You've sold your Indian property. The money is sitting in your NRO account. Now comes the question everyone asks: how do I legally get this money abroad?
The Foreign Exchange Management Act (FEMA) governs exactly this. It's not as complicated as it sounds — but the paperwork is unforgiving if you get it wrong. Here's everything you need to know.
What is FEMA and Why Does It Apply to You?
FEMA (Foreign Exchange Management Act, 1999) regulates all cross-border transactions involving Indian residents and non-residents. As an NRI selling property in India, you fall under FEMA's purview the moment you want to move those sale proceeds out of India.
The good news: FEMA is permissive for genuine transactions. The RBI allows NRIs to repatriate property sale proceeds — within limits — as long as taxes are paid and the right paperwork is filed.
The USD 1 Million Annual Limit
This is the core rule. NRIs can repatriate up to USD 1 million per financial year (April–March) from their NRO account. This covers all sources — property sale, rent, inheritance, dividends — not just real estate.
If your property sale proceeds exceed USD 1 million, you can split the repatriation across two financial years. Plan your sale closing date accordingly — near the financial year end gives you maximum flexibility.
What this means in rupees (approximate)
At an exchange rate of ₹84/USD, the USD 1 million cap is approximately ₹8.4 crore per year. Most NRI residential property sales fall within this limit.
The Two Accounts You Must Have
Repatriation involves two specific types of bank accounts:
NRO Account (Non-Resident Ordinary)
- All India-sourced income — including property sale proceeds — must land here first
- Funds in NRO are NOT freely repatriable on their own
- Subject to Indian tax; interest earned is taxable in India
NRE Account (Non-Resident External)
- Fully repatriable — funds here can be sent abroad freely
- You transfer from NRO to NRE after fulfilling FEMA requirements
- Tax-free interest in India
Both accounts must be held with an authorised dealer bank in India (any major bank — HDFC, ICICI, SBI etc.).
Key Documents for Repatriation
Your bank will require these before processing the transfer from NRO to NRE and then abroad:
Form 15CA
Filed online on the Income Tax portal by you (or your CA on your behalf). It's a declaration of the nature of the remittance and confirms taxes have been paid. Required before your bank will process the transfer.
Form 15CB
A certificate from a Chartered Accountant that verifies the tax liability on the amount being remitted. The CA reviews your transaction, confirms FEMA compliance, and certifies the amount. Banks require this for remittances above ₹5 lakh.
Additional documents your bank will ask for
- Copy of the Sale Deed
- TDS payment challan (Form 26QB)
- Capital gains computation from CA
- Income Tax Returns for the year of sale
- NRO account statement showing credit of sale proceeds
- Passport copy and NRI status proof (visa, work permit, or overseas address proof)
The Residential Property Limit
FEMA has an additional restriction specifically for residential property: NRIs can repatriate proceeds from a maximum of 2 residential properties during their lifetime.
This lifetime limit of 2 properties applies only to residential property. For commercial property — shops, offices, plots — there is no such restriction, subject to the USD 1 million annual cap.
Inherited Property — Special Rules
If you've inherited the property (not purchased it), there are slightly different rules:
- You can repatriate up to USD 1 million per year from inherited property sales
- No limit on the number of properties if inherited (unlike the 2-property cap for purchased residential property)
- Succession certificate or Will may be required as proof
- Same Form 15CA/15CB process applies
Step-by-Step Repatriation Process
- Close the sale — sale deed registered, proceeds credited to NRO account
- File ITR — declare the capital gains in your Income Tax Return
- Engage a CA — for Form 15CB certification and tax computation
- File Form 15CA — online on the IT portal (Part C for amounts above ₹5 lakh)
- Submit to bank — Forms 15CA + 15CB along with supporting documents
- NRO to NRE transfer — bank processes within 2–5 working days
- Outward remittance — from NRE account to your foreign bank account
Common FEMA Mistakes NRIs Make
- Accepting cash from buyer — any cash component makes repatriation illegal. Insist on full banking transaction.
- Not maintaining ITR continuity — gaps in Income Tax Returns raise red flags with banks
- Using wrong Form 15CA part — there are 4 parts; using the wrong one causes rejection
- Missing the financial year — if sale closes in March, make sure repatriation happens before March 31st
- Not updating NRI status with bank — your savings account should already be designated as NRO; failing to update causes legal issues
Read also: How to Sell Property in India as an NRI — Complete Guide 2025