NRI Selling Property in India: The Complete 2026 Guide

An NRI selling property in India must clear four gates: a clean title and sale agreement, a buyer who deducts tax at source under section 195 of the old Act (now section 393(2) of the Income-tax Act, 2025), a capital gains computation at 12.5% on long-term gains, and repatriation of the proceeds under RBI's USD 1 million scheme. Miss any one gate and the money sits in India.

This is the cornerstone guide. Each gate has its own deep-dive, linked below.

Who can sell, and what

An NRI can sell residential or commercial property in India to a resident, another NRI, or an OCI. Agricultural land, plantation property, and farmhouses are different: an NRI can sell those to a resident Indian citizen, not to another NRI.

Inherited property is sellable. Property bought while you were a resident is sellable. The residential status that matters for tax is your status in the year of sale, not the year of purchase.

Pricing and the buyer pool

Two facts shape your price. First, stamp duty value: if you sell below the circle rate by more than the permitted tolerance, both you and the buyer face deemed-income additions. Second, your buyer pool shrinks because buying from an NRI is harder. The buyer must get a TAN, deduct TDS at 13 to 14.95% of the full sale price, file a TDS return, and issue you a certificate. Many resident buyers walk away from that paperwork. The ones who stay expect a discount. A seller who arrives with a lower-TDS certificate already in hand removes the buyer's biggest fear and protects the price.

The buyer's TDS duty: the gate most deals break on

When a buyer purchases property from a resident, they deduct 1% under section 194-IA. When the seller is an NRI, that section does not apply. The buyer must deduct under section 195 (now section 393(2), Table S.No. 17 of the Income-tax Act, 2025) at the capital gains rate plus surcharge and cess, on the entire sale consideration, not on the gain.

For long-term holdings the effective deduction is 13% for sale prices under Rs 50 lakh, 14.3% between Rs 50 lakh and Rs 1 crore, and 14.95% above Rs 1 crore. On a Rs 2 crore flat that is Rs 29.9 lakh held back at source even if your actual gain is small.

The fix is a lower or nil TDS certificate. You apply in Form 13 (renumbered Form 128 under the 2025 Act) before the sale deed, and the tax officer issues a certificate that lets the buyer deduct close to your real liability. Read the full walkthrough: TDS on sale of property by NRI.

Documents you need ready

Document Why it matters
Sale deed or title deed in your name Proves ownership; buyers' lawyers check the chain
PAN (linked, active) Required for TDS credit and the Form 128 application
Encumbrance certificate Confirms no mortgage or lien
Khata, mutation, or society share certificate City-specific ownership records
Occupancy certificate (for built property) Banks funding your buyer will ask
Prior purchase deed and cost proofs Sets your acquisition cost for capital gains
NRO account details Sale proceeds must land here in most cases
Passport and visa or OCI card Establishes non-resident status

Inherited property adds the will or succession certificate and the legal heir documents. Start collecting these before you list. Title gaps surface late and kill closings.

Selling through a Power of Attorney

Most NRIs cannot fly down for every signature. A POA solves this, with rules:

  1. Draft a specific POA, not a general one. Name the property, the acts permitted (sign agreement, present for registration, receive consideration into a named account), and the holder.
  2. Sign it before the Indian consulate in your country, or notarise it there under local law with an apostille.
  3. Send the original to India. The POA holder gets it adjudicated and stamped with the district registrar within the prescribed window.
  4. The POA holder signs and registers the sale deed on your behalf.

Registrars reject POAs that are general, unstamped, or executed without consular attestation. Sub-registrar offices in Mumbai, Bangalore, and Gurgaon each have their own quirks on adjudication. Build two to four weeks into the timeline for this alone.

The taxes

Long-term gains (property held more than 24 months) are taxed at 12.5% without indexation for transfers on or after 23 July 2024, plus surcharge and cess. Short-term gains are taxed at your slab rate. Exemptions under the old sections 54, 54EC, and 54F (now sections 82, 85, and 86 of the Income-tax Act, 2025) can cut the bill to zero if you reinvest. Full numbers and worked logic: Capital gains tax for NRIs on property.

If you live in the US, the gain is also reportable there, with a foreign tax credit for Indian tax paid: DTAA India-USA for property owners. If you live in the UAE, the rules differ because the UAE charges no personal income tax: DTAA India-UAE for property owners.

Getting the money out

Sale proceeds land in your NRO account. From there, RBI permits remittance of up to USD 1 million per financial year, all NRO outflows combined, after taxes are paid and documented. The bank will demand Form 15CA and a CA certificate in Form 15CB. From 1 April 2026 these are Forms 145 and 146 under the Income-tax Act, 2025. The mechanics: Form 15CA and 15CB guide and repatriating property sale proceeds from NRO.

A realistic timeline

  1. Weeks 1 to 4: documents, title check, valuation, listing.
  2. Weeks 2 to 8: Form 128 (old Form 13) application for lower TDS. File this first. Certificates take three to eight weeks.
  3. Weeks 4 to 10: buyer negotiation, agreement to sell, buyer obtains TAN.
  4. Weeks 8 to 12: sale deed registration, TDS deduction and deposit, buyer files the TDS return and issues Form 16A.
  5. Weeks 10 to 16: CA certificate, Forms 145/146, bank processes remittance.
  6. Next assessment cycle: file your Indian return, claim refund of any excess TDS.

Four to six months end to end is normal. Faster is possible when the lower-TDS application starts before the buyer search.

Where this goes wrong

FAQ

Can an NRI sell property in India without coming to India? Yes. A specific, consular-attested, adjudicated POA lets a trusted holder sign and register the sale deed. Banks and registrars accept it when the formalities are exact.

What TDS applies when an NRI sells property? The buyer deducts under section 195 (now section 393(2) of the 2025 Act) at the capital gains rate plus surcharge and cess on the full sale price: 13% to 14.95% for long-term holdings, unless a lower-TDS certificate is in place.

Can an NRI sell property to another NRI? Yes, for residential and commercial property. Agricultural land can be sold to a resident Indian citizen.

How much money can an NRI take out after selling property? Up to USD 1 million per financial year from NRO balances, all remittances combined, after taxes are paid and Forms 145/146 are filed.

Do I need a PAN to sell? Yes. Without an active PAN you cannot get TDS credit, cannot apply for a lower-TDS certificate, and cannot file the return that recovers excess tax.

Is the 12.5% tax on the sale price or the gain? The tax is on the gain. The TDS, however, is computed on the sale price unless you hold a certificate under section 197 (now section 395). That mismatch is why certificates matter.

Whose job is the TDS, mine or the buyer's? The buyer's. But the cash withheld is yours, so the seller carries the economic risk of a buyer who gets it wrong.

Sell with a team that has done this before

66 MG Road runs NRI property sales end to end: title check, pricing, buyer-side TDS compliance, Form 128, sale deed through POA, Forms 145/146, and repatriation to your overseas account. Teams on the ground in Mumbai, Pune, Bangalore, Hyderabad, Chennai, and Gurgaon. Itemized billing, no percentage surprises. Start with sale and purchase services or tax and repatriation services.

Saurabh Garg, founder, 66 MG Road

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