Selling property in India as an NRI involves confirming clear title and PAN/OCI documentation before listing, ensuring the buyer deducts TDS at the higher NRI rate (or applying for a lower/nil-TDS certificate in advance), and then completing the tax filing and RBI-compliant repatriation steps once the sale closes -- each stage has its own paperwork, and missing the TDS or repatriation steps is the most common cause of delay.
Before listing: title and eligibility documents
- Original title deed and an unbroken chain of prior title documents (sale deeds, gift deeds, or a will
and probate/succession certificate, as applicable) going back as far as practically obtainable.
- Encumbrance certificate covering at least the past 13-30 years, confirming the property is free of
unregistered liens, mortgages, or pending litigation.
- Latest property tax receipts and, for apartments, a no-dues certificate from the housing society or
residents’ welfare association.
- PAN card (mandatory for the sale deed and for TDS compliance) and, if the seller is an OCI/PIO, the
OCI or PIO card alongside the foreign passport.
- Valid Power of Attorney, if the sale will be executed in India by someone other than the NRI owner
personally -- see the separate POA documents checklist for what that requires.
At the time of sale: TDS and buyer compliance
Under Section 195 of the Income Tax Act, a buyer purchasing property from an NRI seller must deduct tax
at source at a materially higher rate than the roughly 1% TDS that applies to resident-seller transactions
-- the exact NRI rate depends on whether the resulting gain is long-term or short-term and on applicable
surcharge and cess. Because this deduction is calculated on the full sale value (not just the gain) unless
a lower/nil-TDS certificate is obtained, many NRI sellers apply to the jurisdictional Assessing Officer in
advance under Section 197 for a certificate authorizing a reduced TDS rate that better reflects the actual
taxable gain. The buyer is also required to obtain a TAN (Tax Deduction Account Number) to remit this TDS
and to issue Form 16A after deposit, and both parties should confirm the property's fair market value and
stamp-duty valuation align, since a mismatch can trigger separate scrutiny.
- Apply for a Section 197 lower/nil-TDS certificate before the sale, if the actual gain is significantly
less than the full sale value.
- Confirm the buyer has (or obtains) a TAN before the sale deed is executed.
- Retain Form 16A and the buyer's TDS deposit challan as proof of the tax already paid on the seller's
behalf.
After sale: repatriation and tax filing
Sale proceeds are typically first credited to the seller's NRO account, since that is where TDS-net
amounts from an Indian buyer are ordinarily routed. Repatriating those funds abroad -- up to USD 1 million
per financial year for an NRI/OCI, inclusive of other eligible remittances -- requires Form 15CA (and,
above the prescribed threshold, Form 15CB certified by a chartered accountant) confirming the applicable
tax has been paid or accounted for, along with the authorized dealer bank's own documentation requirements.
The seller must also file an Indian income tax return for the year of sale to report the capital gain,
claim credit for the TDS already deducted, and claim any exemption available under Sections 54, 54EC, or
54F where the proceeds are reinvested in a qualifying manner -- filing this return is often the only way to
recover TDS that was deducted on the full sale value rather than the actual gain.
What TDS rate applies when an NRI sells property in India?
The rate is materially higher than the roughly 1% TDS applied to resident-seller sales, and depends on
whether the gain is treated as long-term or short-term, plus applicable surcharge and cess -- an NRI seller
should get the exact current rate confirmed against the specific holding period and sale value rather than
relying on a flat figure, and should consider applying for a Section 197 lower/nil-TDS certificate where
the gain is well below the full sale price.
Can an NRI repatriate the full sale proceeds abroad?
Generally yes, up to the RBI's USD 1 million per financial year limit (combined with other eligible
remittances from NRO balances), subject to Form 15CA/15CB documentation confirming applicable tax has been
paid or accounted for, and subject to the property having been acquired in compliance with FEMA at the
time of purchase.
Does an NRI seller need a lower or nil-TDS certificate?
It isn’t mandatory, but it is strongly advisable whenever the actual taxable capital gain is
significantly less than the full sale value, since without it the buyer must deduct TDS on the full sale
price rather than the gain -- a Section 197 certificate from the Assessing Officer authorizes the buyer to
deduct at a lower, gain-appropriate rate instead.
