Selling property in India is the easy part. Getting the money abroad depends on how you originally paid for it, how much tax the buyer deducted, and whether your bank is satisfied with the paper trail. Here is the full route under FEMA and the Income-tax Act, 2025, including the PAN-based TDS change for buyers from 1 October 2026.

A client in New Jersey called me recently with a familiar problem. His Guntur flat had been sold, the buyer had deducted almost 15% of the entire sale price as TDS, the balance was sitting in his NRO account, and his bank wanted documents he did not know existed. The sale took three weeks. Getting the money to the US was heading towards three months.

That delay is almost always avoidable. Repatriation runs on two separate tracks. FEMA decides how much you are allowed to take out. The Income-tax law decides whether enough tax has been paid for the bank to release it. Clear both before the sale, and the bank has no reason to hold your money.

FEMA Decides How Much You Can Repatriate, Based on How You Paid for the Property

The governing law is Rule 29 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 read with the FEM (Remittance of Assets) Regulations, 2016, and RBI's Master Direction on Remittance of Assets. The first question your bank will ask is simple: what money bought this property?

What this means for you: In most cases the sale money lands in your NRO account first. The foreign-exchange portion goes back without touching the USD 1 million limit; everything else queues under it. That limit runs per financial year (April to March) and is shared with every other NRO remittance you make in the year, including rent, FD maturities and interest. If you sold a property in March, a part of the proceeds can wait for April and a fresh limit.

Two practical traps. First, if the property was bought on a home loan, EMIs repaid from your NRE account generally count as foreign exchange paid, while EMIs repaid from NRO rental income count as rupee funds. Your loan statement decides this, so keep it. Second, agricultural land, farm houses and plantation property cannot be bought by an NRI at all. If you inherited one, it can only be sold to a person resident in India, and the proceeds move only under the USD 1 million route.

Tax Deducted at Source, Where the Buyer Deducts First and You Settle Later

Under Section 393(2) [Table Sl. No. 17] of the Income-tax Act, 2025 (old Section 195), a buyer paying a non-resident seller must deduct tax at source. There is no ₹50 lakh threshold here; that applies only to resident sellers. And in practice, buyers deduct on the full sale consideration, not on your actual gain, because they cannot be blamed for over-deducting.

Long-term capital gains on property held for more than 24 months are taxed at 12.5% under Section 197 (old Section 112), without indexation for non-residents. The option to compute tax at 20% with indexation for property bought before 23 July 2024 sits in Section 197(3) and is available only to resident individuals and HUFs. Short-term gains are taxed at slab rates.

The fix for over-deduction: apply for a lower deduction certificate under Section 395 (old Section 197) in Form 128 (old Form 13) before the sale agreement is signed. Without it, the excess TDS stays with the government until your return is processed.

New from 1 October 2026: CBDT Notification No. 121/2026 dated 22 September 2026 (Income-tax (Fifth Amendment) Rules, 2026) removes the TAN requirement for resident individual and HUF buyers purchasing from non-residents. They can now deposit and report TDS through their PAN in Form 141, under a new Schedule E, within 30 days from the end of the month of deduction. The TDS certificate is issued in Form 132. This removes the most common reason deals stalled, but it also means you must check that the buyer reports your PAN and the TDS amount correctly. A wrong entry means no credit in your tax statement and a refund fight later.

If you plan to reinvest in another house in India, Section 82 (old Section 54) can exempt the gain. Just remember that money reinvested in India is, by definition, money you are not repatriating.

A Worked Example

Ravi, an NRI in the US, sells his Hyderabad flat in October 2026 for ₹1.50 crore. He bought it in 2016 for ₹70 lakh: ₹50 lakh from his NRE account and ₹20 lakh from his NRO account.

With a lower deduction certificate, Ravi can move his entire net proceeds in the same financial year. Without it, nearly ₹11 lakh waits for his Tax Year 2026-27 return to be processed.

Forms 145 and 146: The Bank's Final Checkpoint

For remittances made on or after 1 April 2026, Form 145 replaces Form 15CA (the online declaration filed by the remitter) and Form 146 replaces Form 15CB (the Chartered Accountant's certificate on taxability and TDS). For property sale proceeds, banks almost always insist on Form 146, because it is their comfort that the tax has been paid.

Transition point: If the sale happened before 1 April 2026, the capital gains and TDS are governed by the Income-tax Act, 1961 (Section 195, Form 13). The remittance form, however, depends on the remittance date. Some banks are still asking for both old and new references for such cases, so confirm with your bank before the CA certificate is drafted.

The Takeaway

Before you sign the sale agreement, do three things: pull together the funding trail of the original purchase, apply for a Form 128 certificate, and agree in writing with the buyer on how and when TDS will be deposited. Do that, and repatriation becomes a two-week bank process instead of a quarter-long argument.

CA Praneeth Thunuguntla | Thunuguntla & Associates | Income Tax & GST Advisory