When an NRI (Non-Resident Indian) sells property in India, several tax implications must be considered as part of the NRI property selling process.

Capital Gains Tax

• Short-Term Capital Gains (STCG): If the property is sold within two years of purchase, the gains are considered short-term and are taxed according to the NRI’s applicable income tax slab rates in India​​.
• Long-Term Capital Gains (LTCG): If the property is held for more than two years, the gains are classified as long-term and are taxed at a fixed rate of 20% with indexation benefits, which adjust the purchase price for inflation​.

Exemptions and Deductions:

• Section 54: NRIs can claim exemptions on long-term capital gains by investing in another residential property within one year before or two years after the sale, or within three years for a new construction. If the new property is sold within three years, the exemption is reversed​​.
• Section 54EC: NRIs can also invest in specified bonds within six months of the sale to claim exemption. The maximum investment allowed is ₹50 lakhs in a financial year, and the bonds must be held for at least five years​.

Repatriation of Sale Proceeds:

• NRIs can repatriate sale proceeds up to USD 1 million per financial year, provided applicable taxes have been paid. Necessary documents include Form 15CA and 15CB, certified by a Chartered Accountant​.

Double Taxation Avoidance Agreement (DTAA):

• NRIs should check if their country has a DTAA with India to avoid being taxed twice on the same income. This agreement can provide tax credits or reduced tax rates​.