NRI Selling Property in India: Procedure, Documents and Tax Points
The problem
You are an NRI and want to sell your property in Bengaluru. You worry about the paperwork, the tax deducted by the buyer and how to move the money abroad.
Example: An NRI in Dubai owns a site in Bengaluru bought in 2012. A buyer is ready. He wants to know what to prepare and whether he must fly in.
What the law says
An NRI can sell residential or commercial property in India to a resident or another NRI. The sale is completed only by a registered sale deed at the Sub-Registrar office. You can sign yourself or through a properly made power of attorney.
Because the seller is an NRI, the buyer must deduct tax at source (TDS) under the income-tax law before paying you. The rate depends on the type of capital gain. You can apply to the Income Tax Department for a lower or nil deduction certificate if your actual tax is lower. Speak to a chartered accountant on the tax part.
What you can do – step by step
- Collect your title papers. Sale deed, mother deeds, khata or e-khata, latest tax receipts and an encumbrance certificate.
- Check for loans or disputes. Close any home loan and get the bank’s release letter and original documents.
- Sign a sale agreement with the price, advance, timeline and who pays which costs.
- Decide how you will sign the sale deed – in person on a visit, or through a specific power of attorney.
- Handle TDS. Make sure the buyer deducts TDS, deposits it and gives you the TDS certificate. Apply for a lower deduction certificate early if needed, as it takes time.
- Register the sale deed and hand over possession and original documents.
- Move the money. Sale money is usually received into your NRO account. Under the Reserve Bank of India rules, NRIs can generally remit up to USD 1 million per financial year from NRO balances, with the forms your bank asks for.
Documents to keep
- Passport, visa or OCI card, and PAN card
- All title documents and the encumbrance certificate
- Sale agreement, sale deed and payment proofs
- TDS certificate and bank remittance papers
Mistakes to avoid
- Not having a PAN card. It is needed for TDS and registration.
- Accepting cash. Keep every payment through bank transfer.
- Handing over original documents before the full price is paid.
- Assuming agricultural land can be sold freely. NRIs cannot buy agricultural land, and special rules apply. Take advice first.
Contact
To speak to an advocate, call +91 63660 42792, WhatsApp the same number, or email contact@baselegal.in. You can also send us a message. Read more about our NRI Legal Services practice.
This article is for general information only. It is not legal advice. Please speak to an advocate about your own case.