The sale is done. The registration is complete. The buyer has transferred the money. And then the bank asks for a CA certificate, a source-of-funds trail, a Form A2 and a declaration you have never heard of — and the funds sit in India for another six weeks.

This is the most common point of frustration for NRI sellers, and it is almost always avoidable. Repatriation has two independent locks. FEMA decides how much can leave India. The Income Tax Act decides whether it is allowed to leave at all — because no authorised dealer bank will release foreign exchange until tax compliance is demonstrated on paper.

Step one: the money must land in the right account

Sale consideration from an Indian buyer is rupee funds. It goes into your NRO account. It cannot be credited directly to an NRE account, and no bank will do it.

From the NRO account, the money moves out by one of two routes, and which route you get depends entirely on how you originally acquired the property — not on where you live today.

What this means for you: the "full repatriation" route is narrower than it sounds. If you brought in USD 200,000 to buy a Bengaluru flat in 2014 and sell it today for the rupee equivalent of USD 500,000, only USD 200,000 travels on the free route. The balance — your entire gain — falls back into the USD 1 million annual NRO bucket.

And that USD 1 million cap is aggregate, not per transaction. Rent you remitted in June, NRO interest you sent in September and sale proceeds you remit in January all draw from the same limit, tracked against your PAN across all your NRO accounts. Joint owners each get their own cap, which is why joint holding is worth structuring before the sale, not after.

There is one grey area worth stating plainly. RBI's own FAQ position on property acquired under Section 6(5) of FEMA — property you held when you were a resident — says repatriation of sale proceeds requires RBI approval. In practice, banks process these remittances under the Remittance of Assets Regulations within the USD 1 million limit. Both readings are defensible. If your bank raises the Section 6(5) point, do not argue it at the counter; route the request through the AD bank to RBI with the acquisition trail attached.

Step two: the tax clearances that actually gate the transfer

For sales on or after 1 April 2026, TDS on payments to a non-resident sits in Section 393(2), Table 2, Sl. No. 17 of the Income-tax Act, 2025 (the erstwhile Section 195 of the 1961 Act). The buyer must deduct.

The problem is the base. The buyer deducts on the gross sale consideration, not on your gain, because he has no way to verify your cost. On a long-term sale (held over 24 months), that is 12.5% plus surcharge and 4% cess on the entire sale value. Note also that the 20%-with-indexation election that the Finance (No. 2) Act, 2024 preserved for resident individuals and HUFs is not available to non-residents. You pay 12.5% without indexation, full stop.

The fix is a lower deduction certificate under Section 395(1), applied for in Form No. 128 under Rule 213 of the Income-tax Rules, 2026 (previously Section 197 and Form 13). The Assessing Officer computes your actual gain and certifies the rate. On a ₹1.5 crore sale with a ₹35 lakh gain, this is the difference between roughly ₹19 lakh withheld and roughly ₹4.5 lakh — cash locked up for a year versus cash in hand.

Apply before the sale deed is executed. Once the buyer has deducted on gross value, your only remedy is a refund claim in your return, and refunds do not fund your remittance.

Step three: the forms that stall the wire

From 1 April 2026, the familiar remittance forms have been renumbered under the Income-tax Rules, 2026:

Form 146 is required where the taxable remittance exceeds ₹5 lakh in a financial year and no AO order has been obtained — which covers virtually every property sale. Alongside these, your bank will require Form A2, now mandatory for every cross-border remittance regardless of value following AP (DIR Series) Circular No. 13 dated 5 July 2024.

One clarification that saves a lot of confusion: TCS under the Liberalised Remittance Scheme does not apply to you. LRS is for resident individuals. An NRI repatriating from an NRO account is outside it entirely.

A change worth timing your sale around

The Finance Act, 2026 has amended Section 397(1)(c) of the Income-tax Act, 2025 to remove the TAN requirement for a resident individual or HUF buying immovable property from a non-resident. The buyer will deposit TDS on a PAN-based challan-cum-statement instead. This takes effect from 1 October 2026 — it is enacted but not yet in force as of today, so any deal closing before that date still runs on the existing TAN route. If your buyer is stuck waiting on TAN allotment and the transaction can breathe for a few weeks, waiting is now a rational choice.

The documents to assemble before you approach the bank

Sale deed and registration receipt; purchase deed with proof of the original source of funds (FIRC or NRE/FCNR debit advice for the full-repatriation route); Form 128 certificate if obtained; Form 131 from the buyer; Form 146 from your CA; filed Form 145 acknowledgement; Form A2; PAN linked to Aadhaar or validly exempted; passport and visa or OCI card. For inherited property, add the will, probate or legal heir/succession certificate and the deceased's acquisition documents.

The takeaway: Apply for the Section 395(1) certificate in Form No. 128 before you sign the sale deed, and check how much of your USD 1 million annual cap is already consumed by rent and interest remittances made earlier in the financial year. Those two steps, done in that order, are what separate a three-week repatriation from a three-month one.

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