Selling property in India while living abroad can feel overwhelming. From legal formalities and tax implications to paperwork and fund repatriation, the process involves multiple steps that are easy to miss if you’re not physically present in the country.
Many NRIs also face confusion around who they can sell to, how much tax they’ll pay, and how to bring the money back overseas safely.
This comprehensive NRI property sale guide explains everything you need to know—ownership rules, tax planning, TDS, Power of Attorney, and how to repatriate funds abroad without hassle.
Who Can NRIs Sell Property To?
NRIs, OCIs, and PIOs can sell residential and commercial property in India to:
- Indian residents
- Other NRIs
- OCIs
However, agricultural land, farmhouses, and plantation properties can only be sold to Indian residents—even if inherited.
Step 1: Ensure a Clear Property Title
Before initiating a property sale, confirm you have:
- A registered title deed in your name, or
- A valid Builder-Buyer Agreement (if the property is under construction)
Clear ownership is essential for buyer verification and bank approvals.
Step 2: Selling Property from Abroad – Power of Attorney (POA)
If you’re not traveling to India for the sale:
- Execute a Power of Attorney in the country where you live
- Get it notarized and attested by the Indian consulate
- Send it to India for registration/adjudication within 3 months
This authorizes your trusted representative to sign and execute the property sale.
Step 3: Selling Under-Construction Property Before Possession
If you’re selling before property possession:
- Check Builder-Buyer Agreement clauses for resale
- Obtain a No Objection Certificate (NOC) from the builder
- Pay any transfer charges that may apply as per the builder buyer agreement. Please note, In a lot of cases the first transfer could be free of cost.
- Sign an Assignment Agreement to transfer rights to the new buyer
- Execute a Tripartite Agreement among you, the builder, and the buyer
Step 4: Essential Documents for NRI Property Sale
- Original title deed or sale deed
- PAN card
- Passport and OCI/PIO card
- Encumbrance certificate and municipal approvals
- Builder-related documents (if applicable)
- Power of Attorney
- Tax forms (Form 15CA/15CB for repatriation)
Step 5: Understand Capital Gains Tax and TDS for NRIs
Capital Gains Tax on Property Sale
- Short-Term Capital Gains (STCG): If the property is held for 24 months or less, gains are taxed at your applicable income tax slab (up to 30%).
- Long-Term Capital Gains (LTCG): If held for more than 24 months, gains are taxed at 12.5%.
TDS Deduction on Property Sale
Under Section 195, the buyer must deduct TDS:
- The TDS deducted is 12.5% if the property is held for less than 24 months.
- The TDS deducted is 30% if the property is held for more than 24 months.
- To avoid excess deduction, apply for a Lower TDS Certificate (Form 13) from the Income Tax Department before the sale
Step 6: Save Tax Through Exemptions
You can claim tax exemptions on LTCG by reinvesting:
- Section 54 – Buy another residential property in India within the stipulated time
- Section 54F – Invest sale proceeds from other assets into a residential house
- Section 54EC – Invest up to ₹50 lakh in NHAI/REC government bonds within 6 months
Step 7: Repatriating Property Sale Proceeds Abroad
- All sale proceeds must first be deposited into your NRO account
- Repatriation rules:
- Unlimited repatriation if the property was purchased with funds from an NRE/FCNR account
- Up to USD 1 million per financial year from NRO account (beyond this requires RBI approval)
Before repatriating, submit Form 15CA and 15CB for tax clearance.
Step 8: File Tax Returns in India and Claim DTAA Benefits
- File your Indian Income Tax Return (ITR) to report capital gains and claim any TDS refund
- If you reside in a country with a Double Tax Avoidance Agreement (DTAA) with India, you can claim tax credit in your resident country to avoid double taxation
Step 9: Get Expert Help for a Hassle-Free Sale
Selling property remotely involves multiple legal, tax, and banking formalities. It’s recommended to hire:
- A legal expert for POA and agreements
- A chartered accountant for lower TDS certificates and tax exemptions
- A real estate consultant to handle buyer negotiations and paperwork
Common Mistakes NRIs Should Avoid
- Selling under-construction property without builder NOC
- Failing to register POA in India after consulate attestation
- Ignoring Form 13, resulting in higher TDS deduction
- Exceeding NRO account repatriation limits without RBI approval
- Not filing Indian ITR and missing DTAA benefits abroad
Quick Checklist for NRIs Selling Property in India
- Verify property ownership and title documents
- Draft and register POA if selling remotely
- Get builder consent for under-construction resale
- Apply for Lower TDS Certificate (Form 13)
- Plan LTCG exemptions under Section 54, 54F, or 54EC
- Route funds via NRO account, then file Form 15CA/15CB for repatriation
- File Indian ITR and claim DTAA benefits in your country of residence
Conclusion
Selling property in India as an NRI doesn’t have to be complicated if you follow the right process. With a clear understanding of the legal rules, tax implications, and repatriation procedures, you can save money, avoid legal hassles, and complete the transaction remotely without stress.
For a smooth, end-to-end experience, professional services like NRI Simplify can manage everything—from Power of Attorney and buyer coordination to tax filings and repatriation—so you can sell your property in India with complete peace of mind.
