Selling Inherited Immovable Property in India from Overseas: A Guide for NRIs and OCIs
At Momentum Law, we regularly assist NRIs and OCIs in navigating inheritance and property sales in India — from documentation to repatriation under FEMA
If you’re an NRI or OCI, chances are at some point you’ll need to deal with inherited property back in India. Whether it’s a flat in Delhi, ancestral land in Punjab, or a family house in Kerala, selling it from abroad isn’t always straightforward.
Between tax rules, buyer’s TDS obligations, Power of Attorney paperwork, and FEMA restrictions on sending money abroad, the process can feel overwhelming.
Don’t worry—we’ve broken it down step by step so you know exactly what to expect in 2025.
Step 1: Make Sure the Property Is Legally in Your Name
Before you can sell, your title needs to be crystal clear. Here’s what usually comes into play:
- Legal heirship certificate or registered family settlement (if there’s no Will).
- Probate of Will (mandatory in certain states like Maharashtra, West Bengal, and Tamil Nadu).
- Relinquishment deeds from other heirs, if applicable
- Mutation of records in municipal/revenue authorities showing your name as the owner.
- Utility bills, society NOC, and tax receipts—these all help establish ownership.
Pro tip: Keep both notarised hard copies and digital scans ready. Buyers and banks will insist on them.
Step 2: Decide How You’ll Execute the Sale
- In person: If you’re visiting India, you can sign the sale deed at the Sub-Registrar’s office.
- Through Power of Attorney: If you can’t travel, issue a Special Power of Attorney (SPA) in favour of a trusted relative or advisor.
- Execute it before the Indian Embassy/Consulate (or get it apostilled, depending on your country).
- Once in India, the PoA must be stamped and registered with the local Sub-Registrar.
A general PoA is riskier—always keep it specific to the one property.
Step 3: Understand the Tax Angle
Here’s where many NRIs get caught off guard.
- Long-Term Capital Gains (LTCG): If the property was held for more than 24 months (by you or the person you inherited it from), the gain is taxed at 20% with indexation.
- Short-Term Capital Gains (STCG): If held for less than 24 months, it’s taxed as per your slab rate.
You can reduce the tax hit using:
- Section 54: Reinvest in another residential property.
- Section 54EC: Invest sale proceeds in specified bonds within 6 months.
Step 4: Handle the Buyer’s TDS Obligations
When an NRI sells property, the buyer must deduct TDS before paying you.
- Usually, they deduct on the entire sale value, not just your capital gain.
- This means a huge chunk of money gets stuck unnecessarily.
Your solution? Apply for a lower or NIL TDS certificate (Form 13). Once approved by the tax department, the buyer will deduct only the actual tax due.
Step 5: Repatriate the Money Abroad
Under RBI’s FEMA rules, NRIs and OCIs can remit sale proceeds, but with conditions:
- Limit: USD 1 million per financial year per person.
- Sale proceeds must first be deposited into your NRO account.
- You’ll need to file:
- Form 15CA online.
- Form 15CB from a Chartered Accountant confirming taxes are paid.
Your bank will also ask for copies of the sale deed, mutation proof, and tax challans.
Step 6: Avoid Double Taxation
If you live in a country that has a DTAA (Double Taxation Avoidance Agreement) with India—like the US, UK, UAE, or Singapore—you won’t pay tax twice.
- Provide a Tax Residency Certificate (TRC) and your foreign tax ID.
- Claim credit in your home country for tax paid in India.
Watch Out for These Red Flags
- Mutation or society NOC not updated = sale delays.
- PoA not registered in India = rejected at Sub-Registrar.
- Not applying for Form 13 = unnecessary TDS blockage.
- Trying to repatriate more than $1M/year = RBI approval needed (long wait).
Quick Checklist Before You Sell
- Copy of Will/Probate/Heirship certificate
- Mutation records in your name
- PAN card (yes, even NRIs need one for property deals)
- Buyer’s TDS challans & Form 16A
- Chartered Accountant’s Form 15CB
- Form 15CA acknowledgement
- Registered Power of Attorney (where applicable)
FAQs
Q1: Can I sell inherited property without coming to India?
Yes, through a Special Power of Attorney executed abroad and registered in India.
Q2: What’s the TDS rate on such sales?
20% on long-term capital gains (after indexation) or slab rate if short-term.
Q3: How do I avoid excess TDS?
Apply for a lower/NIL TDS certificate under Form 13.
Q4: How much money can I send abroad?
Up to USD 1 million per financial year, subject to FEMA compliance.
Q5: Will I pay tax in my country of residence too?
Yes, but DTAA helps you claim credit for Indian tax paid.
Final Thoughts
Selling inherited property from abroad isn’t impossible— its easy, but it does require careful planning. Get your documents in order, apply for a lower TDS certificate early, and work with a reliable bank/CA to ensure smooth repatriation.
Done right, you can close the sale, repatriate funds, and move forward without unnecessary stress.