NRI · PURCHASE
The NRI guide to buying property in India
The companion note on the buying side — purchase structuring, POA, account opening.
A comprehensive walk-through of how a Non-Resident Indian lawfully moves sale proceeds of Indian residential property out of India. The two FEMA routes, the USD 1 million annual limit, the two-property restriction on sale-consideration repatriation, the documentation chain, and the Form 15CA/15CB tax clearance.
This is the single most important question an NRI property investor should answer before the purchase, not after the sale. The Foreign Exchange Management Act 1999 (FEMA) sets the rules under which an NRI can move funds into and out of India. Those rules are liberal by global standards — but they are rules, and they come with documentation requirements, banking-channel requirements, and tax-clearance requirements. A purchase structured in ignorance of these rules can leave an NRI seller unable to repatriate proceeds without months of remediation.
This desk note is a plain-English, operationally complete description of the repatriation path for a Non-Resident Indian who has purchased residential property in India after the 2017 FEMA liberalisation. It is not legal advice. It is an analyst's reading of the rulebook, with enough operational detail that an NRI reader can take it to their CA and ask the right questions. For the complementary note on buying under FEMA, see our NRI guide to buying property in India. For the narrower glossary treatment of the rules, see the repatriation glossary entry and the NRI property rules glossary entry.
| Feature | NRE account | NRO account |
|---|---|---|
| Source of funds | Foreign-earned, inward remittance | Indian-earned (rent, sale, dividend) |
| Repatriability | Fully repatriable, no cap | Up to USD 1M per financial year |
| Taxation in India | Interest tax-free | Interest taxable |
| Currency denomination | INR (funded ex-foreign currency) | INR |
| Can hold Indian-sourced income | No | Yes |
The practical implication for a property investor: funds used to buy flow through the NRE account (if remitted from abroad) or can be sourced from NRO. Funds received from sale typically flow through NRO and are then repatriated out subject to the USD 1M limit. Structuring the purchase-side remittance via NRE is usually preferable because it preserves a paper trail of inward remittance that simplifies the repatriation end.
Under RBI's Master Direction on Remittance of Assets, an NRI selling residential property in India may repatriate sale proceeds without prior RBI approval, subject to three conditions: (1) the property was acquired in accordance with FEMA at the time of purchase; (2) the sale consideration has been received in India through normal banking channels and credited to the NRO account; and (3) repatriation in any financial year does not exceed USD 1 million equivalent. Ninety-plus per cent of NRI property sales clear under the automatic route.
Where the USD 1 million annual limit is insufficient, or where the property was acquired under legacy FERA rules, or where the NRI is a citizen of a country restricted under FEMA (including Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong, Macau, or North Korea), a specific RBI approval is required. This is the approval route. Timelines for approval currently run 6–10 weeks.
FEMA contains a specific restriction: an NRI can repatriate the sale consideration of at most two residential properties in aggregate across their lifetime under the automatic route. This is not a per-financial-year limit, and it is not a per-property limit — it is a lifetime ceiling on residential properties whose sale proceeds are repatriated automatically. Sale consideration above that ceiling moves to the approval route. For an investor building a multi-property India portfolio, this is a material planning consideration and should be discussed with the desk at purchase, not at sale.
| # | Document | Issuer / source | When needed |
|---|---|---|---|
| 1 | Sale deed (registered) | Sub-Registrar's office | Immediately post-sale |
| 2 | Proof of original acquisition (purchase agreement, sale deed, allotment letter) | Original seller / builder | At bank file opening |
| 3 | Bank credit advice — sale consideration in NRO | Buyer's bank | At proceeds receipt |
| 4 | Form 15CA (self-certification of tax) | Filed by NRI on Income Tax portal | Before remittance |
| 5 | Form 15CB (CA certificate) | Chartered Accountant | Before remittance |
| 6 | A2 form (FEMA declaration) | Bank | At remittance initiation |
| 7 | Capital gains computation & tax paid challan | CA / self | Attached to 15CA |
| 8 | PAN card, passport, visa / residency proof | NRI self | At bank file opening |
Repatriation is a FEMA question. Taxation is an Income Tax Act question. Both must be cleared before funds can cross the border. The headline numbers: long-term capital gains (LTCG) on residential property held for more than 24 months are taxed at 12.5% plus applicable surcharge and cess (post-Finance Act 2024 regime, without indexation). Short-term gains are taxed at the NRI's applicable slab rate. TDS on the sale consideration is 12.5% for long-term plus surcharge and cess, with the buyer obliged to deduct and deposit. See the companion tax planning note and the capital gains tax glossary entry for the full treatment.
The interaction with FEMA is that the bank and the CA issuing the 15CB will both verify that the correct tax has been paid before the remittance is processed. Under-payment of tax is the most common cause of a stalled repatriation file. An experienced CA will front-run this by running the capital-gains math, paying any balance tax, and annexing the challan to the 15CB before the file is opened.
Five operational choices at purchase meaningfully simplify the repatriation path years later. First, fund the purchase through the NRE account wherever possible, using inward remittance from the foreign source — this creates a documented paper trail of the original foreign-currency origin. Second, retain every sale-deed document, stamp-duty receipt and GST invoice in digital form from day one. Third, file Indian tax returns annually, even in years with no Indian income, to maintain continuous PAN-linked residency records. Fourth, maintain a relationship with one Indian Chartered Accountant throughout the holding period; the 15CB at sale is materially easier when the CA already knows the file. Fifth, if the purchase is joint with a resident Indian family member, document each party's contribution clearly — ambiguity on contribution percentage is the single most common cause of repatriation disputes.
The companion note on the buying side — purchase structuring, POA, account opening.
Section 24, Section 80C, capital gains, DTAA — the full tax picture for a high-ticket NRI buyer.
The narrower definition and the rules at a glance.
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