign the sale agreement. If the number is close to the cut-off, ask a tax professional to confirm it. OCI cardholders and persons of Indian origin usually follow the same property rules as NRIs, but check your own case.
Can an NRI Sell Property in India Without RBI Approval?
For most property, yes. You can sell a flat, house, shop or plot without asking the Reserve Bank of India for permission. One big exception exists. Agricultural land, a farmhouse or a plantation can be sold only to a resident Indian citizen.
A residential or commercial property can go to a resident Indian, another NRI or an OCI cardholder. The buyer must pay through normal banking channels. Cash deals can cause serious tax and legal trouble for both sides.
Step-by-Step Process for Selling Property in India as NRI
1. Check Your Property Papers
Start with the title deed, the mutation records and the latest property tax receipts. Get a fresh encumbrance certificate. If a home loan is running, ask the bank how to close it and release the original papers. Housing society owners should also request a no-objection letter and a no-dues certificate.
2. Set a Fair Price
Check recent sales in your area and talk to two or three local brokers. Also look up the government circle rate. If you sell far below it, the tax office may use the circle rate to value the deal. That can raise your taxable gain.
3. Decide How You Will Sign
You can fly in and sign yourself. Or you can give a Power of Attorney to a trusted person. A Power of Attorney signed abroad usually needs notary attestation and legal stamping as per the rules of your country. Keep the powers narrow. Allow your agent to sign the sale deed and receive documents, but not to move the money anywhere other than your own NRO account.
4. Apply for a Lower TDS Certificate
Do this before the sale, not after. We explain how it works in the TDS section below.
5. Sign the Agreement and Register the Sale
Once the price is agreed, sign the sale agreement and register the sale deed at the sub-registrar office. Pay or confirm stamp duty as per your state rules. Make sure the deed lists the full sale price.
6. Receive Payment in Your NRO Account
Ask the buyer to pay by bank transfer or cheque into your NRO account. Keep every receipt.
7. Collect the TDS Certificate
The buyer must deposit the TDS with the government and give you a TDS certificate. Follow up until you have it. You need it to claim credit when you file your Indian tax return.
Capital Gains on NRI Property Sale
Capital gains are your profit from the sale. The tax depends on how long you held the property.
Short-Term vs Long-Term Gains
If you held the property for more than 24 months, the gain is long-term. For sales on or after 23 July 2024, long-term gains on property are taxed at a flat 12.5%, without indexation, plus surcharge and cess. If you held the property for 24 months or less, the gain is short-term. It is added to your income and taxed at your slab rate.
Some sellers who bought before 23 July 2024 may be able to compare the older method, which is 20% with indexation, against the new 12.5% rate. This option has conditions. Ask your accountant whether you qualify before you assume either way.
How to Work Out Your Gain
The basic formula is simple. Take the sale price. Subtract your purchase cost, the cost of major improvements and the selling costs, such as brokerage and legal fees.
Here is an example. You sell a flat for ₹1.2 crore. You bought it for ₹50 lakh, spent ₹10 lakh on a renovation and paid ₹2 lakh in brokerage. Your gain is ₹58 lakh. At 12.5%, the base tax is ₹7.25 lakh, before surcharge and cess. Keep bills for every cost. Without proof, you cannot claim them.
Legal Ways to Reduce the Tax
NRIs can use the same exemptions as residents. The old section numbers are still widely used, so ask your accountant for the matching ones under the new Act. Here are the main routes:
- Buy or build another residential house in India within the allowed time. The usual window is one year before or two years after the sale, or three years to build. This is the old Section 54.
- Invest the gain in specified bonds within six months, up to ₹50 lakh, with a five-year lock-in. This is the old Section 54EC.
- If you sold a different asset, such as land, and put the full sale amount into a house, the old Section 54F may help.
- If you cannot reinvest before your tax return is due, park the unused gain in a Capital Gains Account Scheme at an authorised bank.
Want a clearer view before you list your home?
TDS on Property Sale for NRI Sellers
TDS is the tax your buyer deducts from the price and pays to the government on your behalf. It is not an extra tax. It is an advance payment of the tax you may owe.
How Much TDS Will the Buyer Cut?
Resident sellers face TDS only on deals above ₹50 lakh, and at a low rate. NRIs get no such relief. TDS applies to every sale, whatever the value. On long-term gains, the rate is 12.5% plus surcharge and cess. On short-term gains, it is usually 30% plus surcharge and cess.
The key problem is the base. By default, TDS is cut on the full sale price, not just on the profit. Go back to our example. Your real tax is about ₹7.25 lakh. But 12.5% of ₹1.2 crore is ₹15 lakh, before surcharge and cess. The buyer may hold back more than double your real tax bill.
Get a Lower Deduction Certificate
You can apply to the tax department for a lower or nil deduction certificate before the sale. You will need the sale details and a working of your capital gains. The officer then sets a rate based on your real gain. The buyer must follow it. Approval can take a few weeks, so apply as soon as you have a buyer and a rough price.
Claim Your Refund
If the TDS is higher than your final tax, you can get the extra back. Check that the buyer has filed the TDS return and that it shows in your tax credit statement. Then file your Indian income tax return and claim the refund. You must file even if you expect a refund.
Bringing Sale Money Abroad
Once the tax is settled, you can move the money. The steps are fixed, and banks follow them strictly.
Start With Your NRO Account
Sale money should land in your NRO account. This is the rupee account for income earned in India. Interest on this account is taxable in India. If you do not have an NRO account, open one before the sale, not after.
Know the USD 1 Million Limit
As per Reserve Bank of India rules, an NRI can send up to USD 1 million per financial year, from April to March, from an NRO account. This covers sale proceeds and other capital transfers. You can only send money after you have paid or provided for the taxes. If your sale is larger, you can plan the transfer across two financial years.
Papers Your Bank Will Ask For
Expect to give the bank these items:
- Form 15CA, filed online with the tax department
- Form 15CB, a certificate from a chartered accountant
- Registered sale deed and purchase papers
- TDS certificate and proof of tax paid
- PAN, passport and a signed declaration
Rules for Residential Property
For a house or flat, the rules allow sending out the proceeds of up to two residential properties. Banks may ask how you got the property. It may have been inherited, gifted, or bought with money from abroad. Keep proof for each, because the answer affects how smoothly the transfer goes.
If you need help with day-to-day tasks in India while the sale is on, see the daily care support guidance on DeshSansaar.
Stuck on paperwork from abroad?
Document Checklist for NRI Property Sellers
Gather these before you speak to a buyer. It speeds up everything.
- Original title deed and chain of earlier deeds
- Encumbrance certificate and mutation records
- Society no-objection letter and no-dues certificate
- Purchase bills, renovation bills and brokerage receipts
- PAN card, passport and visa or OCI card
- NRO account details and cancelled cheque
- Power of Attorney, if someone signs for you
Selling a parent’s home? Family sales bring extra questions on legal heirs, wills and care plans. Our ageing and chronic care guidance can help you think through the family side.
Common Mistakes to Avoid
- Waiting until after the sale to ask about a lower TDS certificate
- Accepting part of the payment in cash
- Selling far below the circle rate without advice
- Not keeping renovation and brokerage bills
- Skipping the Indian tax return when TDS was already cut
Plan Your India Trip Around the Sale
If you travel to India to close the deal, use the trip well. Book your registrar appointment early and keep a few buffer days for delays. Jet lag can hurt your judgement in important meetings, so read our Ayurveda sleep tips for NRIs before you fly. It also helps to know the healthcare reality in India in case you need a doctor during a long stay.
Many families fit a health review into the same visit. Browse health clinics in India on MorningSun and book a slot, or send a query through the MorningSun enquiry page. If you want a calm break after the paperwork, look at these Ayurveda wellness centres, the Panchakarma centres near Delhi NCR or an Ayurveda retreat in Kerala. Not sure which style suits you? Read Ayurveda retreat vs Western wellness retreat.
Families who sell a long-held home often start thinking about long-term health too. MorningSun covers anti-ageing and longevity care and Ayurveda for health conditions. On DeshSansaar, read why Ayurveda is growing in the West, browse the Ayurveda guidance hub, explore treatment in India guidance or open the health and healing articles.
Simple self-care can also ease the stress of a long paperwork trip. Advik Ayurveda shares ideas on its blog. Its skin care, hair care and bath and body ranges are also easy to pack for travel.
Final Thoughts
Selling property in India as NRI is very doable when you plan in the right order. Check your status, fix your papers, apply for a lower TDS certificate, track your gain and keep every receipt. Then use your NRO account and the right forms to send the money home. A good chartered accountant is worth the fee, because one wrong step can lock up lakhs for months.
Ready to go deeper?
Read Our Property Sale Guide for more NRI-focused updates, or learn more about DeshSansaar and how we support families across borders.
FAQs:
Yes. Inherited residential or commercial property can be sold. Agricultural land can go only to a resident Indian citizen.
Yes, by default. A lower deduction certificate can limit TDS to your estimated capital gain instead.
Yes. You need it to claim TDS credit and any refund, and to report the capital gain properly.
Up to USD 1 million per financial year from an NRO account, after taxes are paid.
Yes. A properly attested Power of Attorney lets a trusted person sign and register the sale for you.
It often takes a few weeks. Apply early, as soon as you fix the buyer and a likely price.
External Resources
- Income Tax Department of India (official tax rules and forms)
- Income Tax e-Filing Portal (file returns, Form 15CA, lower deduction applications)
- TRACES (view TDS credit and certificates)
- Reserve Bank of India (FEMA rules and remittance limits)
- Ministry of External Affairs, Government of India (attestation and apostille guidance)
- National Highways Authority of India (specified bonds for tax saving)