Costs & tax · 4 min read
Selling an Indian property as an NRI: tax and repatriation basics
Plan the exit before you buy. When an NRI sells property in India, tax is deducted at source by the buyer, and the proceeds are credited to an Indian bank account. Moving the money abroad has its own conditions.
The moving parts
- Capital gains tax depends on how long you held the property and on the rules in force when you sell.
- The buyer deducts tax at source when paying an NRI seller, at rates set under the Income Tax Act. A lower-deduction certificate can sometimes be obtained.
- You file an Indian income tax return reporting the sale.
- Repatriation of sale proceeds is allowed within limits set by the Reserve Bank, subject to documents and tax paid. Your bank will ask for the supporting papers.
Keep these records from day one
- The sale deed and the agreement for sale.
- Proof of the original purchase payments through banking channels.
- Stamp duty and registration receipts.
- Any home loan statements.
Tax and foreign exchange rules change often. Speak to a chartered accountant who works with NRIs before you buy and again before you sell.
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