NRI · Money · The Propah POV
How does an NRI repatriate property sale proceeds from India?
Proceeds go to your NRO account first — never directly to NRE. Then, in this order: settle the tax, get Form 15CB from a chartered accountant, file Form 15CA online, submit Form A2 to the bank. The cap is USD 1 million per financial year, with an important exception if you bought in foreign exchange.
Two gates, and clearing one does not clear the other
There is a tax gate and an exchange-control gate. They are administered by different authorities under different statutes, and they are checked at different moments by different people.
The tax gate asks whether what you owe has been paid. The FEMA gate asks whether you are permitted to send this amount out at all. Sellers routinely satisfy the first, arrive at the bank expecting to transfer, and discover the second.
The limit, and the exception worth knowing
The general rule is USD 1 million per financial year — April to March — out of your NRO balances, with anything above requiring RBI approval through your authorised dealer bank. That covers not only this sale but every asset remittance you make from NRO in the same year.
But the limit that applies to you depends on how the property was originally funded.
| How you acquired it | What you can repatriate |
|---|---|
| Residential, bought with foreign exchange — funds remitted through banking channels or from NRE/FCNR | Sale proceeds of up to two residential properties, without the USD 1 million cap. The third onwards falls back under the USD 1 million scheme. |
| Commercial property bought the same way | No two-property restriction applies. |
| Bought with rupee funds or from your NRO account | USD 1 million per financial year, whatever the number of properties. |
| Bought while you were a resident in India | USD 1 million per financial year. |
| Inherited or received as a gift | USD 1 million per financial year. |
The two-property rule is the most valuable and least known line in this area. If you bought a flat in Bengaluru with money remitted from your salary abroad, the principal is not caught by the annual cap at all — but you will have to evidence the original inward remittance, sometimes from many years ago.
Keep the original inward remittance advice from the day you bought. It is the document that unlocks the exception, and nobody thinks to file it.
Proceeds cannot go straight to NRE
Sale proceeds of Indian immovable property are credited to your NRO account. Not NRE, not FCNR, whatever the buyer’s bank suggests and whatever would be more convenient.
The distinction matters because NRE balances are freely repatriable and NRO balances are not. Once the money is in NRO it is inside the exchange-control regime, and it leaves only through the process below — either directly overseas, or transferred to NRE first, which is the same process with the same paperwork.
The order of operations
The sequence is not arbitrary. Each step produces a document the next one requires, and doing them out of order means doing them twice.
Step by step
- 1. Before the sale — fix the withholding. Apply for a lower-deduction certificate so the buyer withholds something close to your actual liability rather than a percentage of the whole sale value. This is the single highest-value step and it only works before completion.
- 2. Complete the sale. The buyer deducts, deposits, files the quarterly statement and issues you the TDS certificate in Form 16A. You need that certificate later — chase it.
- 3. Proceeds land in NRO.
- 4. Settle the tax position. Pay any balance capital gains tax, or decide and act on an exemption — reinvestment in a residential property, or capital gains bonds, which have a six-month window running from the sale. Your CA cannot certify a clean position until this is resolved.
- 5. Obtain Form 15CB from a chartered accountant, certifying the nature of the remittance and that tax has been properly deducted and paid. This comes before the next step, because the next step asks for its acknowledgement number.
- 6. File Form 15CA online, in the correct Part — see below.
- 7. Submit to your bank: Form A2 (the application for outward remittance under FEMA), the filed 15CA and 15CB, the registered sale deed, the TDS certificate, and evidence of how the property was originally funded if you are relying on the two-property exception.
- 8. The bank remits. Allow days, not hours — branches query documents, and a query at step 7 can send you back to step 5.
- 9. Report it where you live. Your country of residence has its own rules about receiving a large inbound transfer and about the gain itself.
Which Part of Form 15CA applies to you
Form 15CA has four parts and people file the wrong one constantly. The conditions, as the Income Tax Department states them:
| Part | When it applies |
|---|---|
| Part A | The remittance, or the aggregate of remittances, does not exceed ₹5 lakh during the financial year. |
| Part B | Above ₹5 lakh in the financial year, and an order or certificate under section 195(2), 195(3) or 197 has been obtained from the Assessing Officer. |
| Part C | Above ₹5 lakh in the financial year, and a certificate in Form 15CB from an accountant has been obtained. |
| Part D | The remittance is not chargeable to tax. |
Two things follow from reading that carefully.
- The ₹5 lakh test is on the aggregate for the year, not on this transfer. Several small remittances that cross ₹5 lakh in total move you out of Part A.
- Form 15CB is not always required. If you already hold a lower-deduction certificate from the Assessing Officer, you are in Part B and do not need a separate 15CB — which is a second reason to have obtained that certificate. Part D exists for remittances that are not chargeable to tax at all.
Rule 37BB also carves out cases where Form 15CA is not required — broadly, remittances by individuals that do not require prior RBI approval, and transactions falling under specified RBI purpose codes. In practice many banks ask for the forms anyway. Arguing the point at the counter is rarely the fastest route to your money.
Where this goes wrong
- Discovering the cap in March. The limit is per financial year, so a large sale may need splitting across two years — and a sale completing in February gives you weeks, while one completing in April gives you a full year and then another. Timing the completion is free; discovering the problem afterwards is not.
- Not being able to evidence the original funding. The two-property exception depends on proving the purchase was made in foreign exchange. Bank statements from a decade ago, from a bank you no longer use, are hard to reconstruct.
- Letting the money sit in NRO. Interest on NRO balances is itself taxable in India and subject to withholding, so an unrepatriated balance keeps generating a small tax problem while you delay.
- Assuming Form 16A will arrive. It is issued after the buyer files their quarterly statement. If the buyer is an individual who has never done this before, follow it actively.
- Filing 15CA before 15CB. Part C requires the 15CB acknowledgement number. The order is not negotiable.
What we would do
- Establish which limit applies to you before you list the property, not after you have the money. It changes what a sale is worth to you in your own currency.
- Find the original remittance evidence early if the two-property exception matters. Retrieving old records takes weeks.
- Sequence the lower-deduction certificate first. It reduces what is withheld, and it can also put you in Part B rather than Part C.
- Pick your CA before completion, not after. A 15CB from someone who has seen the transaction from the start is faster and safer than one issued cold.
- Ask your bank branch for its document list in writing. Requirements vary between banks and between branches of the same bank.
- Consider the completion date deliberately. Where the amount is near the cap, which side of 31 March you complete on can decide whether the money moves in one year or two.
What this does not cover
- FEMA repatriation rules turn on facts specific to you — your residential status under FEMA and under the Income Tax Act, which are tested differently; how the property was funded; and how it came to you. The categories above are the general position, not a determination.
- Agricultural land, plantation property and farmhouses sit under separate restrictions, including on who may buy them from you.
- Bank documentation requirements vary and are not standardised across authorised dealers.
- Section and form numbering under the Income Tax Act 2025 is in transition and both old and new references are in circulation. Numbers here are given as the Income Tax Department currently states them.
- Tax in your country of residence, and relief under the applicable double taxation treaty, is a separate question this does not address.
- This is general information, not tax, legal or exchange-control advice. Engage a chartered accountant before you transact.
How much money can an NRI repatriate from India after selling property?
Generally USD 1 million per financial year from NRO balances, with anything above requiring RBI approval through your bank. The important exception: if the property was residential and was bought with foreign exchange remitted through banking channels or from NRE/FCNR funds, sale proceeds of up to two residential properties are repatriable outside that cap, with the third onwards falling back under the USD 1 million scheme. Commercial property bought the same way has no two-property restriction.
Can sale proceeds be credited directly to an NRE account?
No. Proceeds from the sale of immovable property in India are credited to your NRO account. NRE balances are freely repatriable and NRO balances are not, which is precisely why the money starts in NRO. Moving it out — whether overseas directly or into NRE first — requires the tax certification and bank documentation process, and the paperwork is the same either way.
What are Forms 15CA and 15CB, and do I need both?
Form 15CA is your online declaration of a remittance to a non-resident; Form 15CB is a chartered accountant's certificate about the nature of the payment and the tax on it. You do not always need both. Form 15CA has four parts: Part A where remittances aggregate ₹5 lakh or less in the financial year; Part B above that where you hold an order or certificate under section 195(2), 195(3) or 197 from the Assessing Officer; Part C above that where you have a 15CB; and Part D where the remittance is not chargeable to tax. So a lower-deduction certificate can put you in Part B and remove the need for a separate 15CB.
In what order should the forms be done?
Settle the tax first, then obtain Form 15CB from your chartered accountant, then file Form 15CA online, then submit Form A2 with the 15CA, 15CB, registered sale deed and TDS certificate to your bank. The order matters mechanically: Part C of Form 15CA asks for the acknowledgement number of the 15CB, so filing 15CA first means filing it twice.
Is the USD 1 million limit per property or per person?
Per person per financial year, and it covers all your asset remittances from NRO that year, not just this sale. So a second transaction, or a remittance of other funds, eats into the same allowance. Where a sale is large relative to the cap, the practical answer is usually to plan the remittance across two financial years — which makes the completion date relative to 31 March a decision worth taking deliberately.
What documents does the bank ask for?
Typically Form A2, the filed Form 15CA and Form 15CB where applicable, the registered sale deed, the TDS certificate in Form 16A from the buyer, and your account and KYC documents. If you are relying on the two-property exception for a property bought in foreign exchange, you will also need evidence of the original inward remittance. Requirements vary between banks and even between branches, so ask for the list in writing before you start.
Can I repatriate proceeds from inherited property?
Yes, but under the USD 1 million per financial year limit rather than the two-property exception, since the property was not acquired by you in foreign exchange. Anything above that needs RBI approval through your authorised dealer bank. Inherited property also raises separate cost-of-acquisition questions for computing the capital gain, which are worth resolving with a chartered accountant before the sale rather than after.
What happens if I leave the money in my NRO account?
Nothing forces you to remit, but the balance is not idle from a tax point of view — interest on NRO deposits is taxable in India and subject to withholding, so an unrepatriated balance keeps generating a small annual compliance obligation. The annual repatriation limit also does not accumulate; an unused allowance in one financial year does not carry into the next.
Form 15CA parts and thresholds are quoted from the Income Tax Department’s own published FAQ, checked in September 2026; the Rule 37BB carve-out is summarised from the same source. FEMA repatriation categories, including the two-residential-property exception for property acquired in foreign exchange and the position for commercial, rupee-funded, resident-acquired and inherited property, are from published banking guidance checked in September 2026. Section and form numbering under the Income Tax Act 2025 is in transition; references are given as currently stated by the department. Bank documentation is not standardised across authorised dealers. This is general information and not tax, legal or exchange-control advice.
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