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There are so many non-resident Indians (NRIs) who have settled abroad and wish to sell a home, space, or land that they no longer need. It is a practical decision to liquidate the asset and minimise the liability associated with it. The sale of residential property incurs Capital Gains Tax for NRIs. The tax varies as per earnings through long-term capital or short-term capital.

Long-term capital gains, or LTCG, are investments that provide returns over time. It applies to all types of investments that generate earnings within 1 to 3 years. There is a short-term capital gain if the property is kept for less than 2 years. Property inheritance would be subject to the same tax consequences.

MPVD is a highly acclaimed tax consultancy firm in Kolkata that offers a wide range of mediation solutions for NRIs looking to sell their residential properties here. This blog demonstrates all the key aspects and priorities of capital gains taxation and other norms of the sale. 


The Typical Procedure for an NRI to Sell an Asset Property in India.

Below is a layout of the tax system for sellers and buyers. 

  • Seller: Long-term capital gains are taxed at 20%, while short-term profits are taxed at the applicable NRI income tax slab rates based on total taxable income in India. 
  • Buyer: When a resident Indian buys a property from an NRI, the buyer is required to deduct TDS at the rate of 20% on long-term capital gains (LTCG). If the property is sold before two years, 30% TDS will be deducted. Before deducting TDS, the buyer must get a TAN (Tax Deduction and Collection Amount Number).

In the case of sales of inherited property, the date of acquisition by the original owner is used to establish whether the capital gain is long-term or short-term. The price of the property will reflect the sum that the previous owner spent on it. 


What Documents Do NRIs Need to Sell Property in India

The first document that an NRI would need to sell a house in India is an identity verification document, which includes a passport, a Person of Indian Origin (PIO), or an Overseas Citizen of India (OCI) card. 

Once the identity verification is carried out, the seller will need the following documents to carry out the procedure: 


  • Sale Deed: This is the agreement paper legalising the transfer of ownership of a property and future transfers of property ownership. 
  • Title Deed: This is evidence of the ownership history of the property, including past transactions and encumbrances. It aids in the establishment of a clear title to the property.
  • Occupation Certificate: This is evidence that the seller has been an occupant of the house. 
  • Allotment Letter: This document gives the owner of the property or apartment formal power.
  • The Encumbrance Certificate: This document verifies that the property is free from any outstanding liabilities of loans, mortgages, liens, or legal claims

Even though the documentation needs are simple, the process of filing paperwork can get cumbersome for many NRIs trying to sell a house or other property in India. Many times, the sellers are unable to physically come to India to carry out the sales in person.

This is where we enter the picture. Being a respected provider of NRI tax consultation services in India, we assist many NRIs residing outside of India in meeting their tax obligations without having to come down to India.


The Tax Exemptions for NRIs Selling Property in India 

The Indian government has proposed two tax exemptions that will apply under the 54F and 54 EC Sections. The policy is summarized below.

Section 54F’s Property Sale Tax Exemption applies to long-term capital gains on the sale of any capital asset other than a dwelling. For this exemption, the NRI has two options.

  • Buy a home within one year of the transfer date or two years of the transfer date.
  • Construct a residential property within three years of receiving the capital asset.


The exemptions are only available if an NRI owns just one home property (apart from the new house) in India and does not intend to buy or build another house within the following two years. The new home must be in India and cannot be sold within three years of purchase or construction.

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