NRI/PIO/OCI - Repatriation of funds from Bank account & after sale of property

Updated on Jan 16, 2020

Repatriation of funds from sale of property in India is not at all challening. A meticulous planning can make it very easier.

NRIs/OCIs are permitted repatriation of funds up to USD 1 million per financial year from NRO account subject to tax compliance. The limit of USD 1 million includes sale proceeds of up to two immovable properties held by NRIs/OCI.

Documentary proof evidencing source of money is required when transferring money abroad and that must first be deposited in an NRO bank account and tax compliance must be completed before repatriation.

Planning steps:

• If you have an ordinary bank account opened before you became NRI/OCI, then please issue necessary instructions to your banker to convert the same into NRO account. You may also open a new NRO account.
• Consult the buyer of your property or broker/agent about tax withholding (TDS) out of sale proceeds of your property.
• Consult a Chartered Accountant (CA) in India to get a draft calculation of ‘Capital Gain Tax’ (Long Term Capital Gain or Short Term Capital Gain) based on cost of acquisition of the property and proposed sale consideration.
• Should you find the amount of TDS is high (compared to estimated Capital Gain Tax), plan getting a ‘Lower Tax Deduction Certificate. Your CA may help filing it online.
• Your CA will guide you with the documentation required to be filled to take back the money from the sale of your property back to your home country.
• Once the money is available in your NRO Account and ready to repatriate, the documents required include Sale Agreement of your property, Form 15 CA & 15CB, FEMA Declarations along with signed forms, which your bank will provide you.
• A copy of your PAN Card, sale agreement, purchase agreement, tax paid challans and other details will be required by your CA to file Annual Income Tax Return (ITR) at the due dates and claim refund of access tax paid, if any.

You can contact Shashi Mohan, the author of this article, at shashi.m@excelorindia.com. Shashi Mohan's linkedin profile is https://www.linkedin.com/in/shashimohan.