Selling a flat in Pune or a plot in Gurugram is the easy half. Getting the money into your bank account in Toronto, Dubai or London is where most NRIs get stuck, usually because the bank asks for a document nobody told them about. NRI property sale repatriation is governed by the Foreign Exchange Management Act, 1999 (FEMA), RBI directions and, since 1 April 2026, the new Income-tax Act, 2025. How much you can send, and how fast, depends mostly on one question: what money did you use to buy the property?
This guide covers the FEMA repatriation rules for NRIs, the USD 1 million limit, the tax you pay before the bank releases anything, and the step-by-step process with the 2026 forms.
What Repatriation Means for an NRI Selling Property
Repatriation is converting rupee funds held in India into foreign currency and sending them to your account abroad. When you sell property, the buyer pays you in rupees, the buyer deducts TDS, and the balance lands in your NRI account. Moving that balance out of India is a separate transaction with its own paperwork.
Two account types matter here:
- NRE (Non-Resident External) account: holds money earned abroad. The balance, including interest, is freely repatriable.
- NRO (Non-Resident Ordinary) account: holds income earned in India, such as rent, pension, dividends and property sale proceeds. Repatriation from NRO is capped.
In practice, most banks require property sale proceeds to be credited to your NRO account first, after which the repatriable portion is remitted abroad or moved to NRE.
FEMA Rules for Repatriation of Sale Proceeds from India
The FEMA (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 and the RBI Master Direction on Remittance of Assets set the limits. The source of your purchase money decides which rule applies.
| How the property was acquired | How much you can repatriate |
|---|---|
| Bought as an NRI with foreign inward remittance, or from NRE/FCNR(B) funds | Up to the amount originally paid in foreign exchange, without the USD 1 million cap. For residential property, this benefit covers a maximum of two properties. |
| Home loan repaid from NRE account or inward remittance | Loan repayments made in foreign exchange count as foreign-currency investment |
| Bought as an NRI using NRO / rupee funds | Within the USD 1 million per financial year limit |
| Bought while you were resident in India | Within the USD 1 million per financial year limit |
| Inherited from a resident or received as gift | Within the USD 1 million per financial year limit, with proof of inheritance |
| Third residential property onwards (foreign-exchange funded) | Within the USD 1 million per financial year limit |
| Capital gain above the foreign-exchange amount paid | Within the USD 1 million per financial year limit |
NRIs cannot buy agricultural land, plantation property or farmhouses in India. If you inherited one, you can sell it only to a resident Indian citizen, and the sale proceeds are repatriated under the USD 1 million facility.
The USD 1 Million NRI Repatriation Limit Explained
Under the USD 1 million facility, an NRI or OCI can remit up to USD 1 million per financial year (April to March) from NRO balances, after paying applicable tax. A few details trip people up:
- It is one combined limit. Rent, dividends, pension, maturity of NRO fixed deposits and property sale money all count against the same USD 1 million. If you already sent USD 200,000 of rental income this year, only USD 800,000 of sale proceeds can go out.
- It is per person, per year. Joint NRI owners each use their own USD 1 million limit for their share.
- It resets on 1 April. A sale that closes in February can use this year’s limit before 31 March and the next year’s limit from April.
- Anything above the limit either waits in your NRO account for the next financial year or needs a specific RBI approval, applied for through your authorised dealer bank.
Example: net proceeds of USD 1.6 million from an NRO-funded sale. Remit USD 1 million before 31 March and the remaining USD 0.6 million after 1 April, provided no other NRO remittances use up the new year’s limit.
NRI Property Sale tax and Repatriation: Pay Tax First
Your bank will not remit sale money until the tax position is clear. Here is what applies to sales from April 2026 onwards.
Capital gains tax
- Long-term (property held more than 24 months): 12.5% without indexation, plus surcharge and 4% cess. The option of 20% with indexation for property bought before 23 July 2024 is available only to resident individuals and HUFs, not to NRIs.
- Short-term (24 months or less): taxed at your slab rates.
Reinvestment exemptions that existed under the old Sections 54 and 54EC continue under the Income-tax Act, 2025 with renumbered sections. If you plan to buy another house in India or invest in specified bonds, discuss it with your CA before the sale.
TDS on sale of property by an NRI
The buyer deducts TDS under Section 393(2) of the Income-tax Act, 2025 (earlier Section 195). Unlike a resident seller, who suffers 1% TDS, an NRI seller faces TDS at the capital gains rate on the full sale price, not on the gain. There is no ₹50 lakh threshold.
Two 2026 changes worth knowing:
- Lower TDS certificate is now Form 128 (earlier Form 13), under Section 395. Apply to your jurisdictional Assessing Officer before the sale deed is registered, so TDS is deducted on your actual gain.
- Buyers no longer need a TAN from 1 October 2026. A resident individual or HUF buying from an NRI can deposit TDS with their PAN through Form 141 (new Schedule E). This removes a step that made many buyers wary of NRI-owned property. Company and firm buyers still follow the TAN route.
If your PAN is missing or inoperative, TDS jumps to a higher rate, so link and verify it before listing the property.
A worked example
Priya, an NRI in the US, bought a flat in 2015 for ₹60 lakh, paid entirely from her NRE account. She sells it in October 2026 for ₹1.5 crore.
| Item | Amount |
|---|---|
| Long-term capital gain (ignoring costs) | ₹90,00,000 |
| Tax on gain (12.5% + 10% surcharge + 4% cess) | about ₹12,87,000 |
| TDS if no Form 128 certificate (on full ₹1.5 crore, 15% surcharge) | about ₹22,42,500 |
| Excess tax locked until refund, without certificate | about ₹9,55,500 |
With a lower TDS certificate, roughly ₹1.37 crore reaches her NRO account. ₹60 lakh (the NRE-funded purchase price) can be repatriated outside the USD 1 million cap. The remaining ₹77 lakh or so goes out under the USD 1 million facility. Without the certificate, she files her Indian return and waits for a refund of around ₹9.5 lakh.
Figures are illustrative. Surcharge depends on total Indian income, and actual costs (stamp duty, brokerage, improvement) reduce the gain.
How to Transfer Property Sale Money from India to Abroad: Step by Step
- Collect proof of how you paid for the property. Bank statements showing inward remittance or NRE debits, the purchase deed, and loan statements if a home loan was involved. For inherited property: will or succession certificate, legal heir certificate and the previous owner’s title documents.
- Apply for a lower TDS certificate (Form 128) once the sale agreement is signed and before registration.
- Register the sale deed and receive payment into your NRO account. Make sure the buyer issues the TDS certificate.
- Get Form 146 from a Chartered Accountant. This is the CA certificate (earlier Form 15CB) confirming tax has been paid on the amount being remitted. Remittances above ₹5 lakh usually need it.
- File Form 145 on the income tax portal. This is your declaration (earlier Form 15CA). Part C is filed using the Form 146 acknowledgement number.
- Submit the remittance request to your bank: Form A2, Forms 145 and 146, a copy of the sale deed, TDS certificate, purchase-fund proof, passport and PAN, and an undertaking that you are within the USD 1 million limit for the year.
- Bank verifies and remits to your overseas account, or transfers the eligible amount to your NRE account.
- File your Indian income tax return for the year of sale and claim credit for the TDS. If you live in a treaty country, claim foreign tax credit on your overseas return under the relevant DTAA, since India generally keeps the right to tax gains on Indian property.
Forms 15CA and 15CB are not accepted for remittances made on or after 1 April 2026. If your bank or agent still asks for them, they mean Forms 145 and 146.
NRO Account Repatriation: Mistakes that Delay the Transfer
- Receiving sale money in a resident savings account. Once you become an NRI, resident accounts must be redesignated as NRO. Sale money credited to an old resident account creates a FEMA problem that the bank will ask you to regularise.
- No record of foreign-exchange purchase. Without the old remittance certificates or NRE statements, the bank treats the whole amount as NRO money under the USD 1 million limit.
- Forgetting other NRO remittances. Rent sent abroad earlier in the year reduces the space left for sale proceeds.
- Selling on a power of attorney with gaps. A general POA may not cover sale and receipt of consideration. Use a specific POA for sale, attested at the Indian embassy or apostilled, and adjudicated for stamp duty in India.
- Skipping the lower TDS certificate. The refund arrives only after you file your return and the department processes it, which can take months.
Get the Sale and the Repatriation Right the First Time
NRI property sale money repatriation works smoothly when the paperwork starts before the sale, not after it. Trace your purchase funds, get the lower TDS certificate, and line up your CA and bank before registration. A. Agarwalla & Co. handles the sale deed, power of attorney, lower TDS application and repatriation filings as part of its NRI legal services. Contact our NRI property team for a consultation.
FAQs
Can an NRI repatriate more than USD 1 million from a property sale?
Yes, in two ways. The amount paid in foreign exchange for up to two residential properties can be repatriated outside the limit. For the rest, spread remittances across financial years or apply to the RBI through your bank for approval above USD 1 million.
Can I repatriate sale proceeds of inherited property?
Yes. Sale proceeds of property inherited from a person resident in India can be remitted under the USD 1 million per financial year facility, with documentary proof of inheritance and tax payment.
Is there a lock-in period before I can repatriate?
No lock-in applies under the current FEMA regulations. You can remit once tax is paid and the bank has your documents.
Do I need Form 145 and Form 146 for every remittance?
Form 145 is filed per remittance. Form 146 (the CA certificate) is generally required when the amount exceeds ₹5 lakh in the year and is taxable, which covers most property sale repatriations.
Can I transfer property sale proceeds from NRO to NRE?
Yes. An NRO-to-NRE transfer is treated as repatriation and counts against the USD 1 million annual limit. The same Forms 145 and 146 apply.
What changed for NRI property sales in 2026?
The Income-tax Act, 2025 took effect on 1 April 2026: Section 195 became Section 393(2), Form 13 became Form 128, and Forms 15CA/15CB became Forms 145/146. From 1 October 2026, resident individual and HUF buyers can deposit TDS using PAN instead of obtaining a TAN.