For many Non-Resident Indians (NRIs), inheriting property in India or selling inherited assets carries emotional weight and practical legal challenges. One of the biggest questions that follows is simple: how do I transfer the money abroad? This process, called repatriation for NRI after property sale, is closely regulated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA).
The good news is that RBI does allow such transfers. The catch, however, lies in the details. The rules are clear-cut, but they demand strict compliance—especially when it comes to documentation, annual limits, and the routing of funds through authorised banks. Many NRIs assume the permission to repatriate is automatic, only to find themselves delayed by the finer procedural requirements, particularly the paperwork connected with NRO remittance documents and the involvement of the bank’s Authorised Dealer (AD) branch.
RBI Rules on Repatriating Inherited Property
When an NRI inherits property or sells inherited assets in India, the transfer of funds abroad must follow the RBI repatriation rules under FEMA. These rules are not complicated, but they are specific, and banks will not move a single rupee unless everything lines up.
1. Who Can Repatriate
NRIs and Persons of Indian Origin (PIOs) are both allowed to repatriate money received from inherited property. The inheritance, however, must be backed by proper legal proof—such as a Will, a registered Gift Deed, or a Succession Certificate. Without this, the bank will not process the request.
2. The Annual Limit
RBI allows up to USD 1 million (or equivalent) per financial year to be repatriated from inherited property or other eligible assets. This limit is per person, not per property. So, if three siblings inherit the same property, each can transfer up to USD 1 million abroad in a year.
3. The Route of Transfer
All proceeds must first be credited to an NRO account. From there, the Authorised Dealer (your bank’s designated branch) checks the paperwork and processes the outward remittance. You cannot skip the NRO account stage.
4. Taxes Must Be Paid First
Before the bank allows the transfer, you must show proof that all Indian taxes have been settled. For a property sale, this means capital gains tax. Banks usually ask for a Chartered Accountant’s certificates—Form 15CA and Form 15CB—as confirmation.
5. RBI Approval—Only If Needed
If you stay within the USD 1 million yearly ceiling, no RBI approval is required. If you need to send more, or if there are unusual circumstances, then special RBI permission must be sought.
Bank AD Documentation and NRO Remittance Process
Once the inherited property is sold and the money is deposited into your NRO account, the next hurdle is paperwork. This is where most NRIs get stuck—not because the rules are unfair, but because banks will not process a repatriation request without every required document in place. Your bank, acting as an Authorised Dealer (AD) under RBI rules, is responsible for verifying the legitimacy of the transfer before sending the funds abroad.
Here’s what you’ll need to prepare:
- Proof of Inheritance
- Documents showing how you became the rightful owner—such as a Will, Probate Order, Succession Certificate, or Gift Deed.
- In case of multiple heirs, the bank may also ask for a legal heir certificate or a No-Objection Certificate (NOC) from the other heirs.
- Proof of Sale (if applicable)
- If the inheritance has been sold, the Sale Deed and registered transfer documents must be provided.
- The bank will also want to see the credit entry in the NRO account that matches the sale proceeds.
- Tax Clearance Certificates
- Banks require Form 15CA and 15CB, prepared and signed by a Chartered Accountant, to confirm that applicable capital gains tax or other liabilities have been paid.
- In some cases, an Income Tax Department clearance may also be demanded.
- Application to the Bank
- A formal remittance request form (provided by your bank) must be completed. This form typically asks for beneficiary details abroad, remittance amount, and declaration of source of funds.
- Other Supporting Papers
- Copy of your PAN card, passport, OCI/PIO card (if applicable).
- Bank may also seek past bank statements or link documents to trace the chain of ownership.
FEMA Framework
All repatriation for NRIs after property sale or inheritance is governed by the Foreign Exchange Management Act (FEMA). Under FEMA, the Reserve Bank of India (RBI) sets the rules, and banks—through their Authorised Dealer (AD) branches—execute them. FEMA allows an NRI or PIO to remit up to USD 1 million per financial year from the sale of inherited property or other inherited assets, subject to proper documentation and tax compliance. Anything beyond this requires RBI approval.
FAQs
Q1. Can I repatriate sale proceeds of agricultural land inherited in India?
Yes, but only after ensuring compliance with local land laws and FEMA restrictions. The USD 1 million limit still applies.
Q2. Do I need RBI permission for every remittance?
No, not if you stay within the USD 1 million yearly limit and furnish proper documentation.
Q3. Can the money be sent directly from the buyer to my foreign account?
No. Funds must first go into your NRO account, and only then routed abroad through your AD bank.
Q4. What happens if tax returns are not filed?
The bank will not process your repatriation request without proof of tax payment and CA certification.
Q5. Can multiple heirs repatriate funds separately?
Yes. Each legal heir can remit up to USD 1 million per financial year, provided ownership and tax documents are in their name.
Conclusion
For NRIs, moving inherited wealth abroad is not about whether you are allowed—the RBI clearly permits it under FEMA—but about whether you have prepared the paperwork and followed the correct channel.
The RBI framework is not meant to block NRIs—it is meant to safeguard compliance. With the right NRO remittance documents and professional guidance from a Chartered Accountant, NRIs can secure a seamless transfer of their inheritance and avoid unnecessary stress.
