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NRI’s Guide to Selling Property in India

If you are an NRI and wants to sell property in India then this is the guide you need. But keep in mind we are talking about properties purchased by a person either before or after he became an NRI, not acquire or gifted properties:
1.      Who is the Buyer?
An NRI can sell his residential or commercial property to either a person residing in India, another NRI or a person of Indian origin (PIO). He can also mortgage his property to an authorized real estate dealer or a financial institution dealing with home loans.
2.      Restriction
You cannot sell a property to another NRI or a PIO if it is agricultural land or a farming development, it can only be sold to an Indian citizen who resides in India.
3.      Tax Implications and Deduction
The tax liabilities for NRI selling property in India are as per the Foreign Exchange Management Act of India. According to this act, the main factors that contribute to the amount payable as tax are:
·         The capital gains determined by the date of sale of property
·         The value of the agreement based on the profit gained
·         Charges liable to society
·         Other pending loans

4.      Tax exemptions:
There two situations to Tax Exemptions, a) if you a sell a residential property after three years of purchase and reinvests the money in another residential property within two years from the date of sale, the profit generated is exempted to the extent of the cost of the new property. However, you can't use the sale proceeds from an Indian property on a foreign property and still claim the exemption. 
5.      Repatriation of Indian Property
An NRI selling property in India is subjected to a list of generic terms and conditions while repatriating a property inherited from an Indian resident. Once these conditions are met, NRIs can go ahead with the process of repatriating the sale proceeds without the permission of the Reserve Bank of India. On the other hand, if the NRI has inherited the property from someone who is not of Indian origin, they will need to seek permission from the Reserve Bank of India.



The information provided in this article is generic in nature and for informational purposes only. It is in no manner can act as a substitute for specific advice in your own circumstances. We strongly recommend you to seek professional guidance pertaining to your query or doubt.

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