When an NRI sells property in India, the natural question is: how do I get the money out? The answer involves FEMA regulations, RBI guidelines, income tax compliance and a specific set of banking procedures that must be followed in the correct sequence. Miss a step and you may face delays, penalties or funds blocked in India indefinitely.
This guide walks through the complete repatriation framework for NRI property sale proceeds.
The Core Principle: Source Determines What Can Be Repatriated
FEMA's fundamental rule is straightforward: you can generally repatriate what you originally brought in. The source of funds used to purchase the property determines the repatriation entitlement when you sell.
- If you purchased using funds remitted from abroad or from your NRE account — the principal amount is freely repatriable
- If you purchased using NRO account funds — repatriation is subject to the USD 1 million annual limit
- Capital gains are repatriable in both cases, after payment of applicable taxes
This is why keeping records of your original remittance and purchase funding is so important. Years later, when you sell, those records are what the bank will ask for to process the repatriation.
The USD 1 Million Annual Limit
Under the Liberalised Remittance Scheme as it applies to NRIs, up to USD 1 million per financial year can be repatriated from NRO accounts. This limit covers all repatriations from NRO accounts — not just property proceeds. If you have rental income, dividends and property sale proceeds all sitting in an NRO account, they all count towards this limit.
For high-value properties, this may mean spreading the repatriation across two financial years (April–March) to stay within the limit. A CA can help you plan this efficiently.
What Cannot Be Repatriated
- Proceeds from the sale of agricultural land, plantation property or farmhouses — these cannot be repatriated regardless of source of funding
- Amounts in excess of the original foreign exchange brought in (beyond the USD 1 million NRO limit)
- Funds from properties where the purchase was partly financed through a home loan and the loan has not been fully repaid
Capital Gains Tax Before Repatriation
Tax clearance is a prerequisite for repatriation, not an afterthought. Before any funds leave India, capital gains tax must be computed and paid. The applicable rate depends on the holding period and purchase date:
- Short-term capital gains (held less than 24 months): taxed at the individual's applicable income tax slab rate
- Long-term capital gains on properties purchased on or after 23 July 2024: taxed at 12.5% without indexation benefit
- Long-term capital gains on properties purchased before 23 July 2024: taxed at 20% with indexation benefit
These rates were set by the Union Budget 2024 and remain unchanged under Budget 2026. A surcharge applies if total Indian income exceeds ₹50 lakh, and a 4% Health and Education Cess is added to the tax plus surcharge in all cases.
TDS at 12.5% of the full sale consideration (not just the gain) is deducted by the buyer at the time of sale for NRI sellers. This deducted TDS is not the final tax — it is an advance. If the actual capital gains tax liability is lower, the NRI must file an income tax return in India to claim a refund of the excess TDS before repatriating.
Budget 2026 Change: PAN Replaces TAN for TDS
One significant procedural change introduced in Budget 2026 takes effect from 1 October 2026. Previously, the buyer in an NRI property sale was required to obtain a separate Tax Deduction and Collection Account Number (TAN) in order to deposit the TDS with the government. This process routinely took two to four weeks and frequently delayed property registrations.
From 1 October 2026, buyers can use their existing Permanent Account Number (PAN) to deposit TDS on property purchases from NRIs. No TAN application is required. This removes one of the most common procedural bottlenecks in NRI property transactions and should meaningfully reduce the time between agreement and registration.
We consistently see NRIs lose significant sums by not filing an Indian income tax return after selling property. The TDS deducted is almost always higher than the actual tax due, and the refund — sometimes lakhs of rupees — is left unclaimed simply because the seller did not know they were entitled to it.
The Step-by-Step Repatriation Process
Documents Required at the Bank
| Document | Purpose |
|---|---|
| Form 15CA (filed online) | Self-declaration of remittance details |
| Form 15CB (CA-issued) | CA certification of tax compliance |
| Registered sale deed | Proof of property sale and consideration amount |
| Original purchase deed | Establishes the source of original investment |
| NRE remittance proof / NRE bank statements | Proves original funds came from abroad |
| TDS certificate (Form 16B from buyer) | Shows TDS deducted at source by the buyer |
| Tax payment challans | Proof of capital gains tax paid |
| Bank's own repatriation application form | Internal bank requirement — varies by bank |
| Passport copy and NRI status proof | KYC compliance |
Property Inherited by NRIs
Inherited property has a slightly different repatriation framework. NRIs who inherit property in India can repatriate the sale proceeds subject to the USD 1 million annual limit — regardless of how the original owner funded the purchase. The inheritance itself does not automatically create free repatriation rights.
Additional documentation required for inherited property repatriation includes the will or succession certificate, proof of death of the original owner, and confirmation that the NRI is the legal heir.
Rental Income Repatriation
Rental income from NRI-owned property flows into an NRO account and is subject to TDS at source (typically 30%). After TDS, the net rental income can be repatriated subject to the USD 1 million annual NRO limit and with the standard Form 15CA/15CB documentation. This is a simpler process than property sale proceeds but follows the same compliance framework.
Planning for Repatriation at the Time of Purchase
The most common mistake NRIs make is not thinking about repatriation at the time of purchase. The decisions you make when buying — which account type to use, how to document the funding, whether to take a home loan — directly determine your repatriation options years later when you sell. Planning for the exit at the entry point is not premature — it is essential.
How Long Does the Process Take?
From the date of sale registration to funds landing in an overseas account, a well-prepared repatriation typically takes four to eight weeks. The most time-consuming elements are obtaining Form 15CB (depending on CA availability and complexity), and the bank's internal processing queue. Banks with dedicated NRI desks — ICICI Bank, HDFC Bank, Axis Bank and SBI's NRI branches — tend to process these more efficiently than smaller banks unfamiliar with the procedure.
Delays of three to six months are not uncommon when documentation is incomplete or when TDS refunds are awaited. Beginning the documentation process before the sale is registered — as far as the compliance elements allow — helps shorten this window considerably.
Note that the New Income Tax Act, 2025 came into force on 1 April 2026, replacing the Income Tax Act, 1961. The substantive compliance requirements for NRI repatriation — Forms 15CA and 15CB, ITR filing, TDS certificates — remain intact under the new Act. The primary change is in the language and structure of the Act itself, which has been simplified for easier reading.
Every VittaBridge client engagement includes repatriation planning as part of the advisory. Whether you are buying now or selling soon, we coordinate with qualified CAs to ensure your funds move smoothly.
Book a Free Consultation