Selling Property in India as an NRI? Here's How to Actually Get the Money Home

Say you own a flat in Pune. Or a plot outside Chennai your parents left you years ago. You live in New Jersey now, or Toronto, or Dubai, and that property has just been sitting there, quietly appreciating, while you got on with your life abroad. Then you finally sell it.

The sale itself is usually the easy part. What catches most NRIs off guard is everything that happens after the buyer signs. A big chunk of the money disappears into TDS before it ever reaches your account. Someone mentions capital gains tax. Your bank asks for a Form 15CA and a Form 15CB you've never heard of. And you're left wondering whether that money will ever actually land in your US or UK bank account.

It will. But the road from "property sold" to "dollars in your account" runs through a specific sequence of tax and banking rules, and getting even one step wrong can freeze the transfer for weeks or months.

 

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The three stops your money makes before it's yours again

Every NRI property sale in India, whether it's a one-bedroom in Kanpur or a bungalow in Goa, moves through the same three stages.

First, tax gets withheld right at the point of sale, before you see a rupee of it. Second, whatever's left has to land in one specific type of bank account, not just any account you happen to hold. Third, you apply to move that money out of India, and only at that point does it actually become dollars, pounds, or dirhams sitting in your own account.

Rush any of these, or get the order wrong, and the money doesn't move faster. It just gets stuck somewhere in the middle.

 

TDS: the first bite, and it's a big one

When a resident Indian sells property, the buyer deducts a flat 1% TDS, and only if the deal is worth more than ₹50 lakh. Sell as an NRI, and none of that applies to you.

Under Section 195 of the Income Tax Act, now renumbered to Section 393 under the Income-tax Act, 2025, which took effect this April, the buyer has to deduct TDS on every NRI property sale, no matter the size. There's no ₹50 lakh floor to hide under. A ₹15 lakh sale gets exactly the same scrutiny as a ₹5 crore one.

The rate depends on how long you've held the property. Owned it for more than 24 months, and the gain counts as long-term, taxed at 12.5% without indexation. Sell before that two-year mark, and it's short-term, taxed at your applicable income slab rate, which for most NRIs with meaningful income effectively lands close to 30%.

Add the surcharge and a 4% cess, and here's roughly where NRIs land in practice on long-term gains: around 13% on gains up to ₹50 lakh, closer to 14.3% between ₹50 lakh and ₹1 crore, and about 14.95% above that. Surcharge on capital gains caps out at 15%, so the effective rate doesn't keep climbing no matter how large the sale gets.

Here's the part that actually surprises people. TDS gets calculated on the entire sale price, not your profit, unless you've done something about it beforehand. Say you sell a flat for ₹1.5 crore that you originally bought for ₹1.1 crore. Your real gain is ₹40 lakh. Left alone, the buyer still withholds roughly 15% of the full ₹1.5 crore, north of ₹22 lakh, even though your actual tax bill on that ₹40 lakh gain works out closer to ₹5 lakh. You get the excess back eventually, through your Indian income tax return. But "eventually" can mean months, and that's your money sitting with the tax department instead of funding whatever you sold the property for in the first place.

 

You can legally shrink that TDS bite

You don't have to just wait for the refund. A Lower Deduction Certificate, filed as Form 13 (Form 128 under the newer numbering) with your jurisdictional Assessing Officer, lets the buyer deduct TDS on your actual expected gain instead of the full sale value. You apply through the TRACES portal, and it's worth doing this early, ideally 30 to 45 days before the sale closes, since the department typically takes three to six weeks to process it.

Three exemptions do most of the work here.

Section 54 (now Section 82) wipes out the tax on your gain if you reinvest in another residential property in India within the prescribed window, capped at ₹10 crore.

Section 54EC (now Section 85) lets you park up to ₹50 lakh of the gain into specified bonds, NHAI or REC, within six months of the sale, and that slice escapes tax entirely.

Section 54F (now Section 86) works on similar lines when the asset you sold wasn't a house, but the proceeds are going toward buying one.

Feed any of these into your Form 13 application and the certificate the Assessing Officer issues can bring your TDS rate down substantially, sometimes close to nil. Skip this step, and you're effectively giving the tax department an interest-free loan until your return gets processed and the refund comes through.

 

A simple step-by-step guide to moving property sale proceeds from India to your overseas account with the right documentation and compliance in place.

 

Why the money has to sit in an NRO account first

Before any of it can leave India, the sale proceeds need somewhere to land, and that somewhere is your NRO, or Non-Resident Ordinary, account. Not your NRE account. Not a regular resident savings account either, which you're not legally allowed to keep open once your status changes to NRI.

The distinction matters because NRE and NRO accounts play by completely different rules. An NRE account holds money you earned abroad and chose to bring into India. It's fully and freely repatriable, no cap, no extra paperwork. An NRO account is where India-sourced income lives instead, rent, dividends, pension, and yes, property sale proceeds, and moving money out of it comes with real conditions attached.

If you're not already clear on which account does what, our guide to NRE vs NRO accounts breaks the two down side by side. Worth reading before the sale closes, not after, since the account you deposit into is hard to undo.

 

How much can you actually send home

This is where the USD 1 million rule comes in, and it's the single most-searched question NRIs have about this entire process.

If you bought the property using rupee funds, meaning you were still a resident when you purchased it, or you funded it out of your NRO account, you can repatriate up to USD 1 million per financial year (that's April to March) from your combined NRO balances, once taxes are settled and the paperwork checks out.

If you originally bought the property with foreign funds, wired in through your NRE or FCNR account, the rules loosen considerably. You can repatriate the entire sale proceeds, not just a million dollars' worth of them. There's a catch, though: this full-repatriation route only applies to up to two residential properties in your lifetime without needing separate RBI approval. Sell a third one this way, and you'll need to apply to the RBI directly through your bank before the transfer can go ahead.

This applies to both residential and commercial property, by the way. What doesn't repatriate, in almost every case, is agricultural land, plantations, and farmhouses. NRIs generally can't purchase these categories outright to begin with, and proceeds from inherited agricultural land typically can't leave India either. If that's part of what you're selling, talk to your bank's NRI banking team before assuming the usual process applies.

Want to move more than USD 1 million in a single financial year, for any reason at all? That needs specific RBI approval, applied for through your authorised dealer bank, and isn't something you can push through on your own. The RBI's own FAQ on remittance of assets is the primary source here if you want the regulation in its original language rather than a summary.

One planning detail worth knowing: the USD 1 million cap resets every financial year. If a sale is large enough that you're going to bump against the limit, and you know you'll want to repatriate other NRO funds later in the same year, it's worth discussing the timing with your CA before the sale registers, not after.

 

The paperwork for the transfer itself

Once the money's sitting in your NRO account and correctly taxed, the outward transfer itself needs two more documents.

Form 15CA is a self-declaration you file, confirming the nature of the remittance and how it's been taxed. Form 15CB is a certificate from a practising Chartered Accountant, independently verifying the same thing. Both go to your bank before it will process the transfer abroad. If the forms themselves are new to you, we've written a separate guide to Form 15CA and 15CB covering exactly when each one applies and what triggers the requirement. The tax department has been renumbering various sections and forms under the newer Income-tax Act too, so don't be surprised if you see different numbers on more recent paperwork. The underlying requirement is unchanged.

Your bank, acting as your Authorised Dealer, will also want the sale deed, your PAN, proof that TDS was actually deposited against your name (Form 16A from the buyer), and a declaration of how the property was originally funded, since that's what determines which repatriation rule applies to you. Miss any one of these and the transfer sits in a queue instead of moving.

One quick note if you came here thinking this is the same as the LRS process residents use to send money abroad: it isn't. The Liberalised Remittance Scheme applies to resident Indians sending their own funds overseas, not to NRIs repatriating Indian-sourced income. Different scheme, different limits, different forms.

 

Mistakes that stall the transfer for weeks

A handful of patterns show up again and again in NRI property sales, and every one of them is avoidable.

Accepting part of the sale price in cash. Banks want the full consideration through proper banking channels into the NRO account. A cash component creates a paper trail gap that can hold up repatriation indefinitely, and it's flagged almost immediately during the FEMA compliance check.

Filing Form 13 too late, or skipping it entirely, then waiting months for a TDS refund that a bit of upfront paperwork would have avoided.

Mixing up NRE and NRO. Sale proceeds cannot be credited directly to an NRE account under any circumstances, no matter how the deal is structured or who suggests otherwise.

Registering the sale at a value that doesn't match what actually changed hands. Both banks and the tax department cross-check this, and a mismatch invites exactly the kind of scrutiny that delays everything else.

Not confirming the TDS actually shows up in your Form 26AS after the buyer deposits it. If their challan gets filed incorrectly, your tax credit can vanish, and untangling that becomes your problem to solve, not theirs.

 

Frequently asked questions

Can an NRI repatriate money from India after selling property?

Yes. Once the sale proceeds are deposited into an NRO account and the applicable taxes are paid, NRIs can repatriate up to USD 1 million per financial year, or the full sale amount if the property was originally purchased with foreign funds, subject to the two-property lifetime cap on that particular route.

 

Is an NRO account repatriable?

Yes, but with conditions attached. Unlike an NRE account, which is freely repatriable at any time, an NRO account allows repatriation of up to USD 1 million per financial year, after tax compliance and the required documentation, including Form 15CA and 15CB.

 

How much money can an NRI repatriate from India in a year?

Up to USD 1 million per financial year from NRO account balances, combined across every NRO account you hold. Amounts above that require specific RBI approval, applied for through an authorised dealer bank.

 

What is the TDS rate for NRIs selling property in India?

12.5% on long-term capital gains, for property held more than 24 months, plus surcharge and 4% cess, working out to roughly 13% to 14.95% depending on the size of the gain. Short-term gains, on property held two years or less, are taxed at slab rates instead.

 

Can NRIs legally reduce or avoid TDS on a property sale?

Yes, through a Lower Deduction Certificate, filed as Form 13 (Form 128 under the newer numbering), with the Income Tax Department before the sale closes. It's especially worth doing if you qualify for exemptions under Section 54, 54EC, or 54F.

 

Can NRIs sell agricultural land in India and repatriate the proceeds?

Generally, no. NRIs cannot purchase agricultural land, plantations, or farmhouses in the first place, and proceeds from inherited agricultural land typically cannot be repatriated either. These sales run on their own rules, so check with your bank's NRI team individually rather than assuming the standard process applies.

 

Where this leaves you

None of this makes the sale proceeds move any faster by itself. Getting the TDS calculation right, funding the correct NRO account, and filing 15CA and 15CB properly are what actually decide whether your money reaches your overseas account in days or sits stuck for months.

Once your NRO account is funded and your CA has signed off on the 15CB, the remittance itself is just a transfer, but it's the stage where a small paperwork mismatch causes the most last-minute bounce-backs. Matrix Forex handles NRI repatriation transfers as part of our RBI-authorised forex and remittance services, checking documentation up front so the transfer doesn't stall at the bank's end. If you're still early in the process and sorting out which account your proceeds should land in, or which forms you'll need, get in touch and we'll walk you through what applies to your specific sale.

Keep these key documents ready to make your property sale repatriation process faster, smoother, and fully compliant.