Property Tax - NRI

NRI's are eligible to sell their property in India without the permission of RBI (except for PIO's). Similar to the buying process, the sale of house also attracts tax liabilities. NRI's fall under the FEMA act for taxation.

If you plan to sell your property within 3 years from the date of purchase and make profit, you are liable to pay short term capital gain tax, which is usually TDS of 30% irrespective of your tax slab. But there are a few instances this can be minimized if you are planning to re-invest capital gains into another property or tax exempt bonds. If you plan to re-invest the entire profit, you will be exempt from taxes. Usually you will have 2 years from the date of sale to decide and invest in any other property, if you plan to buy bonds, the time limit is around 6 months from the date of sale.

If you plan to sell your property after 3 years from the date of purchase, you will be subject to long term capital gains tax, which is around 20%. Again, you can avoid paying taxes if you plan to re-invest the money back in other properties or bonds.

If you plan to repatriate the money to your overseas account, you will be allowed a limit up-to 1 million USD per year.


The above notes can help you to get an overview of the taxation, it is recommended that you consult a tax professional to smoothen the process.