Selling property in India as a Non-Resident Indian (NRI) can be rewarding, but itโs not as simple as selling a car. It involves legal, financial, and tax intricacies that can catch even the most seasoned sellers off guard.
Whether you inherited a property, purchased it years ago, or are planning to cash in on real estate investment โ this 2025 guide walks you through everything you need to know about selling property in India as an NRI.
๐งพ Who is an NRI?
As per Indian tax laws, you are considered a Non-Resident Indian (NRI) if:
- You have lived outside India for more than 182 days in a financial year, or
- You do not meet the conditions of a resident under Section 6 of the Income Tax Act.
๐ What Kind of Property Can NRIs Sell in India?
NRIs are allowed to sell:
- Residential or commercial property freely
- Agricultural land / plantation / farmhouses ONLY if the buyer is an Indian resident (not another NRI or foreign citizen)
๐ผ Documents Required for Sale
Make sure you have:
- PAN Card (mandatory for taxation)
- Passport & Visa copies
- OCI/PIO card (if applicable)
- Title deed / registered sale deed
- Encumbrance certificate
- Power of Attorney (if you’re authorizing someone to act on your behalf in India)
- Bank Account details (preferably NRO Account)
- Tax Residency Certificate (for claiming DTAA benefits)
๐งฎ TDS on Sale: Tax Implications in 2025
Here’s the catch: TDS (Tax Deducted at Source) is much higher for NRIs than for resident Indians.
๐ค If the Property is Held for More Than 2 Years (Long-Term Capital Gain):
- TDS @ 20% + surcharge + cess (~23.92%)
- Indexed cost of acquisition is allowed
- You can claim capital gains exemptions (Sections 54, 54EC)
๐ต If Held for Less Than 2 Years (Short-Term):
- TDS @ 30% + surcharge + cess (~34.32%)
- No indexation or exemptions
๐ก Pro Tip: Apply for a Lower/NIL TDS certificate (Form 13) from the Income Tax Department before the sale to avoid excess TDS.
๐ Repatriation of Sale Proceeds
You can repatriate up to USD 1 million per financial year from India through NRO account, provided:
- Youโve paid all applicable taxes
- You submit Form 15CA & 15CB (from a Chartered Accountant)
๐ก If the property was purchased using foreign funds, repatriation is easier (up to the amount invested).
โ๏ธ DTAA Benefits (Double Taxation Avoidance Agreement)
India has DTAA treaties with many countries (like USA, UK, UAE, etc.) โ this helps you:
- Avoid paying tax both in India and your resident country
- Get tax credits in your home country
Make sure to submit Tax Residency Certificate (TRC) to claim these benefits.
๐จโ๐ผ Power of Attorney (POA)
If youโre not in India, you can authorize a trusted family member or legal representative to:
- Register sale deed
- Handle bank formalities
- Coordinate with buyers or brokers
๐ก Ensure the POA is:
- Notarized in your country
- Attested by the Indian Embassy/Consulate
- Adjudicated in India
๐ Legal Tips to Stay Compliant
โ
Check for clear title & encumbrance
โ
Clear all utility dues & property tax
โ
Register the sale at local Sub-Registrar Office
โ
Collect TDS certificates (Form 16B) from the buyer
โ
Retain proof of tax payments for future use or remittances
๐ก Pro Tips for NRIs Selling in 2025
- Use a CA or tax advisor to help with compliance
- Donโt forget to report the capital gains in ITR
- Plan ahead to get a lower TDS certificate โ it saves you thousands
- Always transact via Indian banking channels โ preferably NRO/NRE accounts
โ๏ธ Final Thoughts
Selling property in India as an NRI in 2025 can be seamless โ if you plan well, get professional help, and comply with the right documentation.
โThe key to a smooth property sale is being legally compliant and financially smart.โ
๐ Need expert help in NRI property tax, repatriation, or lower TDS certificate?
๐ผ Get in touch with ARMR & ASSOCIATES โ Your trusted Chartered Accountants for all NRI-related services.
