How an NRI Can Repatriate Property Sale Money From India

An NRI who sells a flat or office in India has two ways to take the money out, and which one applies depends on how the property was paid for. If it was bought with money brought in from abroad (an inward remittance, or funds in an NRE or FCNR(B) account), the bank can allow repatriation of the property sale proceeds directly, for up to two residential properties. If it was inherited, bought while you were resident in India, or is a third residential property, the money goes into your NRO account and leaves under the USD 1 million per financial year facility.

Either way, tax on the capital gain is settled first: the buyer deducts TDS, and the bank asks for Form 145 before it sends anything abroad.

The FEMA side of this sits in rule 29 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and in the RBI's Master Direction on remittance of assets. The tax side, for a sale made in tax year 2026-27, is governed by the Income-tax Act, 2025. Everything below is as checked on 26 October 2026.

Match your property to the right exit route

Start by placing each property you are selling in one of these rows. The answer decides which paperwork the bank will want and whether the annual cap matters.

The last row is a separate subject with its own restrictions on who can buy; the rules on whether an NRI or OCI can buy, inherit or sell agricultural land cover it. Note also that "NRI" here is a FEMA status. Someone can be non-resident for income tax and still resident under FEMA, or the other way round, so check the position under both laws using the comparison of FEMA and income tax residential status before you pick a route.

The direct route: three conditions in rule 29(2)

Rule 29(1) of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 starts from a prohibition: a person who holds Indian property under section 6(5) of FEMA (property acquired while resident) cannot repatriate the sale proceeds except with the general or specific permission of the Reserve Bank. Rule 29(2) is the general permission for NRIs and OCIs. It lets the authorised dealer bank allow repatriation of sale proceeds of property other than agricultural land, a farm house or plantation property, if all three conditions are met:

1. The property was acquired in line with the foreign exchange law in force when it was bought, or under these Rules.
2. The purchase price was paid in foreign exchange received through banking channels, or out of funds held in an FCNR(B) or NRE account.
3. For residential property, repatriation is restricted to not more than two such properties.

The RBI's FAQs on purchase of immovable property in India by non-residents repeat the same three conditions. Condition 2 is where most files get stuck. The bank has to be satisfied about the money trail at the time of purchase: NRE account statements showing the payments to the builder or seller, or foreign inward remittance certificates. Where a home loan funded the purchase, keep the loan statement showing how it was repaid, because the condition looks at the source of the purchase money. Collect these before you sign the sale agreement, not after.

If part of the price came from your NRO account or from rupee income in India, that part was not paid in foreign exchange, and condition 2 is not met for it. Discuss with your bank how it will treat a mixed source before the sale. Whatever does not pass under rule 29(2) can still go out through the NRO route described next.

The two-property limit applies to residential property only. The rule does not say it resets each year, so count it across all residential properties you have repatriated under rule 29(2), and decide which two sales to use it for. A high-value flat is a better use of a slot than a small one that would fit comfortably within the annual USD 1 million anyway.

The NRO route and the USD 1 million cap

For everything else, the RBI Master Direction on Remittance of Assets (updated as on 29 June 2026) lets authorised dealer banks allow NRIs and PIOs to remit up to USD 1 million per financial year, on documentary evidence. The money can come from NRO balances, sale proceeds of assets, and assets acquired in India by inheritance or legacy. "Assets" expressly includes sale proceeds of immovable property. The remittance is subject to payment of applicable taxes in India, and where it is made from an NRO account the account holder gives an undertaking that the money comes from their own balances in that account.

Three practical points follow from the Direction:

• The cap runs per financial year (April to March), so a large amount can be sent in instalments across two years.
• Where the remittance is made in more than one instalment, all instalments must go through the same authorised dealer bank.
• Anything beyond what the Direction covers needs approval from the Reserve Bank.

The cap also covers your other NRO money, such as rent and savings that you send abroad in the same year. If you need a refresher on what an NRO account can receive and how it differs from an NRE account, see the comparison of NRE and NRO accounts.

Tax first: what the buyer must deduct under section 393(2)

A resident buying from a non-resident does not use the 1% property TDS that applies between residents. That 1% entry, in Table Sl. No. 3(i) of section 393(1), is meant for resident sellers; the guide to TDS on property purchases between residents explains it and notes that the form for that entry does not apply to a non-resident seller. For a non-resident seller, Table Sl. No. 17 of section 393(2) of the Income-tax Act, 2025 applies: any person paying a non-resident any sum chargeable to tax must deduct at the rates in force.

For long-term capital gains on land or a building, the rate is 12.5% under section 197 of the Income-tax Act, 2025, plus surcharge where applicable and health and education cess. Section 197(3) gives an option to compute tax at 20% with indexation for land or buildings acquired before 23 July 2024, but only to an individual or HUF "being a resident". An NRI seller does not get it, which can make the NRI's tax higher than a resident sibling's on an identical flat.

Why a certificate under section 395 changes the cash you receive

Tax is due only on the gain, not on the price. A buyer, though, has no reliable way to check your cost of acquisition, and bears the consequences of short deduction. A seller who wants deduction only on the gain should apply to the Assessing Officer for a lower deduction certificate under section 395 before the sale. The application process is explained in the guide to Form 128 for lower or nil TDS. The buyer then deducts at the rate stated in the certificate, and the Form 141 Schedule E user manual has a field for the certificate number.

The same manual warns that if the seller's address, tax residency certificate or tax identification number is not furnished, tax has to be deducted at the higher rate under section 397(2). Give the buyer your PAN and these details early.

Buyers who are individuals or HUFs no longer need a TAN

Until 30 September 2026, a resident individual buying from an NRI had to obtain a TAN just to deduct and deposit this tax. From 1 October 2026, a resident individual or resident HUF buyer can deposit the tax and report it through Schedule E of Form 141 using their PAN. The portal states that obtaining a TAN is no longer mandatory for such transactions. The Form 141 FAQs give the timelines: payment within 30 days from the end of the month in which tax is deducted, and the TDS certificate is downloaded from TRACES once the statement is processed. Buyers that are companies, firms or other entities are outside Schedule E and continue with their regular TDS compliance.

Worked example: one flat bought with NRE money, one inherited

This is an illustration with assumed figures. Priya is an NRI working in Dubai. In tax year 2026-27 she sells two flats.

Flat A, Bengaluru. She bought it in March 2017 for ₹70,00,000, paid entirely from her NRE account, and sells it in November 2026 for ₹1,30,00,000. Ignoring transfer expenses and improvements, the long-term capital gain is ₹60,00,000. Tax at 12.5% on the gain is ₹7,50,000 before surcharge and cess. If instead the buyer had no certificate and deducted 12.5% on the full price, the base deduction would be ₹16,25,000, so ₹8,75,000 more would be locked up until Priya files her return and claims a refund.

With a section 395 certificate, the buyer deducts on the gain, and Priya's bank can remit the net proceeds of Flat A abroad under rule 29(2), using one of her two residential slots. Ask the bank to process this remittance under rule 29(2), so that it is not booked against the separate USD 1 million facility.

Flat B, Jaipur. She inherited it from her mother. Inherited property fails condition 2 of rule 29(2), because Priya never paid for it in foreign exchange. Suppose ₹84,00,000 reaches her NRO account after tax. At an assumed rate of ₹88 to the US dollar, that is about USD 95,455, well inside the USD 1 million she can remit from NRO funds in FY 2026-27.

Change one fact. If Flat B had been a bungalow netting ₹9,50,00,000, the same rate gives about USD 1,079,545. Priya could remit USD 1 million (₹8,80,00,000 at that rate) in FY 2026-27 and the remaining ₹70,00,000, about USD 79,545, on or after 1 April 2027, through the same bank as the first instalment.

Form 145 and Form 146 at the bank

From tax year 2026-27, Form 145 replaces Form 15CA and Form 146 replaces Form 15CB. Form 145 is filed online on the e-filing portal before the remittance. The Form 145 user manual sets out four parts:

• Part A: the remittance is chargeable to tax and does not exceed ₹5,00,000 during the tax year.
• Part B: it is chargeable, exceeds ₹5,00,000, and a certificate under section 395 has been obtained from the Assessing Officer.
• Part C: it is chargeable, exceeds ₹5,00,000, and a chartered accountant's certificate in Form 146 has been obtained; the accountant must file Form 146 first.
• Part D: the remittance is not chargeable to tax, other than the payments listed in rule 220(3).

Which part applies to a particular remittance is a judgement your chartered accountant makes from the facts. What makes Form 146 quick to issue is a clean tax trail: the TDS certificate from the buyer, the challan for any self-assessment tax, and the computation of the gain.

Papers to assemble before you sign the sale deed

• The purchase deed or allotment letter and payment receipts from the builder or original seller.
• Proof that the purchase price came in foreign exchange: NRE or FCNR(B) statements for the payment dates, or inward remittance certificates. For a loan-funded purchase, the loan account statement showing how instalments were repaid.
• For inherited property, the will or succession documents and the mutation record in your name.
• PAN, address abroad, tax residency certificate and foreign tax identification number for the buyer's TDS.
• The section 395 certificate, if you have applied for one, and the buyer's TDS certificate after the sale.
• The sale deed showing the consideration, and the bank credit for the sale money.
• A count of residential properties already repatriated under rule 29(2) and the NRO remittances already made in the current financial year.

Once the sale money is in, file the income tax return for the tax year of the sale even if TDS covers the full tax. That return is where any excess deduction is refunded, and it is the document a later Form 146 or a bank query will rely on.