How NRIs Can Sell Property in India: Complete Legal and Tax Guide for 2026

Over 3.2 lakh NRIs sold residential property in India in

1. According to a survey by a leading Indian realty platform, over 60% of NRI sellers encountered at least one significant legal or tax complication during the process. Most were avoidable. The complications cluster around three points: title and documentation problems discovered only at the registration desk, TDS errors by the buyer that delay or reduce repatriation, and India's foreign exchange regulations compliance steps skipped because nobody explained they existed.

Who Can an NRI Sell Property To?

Under India's foreign exchange regulations and the Non-Debt Instruments Rules 2019:

Residential and commercial property: Can be sold to any person — resident Indian, another NRI, or an OCI cardholder.

Agricultural land, plantation property, and farmhouse: Can only be sold to a resident Indian citizen. An NRI who has inherited agricultural land cannot sell it to another NRI or to a foreign national.

Step 1:

Title Verification Before You List A proper title verification for NRI property in India covers:

Chain of title: Review of all sale deeds, gift deeds, partition deeds, and inheritance documents going back several decades. Any missing link can derail registration.

Encumbrance certificate: An official record from the sub-registrar showing all registered transactions on the property for a specified period. The EC confirms whether any mortgage, charge, or claim is registered against the property.

Mutation records: The revenue records (Khatian in West Bengal, 7/12 extract in Maharashtra, Patta in Tamil Nadu) should show the NRI's name as current owner. If mutation has not been updated after inheritance, it must be done before the sale.

Court searches: A search of the district court records and the relevant High Court records to check for pending litigation, attachment orders, or injunctions affecting the property. For properties in West Bengal, title verification additionally covers the RS Khatian and LR Khatian at the BL&LRO, mouza map verification, and checks for vested land status under the West Bengal land reform laws.

Step 2:

Preparing the Power of Attorney Unless the NRI is physically present in India for the registration, a registered Special Power of Attorney authorising the sale of the specific property is required. The POA must:

• Name the specific property by address and survey details
• Specifically authorise execution and registration of the sale deed
• Have been executed at the Indian Consulate or apostilled in the NRI's country of residence
• Be adjudicated (stamp duty paid) in India within the prescribed timeline from arrival
• Be registered at the sub-registrar's office in India

Step 3:

TDS — What the Buyer Deducts and Why It Matters When a resident Indian buys property from an NRI, the buyer is legally required to deduct TDS (Tax Deducted at Source) from the payment before remitting to the NRI.

The rates (applicable from July 2024 Budget):

• Long-term capital gains (property held beyond the prescribed long-term holding period): 12.5% TDS
• Short-term capital gains (property held within the prescribed short-term holding period): 30% TDS

Following Budget 2026: The earlier requirement for resident buyers to obtain a separate TAN for NRI property purchases has been removed. Resident buyers can now use their PAN for TDS deduction and deposit.

Lower TDS certificate under the relevant provision: Where the NRI's actual capital gains tax liability is less than the standard TDS rate, the NRI can apply to the Income Tax Officer for a certificate under the relevant provision directing the buyer to deduct TDS at a lower rate. The applicable certificate must be obtained before the sale agreement is signed.

Step 4:

Capital Gains Tax for NRIs Long-term capital gains (LTCG) — property held beyond the prescribed long-term holding period: Rate: 12.5% without indexation (as per recent budget amendments) For properties acquired earlier, 2024: The NRI has a one-time election to choose between:

• 12.5% on gains without indexation, or
• 20% on gains with indexation Short-term capital gains (STCG) — property held within the prescribed short-term holding period: Rate: 30%

Exemptions available to NRIs: - The provision Reinvest long-term capital gains in one residential property in India (purchased within the prescribed window before or after the sale, or constructed within the prescribed timeline) — gains up to the reinvestment amount are exempt.

• the relevant provisionC: Invest up to Rs. 50 lakh in specified bonds (NHAI, REC) within the prescribed timeline from the sale — gains up to the investment amount are exempt. The bonds carry a mandatory lock-in period.

Step 5:

Forms 15CA and 15CB — The Repatriation Documents

Form 15CB: A certificate issued by a Chartered Accountant confirming the nature of the payment, whether it is taxable in India, the tax treaty position (DTAA), and that TDS has been correctly deducted.

Form 15CA: An online declaration filed by the NRI on the Income Tax portal. Part C of Form 15CA (applicable where the remittance exceeds Rs. 5 lakh) requires the 15CB certificate details to be incorporated. After filing Form 15CA, the NRI submits it along with the 15CB, the sale deed, Form 16B (TDS certificate from buyer), and other documents to the Authorised Dealer bank. The bank processes the remittance after KYC and India's foreign exchange regulations compliance checks.

Step 6:

India's foreign exchange regulations Repatriation Limits and Rules

NRO account remittance: Under India's foreign exchange regulations, an NRI can repatriate up to USD 1 million per financial year (April 1 to March 31) from the aggregate balance in their NRO account. This is an aggregate annual limit, not a per-property or per-transaction limit.

Property purchased with NRE/FCNR funds: If the NRI originally purchased the property using funds remitted from abroad through an NRE or FCNR account, the sale proceeds are repatriable in full (no USD 1 million cap), subject to a lifetime cap of proceeds from two residential properties.

Above USD 1 million: Repatriation above USD 1 million per year from NRO requires prior RBI approval through an Authorised Dealer bank.

Agricultural land: Sale proceeds from agricultural land cannot be repatriated under the standard NRO scheme. Prior RBI approval is required regardless of amount.

Common Mistakes NRIs Make When Selling Property in India

Not completing mutation before listing: If the NRI's name is not in the revenue records, the sale cannot proceed until mutation is done. Mutation at the BL&LRO in Bengal takes time. Plan ahead.

Not applying for the relevant provision certificate: NRIs with low actual capital gains tax liability routinely overpay TDS and wait a long time for a refund. A the relevant provision application before the sale prevents this entirely.

Assuming the buyer will handle TDS correctly: The buyer's obligation to deduct TDS is their legal responsibility but errors are common. Confirm TDS deduction and deposit with the buyer and check Form 26AS.