An NRI can sell his property, purchased by him, to anyone who is an Indian without any restrictions. In case the Buyer is a Foreign Entity or a Foreigner, there are certain approvals that are required to be taken.

In case of sale of Agricultural land and plantations, there are some restrictions, else in general, there are no restrictions unless specific to the said nature of the property.

Yes, an NRI can sell an inherited property in India and also transfer the funds overseas. The Tax implication will depend on the nature of the property, the time of inheritance and the supporting documents available for the property.

There are some restrictions for specific property, like Plantations and Agricultural land, where there may be an approval required before selling.

Due to COVID, many NRI’s have not been able to travel to India. You can facilitate your property purchase or sale in India, without visiting India, by using a POA (Power of Attorney).

Your POA, who can be a relative or a friend, based in India, or a Corporate, on whom you have confidence, can sign on your behalf and get the payment credited to your account and you will not be required to travel to India for the entire process.

Moreover, in most states of India, the POA, can be executed remotely, without coming to India.

The value of a property is very dynamic in India. You can have 2 apartments in the same building but commanding different prices. The eventual pricing depends on multiple variables like; floor number, direction of the flat, Vaastu friendly, etc.

Hence, if you are selling a property it is very important to know the fair market value of the property before putting it on sale, especially if you haven’t been abreast with the property market for a long time. This fair valuation can be done officially through a Government Approved Valuer or you can take indicative prices from your neighbours, family or friends or brokers.

The pricing of the property is done on a per sq. ft. basis for buildings and flats and on a per sq. meter basis for land.

The Tax implication depends on the nature of the property and the holding period and the source of the property, i.e. if it is purchased by self or inherited or gifted and the sale price.

In general the Gross Tax for property held for a Long Term is 20% and for Short Term is 30%.

However, there are certain other Taxes, like Cess and Surcharge which can have a marginal increase in Taxes in India.

As an NRI, there is a withholding Tax or a TDS (Tax Deducted at Source) for property sale in India @ 20% (Gross) for Long Term and 30% (Gross) for Short Term. Hence, if you have purchased a property for say Rs. 4.5 crore and are selling it at Rs. 5 crore, your TDS will be Rs 1 crore (@20%), which ends up blocking part of your principle amount.

You need to apply for a Tax Exemption Certificate, to avoid this high %’age of TDS and the application and certification needs to be done before you make the sale. It takes about 30-45 days and some on the ground work to eventually get this certificate from the ITD.

The Penalty can be more than 100% and also run a risk of being a criminal offence and hence it is highly recommended not to take a short cut on the TDS compliance. With the previous example, if you have purchased a property for say Rs. 4.5 crore and selling at Rs. 5 crore, your TDS will be Rs 1 crore and penalty will be Rs 1 crore (in case the TDS compliance is not done accurately and timely).

The Capital Gains (CG) Tax is applicable only on the profit you make. Determining the profit for an inherited or gifted property will require professional assistance.

There are many methods to save the CG Tax, like reinvestment in residential property, capital gains Bonds, Capital Gains Accounts and certain specified Equity stocks among others.

However, at times it may be more beneficial to pay the tax rather than use the instruments to save tax. This can be better understood by doing a scenario A/B analysis and also opportunity cost analysis to arrive at a decision.

If you are an NRI and when you are selling property in India you may liable to tax in India as well as in the USA (assume you are an NRI based in USA). Hence you may end up paying a substantial amount of sum in Taxes. Under DTAA, you can avoid or reduce paying Tax in US by taking credit of the Taxes paid in India.

Moreover, the Capital Gains Calculation in India is different from USA and there would be certain exemptions applicable in India but not in USA and vice versa. Hence its very important to take the benefit of all the exemptions to reduce your Tax outgo in both the countries.

Due to COVID, many NRI’s are not able to travel to India. You can facilitate transferring of your funds from the property sale, without visiting India, by using a POA (Power of Attorney).

To transfer Funds out of India, you need quite a few documents, one of which is a 15Ca and 15 CB Certificate with is issued by a certified Accountant in India. This certificate is issued after the Indian Accountant has gone through your documents and determined the source of funds, tax liability, legality of transfer under various laws in India.

Due to COVID, many NRI’s have not been able to travel to India. You can facilitate transferring of the funds from your property sale in India, without visiting India, by using a POA (Power of Attorney).

It is absolutely necessary to file your Tax Returns in India, if you sell any property in India. Many NRI’s make this mistake of not filing Tax Returns in India which can lead to compliance and legal issues.

Any amount can be remitted abroad, just that the level of approvals and documentation are different.