By Arosh John | Founder – John Real Estate (MahaRERA Reg. No. A51700001835) | Editor-in-Chief – Thane Real Estate News
Selling a property in India is only part of the journey for an NRI. The bigger challenge often lies in repatriating the sale proceeds abroad. Indian exchange control laws (FEMA) and banking rules require specific documentation and approvals to ensure compliance. If you’re not careful, delays and blocked funds are common.
Here’s a step-by-step guide on how NRIs can repatriate funds legally and smoothly after a property sale.
1. Where the Sale Proceeds Land: NRO vs. NRE Account
- NRO Account (Non-Resident Ordinary):
All sale proceeds from property in India must first be credited into the seller’s NRO account. Even if you eventually want funds abroad, this is the mandatory entry point. - NRE Account (Non-Resident External):
From the NRO account, repatriation is possible to your NRE account or directly abroad. But repatriation requires proof that taxes (TDS, capital gains tax) have been paid.
Rule of Thumb: Property sale proceeds can’t be credited directly into an NRE account. The NRO account is the funnel for compliance checks.
2. FEMA Rules on Repatriation
- Eligibility: Sale proceeds of residential or commercial property originally purchased in compliance with FEMA can be repatriated. Agricultural land, plantation property, and farmhouses are generally not eligible.
- Limits:
- Up to USD 1 million per financial year can be repatriated from NRO accounts (including sale proceeds, rent, dividends, etc.).
- If the property was purchased out of inward remittances through NRE/FCNR funds, repatriation is permitted up to the original investment, without the USD 1 million cap. For residential property, this is restricted to not more than two such properties.
- Joint Owners: Repatriation eligibility applies proportionately to ownership share.
3. Tax Compliance First: Form 15CA & 15CB
Before the bank allows outward remittance, the Income Tax Act requires certification that applicable taxes have been paid. This is done through:
- Form 15CA: Declaration by the remitter (you, the NRI seller). Filed online on the Income Tax portal.
- Form 15CB: Certificate issued by a Chartered Accountant confirming:
- The nature of remittance.
- Applicable tax deduction.
- That due taxes (like TDS on property sale) have been discharged.
When both are required:
For property sale remittances, banks typically insist on both Form 15CA & Form 15CB before processing.
4. Bank Documentation Checklist
To process repatriation, banks usually require:
- Sale documents: Registered sale deed, buyer details.
- Tax proofs: TDS certificate (Form 16A from buyer), challan copies of tax paid.
- Forms: 15CA (filed online) and 15CB (CA certificate).
- NRO account statement: Showing credit of sale proceeds.
- PAN, Passport, and OCI/visa proof.
- Form A2 (bank’s outward remittance form).
5. Timelines and Practical Process
- Sale → NRO Account: Proceeds credited after registration and buyer’s TDS deduction.
- CA Certification: Within a few weeks, get Form 15CB prepared by your Chartered Accountant.
- File Form 15CA online: Generate acknowledgment to give the bank.
- Bank Review: Bank verifies FEMA compliance, caps, and documents.
- Transfer: Funds remitted abroad, usually within 3–5 working days after documents are complete.
6. Common Issues to Watch Out For
- Token/advance payments: If received before a TDS certificate was approved, these remain fully taxed. Ensure all challans and certificates are reconciled.
- USD 1 million cap: Plan large sales across financial years if exceeding this limit.
- Joint ownership: Each co-owner must file forms and repatriate only their share.
- Mismatch of PAN or TDS credits: Delays repatriation; reconcile with Form 26AS.
- Agricultural land/farmhouses: Not eligible for repatriation under FEMA.
Key Takeaways
- Sale proceeds must first go into an NRO account.
- Repatriation is allowed under FEMA up to USD 1 million per financial year, with exceptions for NRE/FCNR purchases.
- Form 15CA (declaration) and 15CB (CA certificate) are essential tax compliance steps.
- Banks require a bundle of documents: sale deed, TDS proof, NRO account statement, and PAN/ID proofs.
- Start paperwork early to avoid delays in receiving funds abroad.
Related Guides:
- [Capital Gains Computation Rules for NRIs: Updated Framework in 2025]
- [Buyer’s Step-by-Step TDS Compliance Checklist (NRI Seller – Section 195)]
- [Documents You Need for a Lower or Nil TDS Certificate (Form 13)]
Frequently Asked Questions
1. Can NRIs directly receive property sale proceeds in their NRE account?
No. Proceeds must first be credited to an NRO account. Only after tax and FEMA compliance can funds be transferred to NRE or abroad.
2. What is the repatriation limit for NRIs?
Up to USD 1 million per financial year can be repatriated from NRO balances, including sale proceeds.
3. Is there an exception to the USD 1 million cap?
Yes. If the property was purchased using NRE/FCNR funds, repatriation is allowed up to the original investment amount, restricted to two residential properties.
4. Why are Form 15CA and 15CB required for repatriation?
They certify that applicable taxes (like TDS on property sale) have been paid before funds leave India. Form 15CA is filed online; Form 15CB is issued by a Chartered Accountant.
5. What documents do banks need to process repatriation?
Banks usually require the sale deed, TDS proof (Form 16A), NRO account statement, Form 15CA/15CB, Form A2, and ID proofs.
6. How long does repatriation take once documents are submitted?
If paperwork is complete, most banks process outward remittance within 3–5 working days.
About the Author
Arosh John is a Thane-based real estate consultant and the Founder of John Real Estate (MahaRERA Reg. No. A51700001835). With more than a decade of expertise in property transactions, he is recognised for guiding NRIs and investors through resale, luxury villa projects, and compliance-heavy transactions. As Editor-in-Chief of Thane Real Estate News, he provides research-backed insights on property markets, taxation, and investment strategies across MMR.
Disclaimer
This article is based on the Income-tax Act, 1961, FEMA regulations, and official RBI/Income Tax Department guidelines. It is for general informational purposes only and should not be considered professional advice. Tax and FEMA provisions are subject to change. Readers should consult a qualified Chartered Accountant and their bank before initiating remittance. Neither the author nor Thane Real Estate News accepts liability for actions taken based on this article.
