Sending sale proceeds abroad: NRI repatriation rules

Route 1: paragraph 8.2, property bought with foreign money

The RBI Master Direction and its FAQ (question 7) say that an authorised dealer may allow repatriation of the sale proceeds of an NRI’s or PIO’s immovable property, other than agricultural land, a farmhouse or plantation property, if:

1. The property was acquired in accordance with the foreign exchange law in force at the time of acquisition (or under the NDI Rules, 2019).
2. The price was paid “in foreign exchange received through banking channels”, or out of funds held in an FCNR(B) or NRE account.
3. For residential property, “the repatriation of sale proceeds is restricted to not more than two such properties”.

Repayment of a housing loan can count as foreign exchange: the Master Direction says such repayments may be treated as equivalent to foreign exchange received, where they come from abroad or from NRE or FCNR(B) accounts. See NRI home loans.

Route 2: USD 1 million per financial year

Section 3.2 of the Master Direction on Remittance of Assets says authorised dealers may allow NRIs and PIOs, on documentary evidence, to remit up to USD one million per financial year (April to March), out of NRO balances or sale proceeds of assets, including transfers to NRE and SNRR accounts.

Conditions in that section:

• Undertaking. When the money comes from NRO balances, the bank must obtain an undertaking that the funds are the account holder’s own balances and not “borrowing from any other person”. A false undertaking makes the holder “liable for penal action under FEMA”.
• One bank. If the remittance is made in more than one instalment, all instalments go through the same authorised dealer.
• Above the limit. Remittance above USD 1,000,000 in a financial year needs prior RBI approval (section 4.1).
• Taxes. Section 5 says remittances are subject to payment of applicable taxes in India and that the RBI issues no FEMA instruction on tax matters.

The RBI’s FAQ on accounts states that NRO balances “are remittable up to USD 1 (one) million per financial year (April-March) along with their other eligible assets”. The limit therefore covers all such assets together, not each sale.

Property that cannot be repatriated

• Agricultural land, farmhouse or plantation property. Excluded from paragraph 8.2 and question 7(c).
• Property acquired under section 6(5) of FEMA. A person who acquired immovable property under section 6(5) of FEMA “cannot repatriate the sale proceeds of such property without RBI approval” (FAQ question 7(a); paragraph 8.1). The Remittance of Assets facility, within USD 1 million, is open to specified categories (question 7(b)).

Tax before remittance

Tax on a sale by a non-resident is deducted by the buyer under section 393(2), Table 17, of the Income-tax Act, 2025, at rates in force; long-term gains are taxed at 12.5% (section 197(1)(b)). The full picture is in NRI selling property: capital gains and TDS. A lower deduction certificate under section 395(1) can reduce the deduction at source. Keep the buyer’s certificate of tax deducted, the sale deed, the purchase records showing how you paid, and the bank statements; the bank will ask for documentary evidence. The sources read do not list the exact forms; ask your authorised dealer bank and your chartered accountant.

What differs by state

The repatriation rules are central. The state only matters before the sale: stamp duty, registration of the sale deed and the stamp duty value (stamp duty calculator), and whether a society or municipality needs to clear dues.

Which professional to consult

An authorised dealer bank handles the remittance. A chartered accountant prepares the tax side and any certificate. A property lawyer (advocate) enrolled with the State Bar Council can check that the sale deed and payments are documented; see property lawyer.