Can NRIs repatriate the sale proceeds from property sales in India?

Answered by

A Agarwalla & Co.

Published At June 26, 2024

Answer

Yes, Non-Resident Indians (NRIs) can repatriate the sale proceeds from property sales in India, but there are specific guidelines and limitations they must adhere to, governed by the Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) regulations.

NRIs are allowed to repatriate up to USD 1 million per financial year from their Non-Resident Ordinary (NRO) account, which can include the sale proceeds of up to two residential properties. For properties bought as a resident before becoming an NRI, the sale proceeds must be credited to an NRO account and can be repatriated after a holding period of at least 10 years. If this period hasn’t been met, the proceeds must stay in the NRO account until it is completed.

For properties purchased as an NRI, the amount that can be repatriated should not exceed the foreign exchange brought into India to purchase the property. These funds must also be credited to an NRO account before repatriation​​.

In the case of inherited property, NRIs need to provide documentary evidence of the inheritance and ensure that all required taxes have been paid before repatriation. Additionally, it is essential to comply with all tax liabilities and provide necessary documentation, such as Form 15CA and Form 15CB, to facilitate this process​ ​.

Given the complexities involved, it’s recommended that NRIs consult with a real estate attorney in India to navigate the requirements effectively. This ensures that all procedures are correctly followed and that the repatriation of funds complies with the legal and financial regulations of India​.