Repatriating property sale proceeds as an NRI: the paper trail the bank wants

Short answer: the bank will remit an NRI's property sale proceeds once it can see four things: how the property was paid for, the sale itself (the registered deed and the money reaching your account), that the tax has been dealt with (the buyer's TDS certificate and a capital gains computation, or a lower-deduction certificate), and Form 145 with, where the remittance is taxable, a chartered accountant's Form 146. Where the purchase was paid in foreign exchange, the amount originally paid can go out outside the USD 1 million limit, for up to two residential properties. Everything else goes through the NRO account within that limit.

The order matters as much as the documents. Most of the tax cost of a badly run sale is fixed before the deed is signed.

Two questions decide the whole file

1. How was the property paid for? This decides the FEMA route: how much can leave as a return of foreign exchange, and how much has to go through the NRO (Non-Resident Ordinary) account and the annual limit.

2. Has the tax on the sale been settled? This decides the tax route: which part of Form 145 applies, whether a CA certificate is needed, and whether the bank will move at all.

Everything the bank asks for answers one of those two questions.

How the property was acquired decides the route

The rule behind the first rows is paragraph 8.2 of the RBI's Master Direction on Acquisition or Transfer of Immovable Property. The property must have been acquired in accordance with the foreign exchange law in force at the time, the purchase must have been paid in foreign exchange through banking channels or from an NRE or FCNR(B) account, and, for residential property, the facility is limited to not more than two properties.

Three consequences are worth spelling out.

The foreign-exchange route returns your cost, not the gain. The amount repatriated this way cannot exceed what you paid in foreign exchange. A flat bought for the rupee equivalent of USD 200,000 from an NRE account and sold for USD 450,000 sends out USD 200,000 outside the limit. The other USD 250,000 leaves through the NRO account and counts against the year's million.

The two-property count is not an annual allowance. The direction says not more than two such properties, with no reset. A third residential property bought with foreign exchange is still sellable and its proceeds can still leave India, but only through the NRO route.

There is no holding period for repatriation. Paragraph 8 sets none. Holding period matters for tax, not FEMA: property held for more than 24 months is a long-term capital asset.

How the USD 1 million limit works, including what counts and planning a large sale across two financial years, is in the USD 1 million NRO repatriation limit.

The paper trail

Two items on that list are where files stall. The proof of foreign-exchange payment for a purchase made many years ago: bank records that old take time to retrieve, and without them the purchase is treated as rupee-funded. The TDS credit: the certificate exists only after the buyer has filed the quarterly non-resident TDS statement (Form 27Q, and Form 144 for tax year 2026-27 onwards), and a buyer who files late or quotes the wrong PAN leaves you holding tax that does not show against your name.

The tax side, in brief

When the seller is a non-resident, the buyer deducts TDS under Section 195 of the Income-tax Act 1961, or, for tax year 2026-27 onwards, under the non-resident table in Section 393(2) of the Income-tax Act 2025. The buyer deducts on the whole sale price, not on your gain. The fix is a lower-deduction certificate, applied for before the payment: Section 197 and Form 13 under the 1961 Act, now Section 395(1) and Form 128. That, and the TAN relaxation for resident individual buyers from 1 October 2026, is in TDS on property sale by an NRI.

The certificate has to rest on a computation, and the computation rests on the exemption you intend to claim: reinvestment in a residential house, or specified bonds. Which exemptions are open to a non-resident is in NRI selling property: the tax, and how to cut it.

A certificate also simplifies the remittance. Where you hold an Assessing Officer's certificate, the remittance falls in Part B of Form 145, and no Form 146 arises. Where you do not, and the remittance is chargeable to tax and above ₹5 lakh in the year, Part C and a CA's Form 146 apply. Where the proceeds are already fully tax-paid, Part D may be the right part. Which one is in Form 15CA/15CB is now 145/146.

The order of work, from agreement to remittance

1. Before marketing: find the purchase deed and the proof of how it was paid for. For inherited property, start the succession papers now.
2. Before the agreement: compute the gain, decide on any exemption, and confirm the buyer understands that the TDS is under the non-resident provision, not the 1% resident rule.
3. Apply for the lower-deduction certificate so that it is issued before the buyer pays. Each non-resident co-owner needs their own.
4. At the sale: the buyer deducts per the certificate and pays the price into your NRO account, or the repatriable part as your bank directs. Keep the registered deed.
5. After the sale: make sure the buyer files the TDS statement and issues the certificate, and check the credit in Form 26AS or AIS.
6. Plan the remittance against the USD 1 million limit: the foreign-exchange cost outside it, the rest within it, split across financial years if needed.
7. File Form 145 in the right part, obtain Form 146 if Part C applies, and give the bank the file above, all through one bank.
8. File your Indian return for the year of sale, claim any exemption and any refund of excess TDS.

Where these go wrong

• Selling first, planning later. The certificate cannot be obtained after payment; the excess TDS then waits for a refund.
• Losing the foreign-exchange trail. Without proof that the purchase was paid from abroad, the whole sale goes through the USD 1 million limit.
• Forgetting it was the third flat. The two-property count looks at every residential sale you have repatriated this way, not just this one.
• Buyer paperwork. A buyer who deducted under the resident 1% provision, or never filed the statement, leaves the file incomplete until corrected.
• Co-owners assuming one set of papers covers all. Each co-owner remits their own share against their own limit, with their own Form 145.

This note reflects the RBI Master Directions on Acquisition or Transfer of Immovable Property and on Remittance of Assets, and the CBDT's mapping of the 1961 Act and Rules to the Income-tax Act 2025 and Rules 2026, as read on 23 September 2026. It is a general guide, not advice on a particular sale. The FEMA route depends on how the property was paid for, and the tax on the gain and the exemptions available depend on the facts and the year of transfer. Confirm the position against the current directions, with your AD bank, and on the computation before signing the agreement or remitting.