NRIs regularly invest in Indian real estate. The real challenge often arises later—when it’s time to move the sale proceeds abroad. Repatriation is allowed, but only if FEMA, RBI, and Indian tax rules are followed precisely.
Under current regulations issued by the Reserve Bank of India and governed by Foreign Exchange Management Act, an NRI can remit up to USD 1 million per financial year from their NRO account, after payment of applicable Indian taxes such as capital gains tax and TDS.
Raizada Law Associates advises NRIs on every stage of this process, ensuring that sale proceeds are transferred smoothly and in full compliance with Indian exchange control and tax laws. The firm also offers end-to-end property management services for NRIs, including sale execution, tenancy management, and regulatory compliance.
Legal Framework and Repatriation Limits for NRI Property Income
RBI and FEMA permit NRIs and PIOs to repatriate sale proceeds subject to specific conditions.
Only residential or commercial property qualifies. Proceeds from agricultural land, plantation property, or farmhouses generally cannot be repatriated abroad under FEMA, and such properties can typically be sold only to resident Indians.
The applicable rules depend on how and when the property was acquired.
Property Purchased as a Resident Indian (RI)
If the property was acquired while the individual was a resident Indian (before becoming an NRI), sale proceeds can be repatriated up to USD 1 million per financial year.
For example, if an NRI sells a Delhi apartment that was originally purchased while resident in India, the sale amount is first credited to the NRO account. From there, up to USD 1 million per year can be remitted abroad. Any amount beyond this limit requires prior RBI approval through the authorised dealer bank.
Property Purchased as an NRI Using Foreign Funds (NRE/FCNR)
Where the property was acquired using foreign currency remitted through banking channels or from NRE or FCNR accounts, the entire sale proceeds may be repatriated.
However, without RBI approval, this benefit applies to not more than two residential properties during an individual’s lifetime. Sale of additional properties requires prior RBI permission.
Property Purchased as an NRI Using Rupee Funds (NRO)
If the property was acquired using income earned in India or funds held in an NRO account, repatriation is again limited to USD 1 million per financial year.
Amounts exceeding this cap may be remitted over multiple years or after obtaining RBI approval.
Inherited Property
An NRI who inherits property in India is permitted to repatriate sale proceeds up to USD 1 million per financial year.
Banks will require documentary proof of inheritance, such as a will or legal heir certificate, along with tax clearance documentation. If the property was inherited from a non-resident foreign national, specific RBI approval is required.
FEMA Compliance Is Non-Negotiable
In every scenario, the original acquisition of the property must itself have been FEMA-compliant. If the purchase funds were remitted through proper banking channels or sourced from NRE or FCNR accounts, repatriation becomes significantly smoother.
The USD 1 million limit applies per individual per financial year. As a result, a married couple where both spouses are NRIs or PIOs may collectively repatriate up to USD 2 million per year, subject to documentation.
Repatriation Process and Required Documentation
Once the property is sold and taxes are settled, repatriation is routed through the seller’s NRO account.
The standard process is straightforward but documentation-heavy.
Step 1: Credit Sale Proceeds to NRO Account
All sale proceeds must first be deposited into the NRO account.
Step 2: Apply for Remittance Through the Bank
The NRI submits a remittance request to the authorised dealer bank.
Key Documents Required
- Form 15CA and Form 15CB
Form 15CA is an online remittance declaration.
Form 15CB is a Chartered Accountant’s certificate confirming that all applicable taxes have been paid. - Bank Repatriation Request Form
Provided by the bank to authorise debit from the NRO account and conversion into foreign currency. - Supporting Documents
Sale deed and registration copy
PAN card
Proof of tax payment or tax clearance certificate under Section 195
For inherited property, will or legal heir certificate
KYC documents and bank statements
Once the bank verifies compliance with RBI rules, it converts the funds into foreign currency and remits them to the overseas account. Amounts exceeding USD 1 million in a single financial year require specific RBI approval routed through the bank.
Tax Compliance and Capital Gains Considerations
All Indian taxes must be cleared before repatriation.
Capital gains tax applies as follows:
- Long-term capital gains
Property held for more than 2 years
Taxed at 20 percent with indexation - Short-term capital gains
Property held for less than 2 years
Taxed at applicable slab rates
In most transactions, the buyer deducts TDS at 20 percent plus surcharge on long-term capital gains when the seller is an NRI. The seller must ensure that the deduction reflects correctly in Form 26AS or Form 16A.
The Chartered Accountant’s certificate in Form 15CB confirms that no tax dues remain, which is essential for bank approval. NRIs should also evaluate DTAA provisions with their country of residence (such as the US, UK, or UAE) to avoid double taxation.
Why Raizada Law Associates for NRI Property Repatriation
Raizada Law Associates is widely recognised for its work in NRI property and cross-border legal matters. The firm’s NRI property lawyers advise on FEMA compliance, RBI regulations, and tax structuring related to property sales and repatriation.
Clients are supported through every step—from validating eligibility and preparing Forms 15CA and 15CB to coordinating with banks and tax professionals. The firm also provides comprehensive property management services for NRIs, handling leasing, sale execution, and ongoing compliance.
With Raizada Law Associates managing the legal and regulatory framework, NRIs based in the US, UK, UAE, and other jurisdictions can repatriate Indian property sale proceeds with clarity, confidence, and minimal friction.
