Selling property in Hyderabad as an NRI: tax and repatriation rules

When you sell a property in Hyderabad as an NRI, the sale itself works the same way as a resident's. The money side does not. The buyer has to deduct tax at a much higher rate before paying you, and taking the proceeds out of India has a limit and its own paperwork. Sort both out before you sign the agreement, because some of the steps cannot be done afterwards.

Capital gains tax

The tax is on your profit, and the rate depends on how long you held the property.

• Held 24 months or less: the gain is short-term and taxed at your income tax slab rate.
• Held more than 24 months: the gain is long-term. For sales on or after 23 July 2024 the rate is 12.5% without indexationplus surcharge and cess.

You will still see 20% with indexation quoted. That rule changed in July 2024, and indexation is no longer available to NRIs. Have a chartered accountant work out your figure before you agree a price.

TDS: what the buyer deducts

A buyer purchasing from an NRI must deduct tax before paying you. The rate is 12.5% plus surcharge and cess where your gain is long-term, and 30% plus surcharge and cess where it is short-term.

The deduction is normally worked out on the sale price, not on your gain. That can be a large sum held back even when your actual profit is small. There are two ways to deal with it:

• Before the sale, apply to the income tax department for a lower deduction certificate, so the buyer deducts only what you are likely to owe. This takes time, so start early.
• Or let the full amount be deducted and claim the excess as a refund when you file your Indian tax return.

Buyers who have never bought from an NRI often do not know these rules. Tell them at the start.

Reducing the tax

Two exemptions are open to NRIs on long-term gains:

• Buying another house in India. Reinvesting the gain in a residential property in India can exempt it (Section 54 of the Income-tax Act, 1961).
• Capital gains bonds. Investing the gain in notified bonds within six months of the sale exempts up to ₹50 lakh (Section 54EC). The money is locked in for five years. The bonds are currently issued by REC, PFC and IRFC. NHAI, which older articles mention, no longer issues them.

The Income-tax Act, 2025 took effect on 1 April 2026 and renumbered these sections. The exemptions continue, but your CA will quote new section numbers, so check the conditions and time limits against the current law.

Taking the money abroad

The sale proceeds are credited to your NRO account. From there, RBI allows you to remit up to USD 1 million per financial yeara ceiling that covers all your NRO balances and asset sale proceeds together.

If you originally bought the property with foreign exchange sent through banking channels, RBI permits repatriation up to the amount you paid in that way. This facility applies to no more than two residential properties.

Your bank will ask for:

• The sale deed and proof of how you acquired the property
• A chartered accountant's certificate in Form 15CB and your declaration in Form 15CA (renumbered Form 146 and Form 145 under the new income tax rules)
• PAN and proof of NRI status

Speak to your bank before the sale closes. Each bank has its own checklist, and a missing paper can hold the remittance for weeks.

Where sales go wrong

• The buyer does not deduct TDS correctly. That leads to penalties and holds up your remittance.
• The proceeds are routed to the wrong account. Sale money goes to NRO unless your bank confirms part of it qualifies for NRE credit.
• The 15CA and 15CB paperwork is left until the day you want to remit.
• Nobody looked at the exemptions until the six-month window for bonds had closed.

Keep the sale agreement, payment receipts, TDS certificates and bank confirmations together. You will need them for the tax return and the remittance.

relai advises buyers and is not a tax adviser, so use a chartered accountant for the tax and repatriation work. If you plan to put the proceeds into another home in Hyderabad or Bangalore, a relai advisor can help you shortlist projects.