Selling or inheriting property in India as an NRI? Plan tax and repatriation first, not last.
When an NRI sells Indian property the buyer deducts TDS at 12.5% (LTCG) or 30%+ (STCG) on the full sale value unless a Section 197 lower-deduction certificate is filed first. Sale proceeds route through NRO; up to USD 1 million per financial year can be repatriated via Form 15CA plus a CA-certified 15CB.
Last reviewed: June 2026 · Updated for AY 2026-27
Regi Tom Antony, FCA — a practicing Chartered Accountant who advises NRIs, OCIs and returning founders on the same questions every week. Every page here is drawn from the book and live engagements, not stock copy.
NRIs / OCIs planning to sell property in India — residential, land or commercial.
NRIs buying property in India while living abroad.
NRIs who have inherited or will inherit property in India.
NRIs who need to move funds from India to their country of residence.
The 4 key decisions for NRI property.
Should I sell, hold, or gift?
Sale, long-term hold, gifting within the family or transferring into joint ownership each have different tax, TDS and inheritance implications. Timing relative to your return to India and RNOR window matters as much as the structure itself.
How much tax and TDS will this trigger?
TDS is not the same as final tax. 12.5–30% deduction is common on NRI sales, but Section 197 plus a correct cost-base and DTAA position usually cuts the cash trap dramatically. The expensive mistakes — wrong holding period, missed exemption windows, ignored DTAA — happen at the buyer's CA, not yours.
How do I move the money out of India?
FEMA, bank documentation, NRO balance, repatriation limits and CA certification — the sequence matters. Sale → tax → documentation → bank → repatriation. Skip a step and the bank query loop costs you months.
What about inherited or jointly-held property?
Inherited property usually comes with title issues, mismatched records and family arrangements. Cleaning these up is often more valuable than tax saving alone. Indian vs overseas wills, nomination and documentation all need to line up before a sale or repatriation.
The biggest savings come from getting these four decisions in the right order — not from a single trick. We sequence everything before you sign the sale agreement.
Get a structured review→Three sub-journeys, step by step.
A · Selling property
Emotional, inherited or investment property — the pattern is similar. Common traps: buyer's CA insisting on default TDS, no Section 197, generic bank forms.
B · Buying property
Funding source matters as much as price. NRE / NRO / FCNR or local loan, FEMA rules, and how this affects future repatriation.
C · Inherited property
Title clarity, multiple heirs, and aligning the asset with your succession plan — often more valuable than the tax saving on a single transaction.
Property & repatriation, by where you live.
For NRIs in the UK
UK CGT, India CGT, India–UK DTAA and remittance treatment of the proceeds.
UK corridor →For NRIs in the Gulf / UAE
Zero personal tax there, but full Indian TDS and capital gains here. UAE CT if property is held via entity.
Gulf corridor →For NRIs in USA / Canada / AU / SG
Higher tax jurisdictions and currency exposure. DTAA layering matters for any large gain.
USA corridor →What goes right when things are planned.
UAE — Section 197 on a Bengaluru sale
Form 13 took TDS from 14.95% to 4.1% on actual LTCG. Significant working capital freed at closing; repatriated same FY.
Qatar — account cleanup & FEMA compounding
Five accounts to two, voluntary compounding settled, Schedule FA re-filed for 3 FYs — clean ledger before the next property move.
US — return sequencing meets property
Hybrid return + property case: 11-week shift in landing date preserved 2 RNOR years, opening a clean window to sell foreign holdings.
A four-step process from agreement to remittance.
Transaction & profile review
Property type, cost details, holding pattern, country of residence and planned timelines — mapped end-to-end.
Property & Repatriation service →Tax & TDS modelling
Capital gains computation, likely TDS, Section 197 case, DTAA layering and Form 67 where relevant.
TDS on property sale →Documentation & FEMA plan
Sale agreement clauses, supporting documents, account flows, bank coordination and a written FEMA position.
FEMA Compliance service →Execution & repatriation
Coordinating buyer / CAs / banks, filings, lower-deduction application and the outward wire — in sequence.
Repatriation of sale proceeds →Primary sources we work from.
- Income-tax Act — Sections 195 & 197 (TDS on NRI sale) ↗
Default TDS framework and the lower-deduction certificate route.
- RBI — FEMA Master Direction on Remittance of Assets ↗
USD 1M per FY repatriation framework and bank documentation rules.
- Income-tax Dept — Form 15CA & Form 15CB ↗
Outward-remittance declarations and CA certificate procedure.
- RBI — Acquisition & Transfer of Immovable Property by NRIs/OCIs ↗
What NRIs/OCIs can buy, hold, inherit, gift and sell in India.
External links open on official Government of India / RBI sites. We are not affiliated with these bodies.
Answered, candidly.
- How much TDS is deducted when an NRI sells property in India?
- Buyers must deduct TDS at 12.5% for long-term capital gains on immovable property (plus surcharge and cess — effectively ~13–15% depending on sale value) and at slab rates (commonly 30%) for short-term gains, before remitting the balance, under Section 195. Apply for a lower-deduction certificate under Section 197 to improve cash flow.
- How do I repatriate sale proceeds abroad?
- Sale proceeds are credited to your NRO account. You may remit up to USD 1 million per financial year after obtaining a Form 15CB from a CA and filing Form 15CA online.
- How is capital gains tax calculated for NRIs?
- For immovable property held over 24 months, long-term gains are taxed at 12.5% without indexation (Finance Act 2024, from 23 July 2024) — NRIs do not get the resident-only grandfathering option. For shorter holds, short-term gains are taxed at slab rates. NRIs cannot claim Section 54/54F exemption unless reinvestment is completed before the return filing due date.
- Can I lower TDS with a lower-deduction certificate?
- Yes. File Form 13 under Section 197 with the Assessing Officer before the sale completes. If approved, the buyer deducts TDS at the reduced rate — often close to your actual estimated tax. We file these routinely for NRI sellers.
- What if the property was inherited?
- Under Section 49(1) and Section 2(42A), acquisition cost and holding period step back to the original owner, so the gain on a long-held inherited property is taxed as long-term at 12.5% on (sale price minus the original owner's cost) — with no indexation. Title, succession proof and partition deeds usually need cleanup before the sale can close cleanly.
- Can I move sale proceeds straight to my NRE account?
- No. Sale proceeds of property acquired while resident must land in NRO, not NRE. Direct routing to NRE is a FEMA breach that complicates every later transfer. Remit out of NRO under the USD 1M cap with 15CA/CB.
- How long does the full sale-to-repatriation cycle take?
- Plan for 8–14 weeks end-to-end: 2–4 weeks for Section 197 (if used), 1–2 weeks around closing and TDS deposit, 1–2 weeks for 15CB / 15CA and bank documentation, and 1–3 days for the actual remittance. Inherited or jointly-held property typically adds 4–8 weeks for title cleanup.
- Can OCI cardholders sell agricultural land, plantations or farmhouses?
- No. OCIs and NRIs cannot acquire agricultural land, plantation property or farmhouses. If you inherited such property from a resident relative, you may hold and sell it — but only to a resident Indian, and the proceeds route through NRO with the same 15CA/CB and USD 1M repatriation framework.
Work the full property + repatriation chain.
TDS, Section 197, capital gains and the closing flow.
FEMA rules, funding and documentation.
Default 12.5%/30% trap and how Form 13 fixes it.
USD 1M cap, 15CA/CB and NRO mechanics.
Title, partition and FEMA on inherited assets.
End-to-end advisory across sale, NRO and remit.
Wills, nominees and cross-border estate.
Sequence sale and RNOR if you're moving back.
Account, property and repatriation rules in depth.
Rules, breaches and compounding — written down.
Engage on the full sale-to-remit sequence.
Ready to plan? Book a strategy call with Regi.
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