- Sale proceeds can be repatriated out of India subject to RBI Liberalised Remittance Scheme (LRS) limits.
- Annual cap: USD 1 million per financial year across all asset classes.
- Proceeds from property bought in INR (from NRO account) face repatriation restrictions; proceeds from NRE-purchased property have fewer restrictions.
- TDS at 20% (plus surcharge and cess) withheld on long-term capital gains before repatriation.
The two scenarios
(1) Property originally bought from foreign inward remittance via NRE account: sale proceeds in rupees can be converted and remitted abroad up to USD 1 million/year, subject to capital gains tax. Minimal documentation beyond standard DTAA and CA certificate. (2) Property bought from NRO account or rupee funds: repatriation restricted to USD 1 million/year cumulative across all NRO-sourced funds. Need 15CA/15CB from a CA.
The TDS trap
For long-term capital gains (property held 24+ months), TDS is 20% of GAIN, not sale value — but only if the buyer correctly computes indexed cost. In practice, buyers withhold TDS on sale value by default, over-withholding. Claim refund when filing ITR in India the same year. This creates a 6-12 month cash-flow gap — plan for it.
DTAA relief
If you’re tax-resident in a country with a Double Tax Avoidance Agreement (US, UK, UAE, Singapore, etc.), you get credit in your residence country for India TDS paid. Without DTAA claim, you pay tax twice — once in India, once in residence country. File Form 10F + TRC (Tax Residency Certificate) to claim DTAA benefits at source.
FAQs
How long does repatriation take?
Can I split the repatriation across years to stay under the USD 1M cap?
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