Repatriating Land Sale Proceeds from India: NRI Guide

The First Question: How Did You Acquire the Land?

Every repatriation conversation starts with the origin of the asset, because the Reserve Bank of India treats different origins differently. There are broadly three cases that matter for farmland and farmhouse sellers.

• Land bought while you were a resident. If you purchased the plot before you became a non-resident, you acquired it as a resident, paid in rupees, and the sale proceeds belong in the rupee system. Proceeds are normally credited to your NRO (Non-Resident Ordinary, rupee) account.
• Land inherited from a person resident in India. NRIs and persons of Indian origin cannot generally buy agricultural land, plantation property or a farmhouse, but FEMA allows them to inherit it. Our guide on inheriting agricultural land as an NRI covers the ownership side. For repatriation, the practical consequence is that an inherited plot is a rupee asset: sale proceeds go to the NRO account and then fall within the annual remittance facility discussed below.
• Land bought while you were a non-resident. Because the general rule bars NRIs from buying agricultural land, this case is uncommon for farmland. Where it arises, usually through an acquisition that was permitted at the time or for non-agricultural property, the rules on remitting the original foreign-exchange purchase amount are different, and you should take specific advice. Our guide on whether NRIs can buy agricultural land explains the underlying restriction.

Documents that prove the origin matter as much as the category: a registered sale deed, or for inherited land a will, probate or family settlement plus mutation entries in your name. See mutation after death for how record updating works.

The same origin question decides who you may sell to. FEMA lets an NRI transfer agricultural land, a farmhouse or plantation property only to a person resident in India who is a citizen of India. A sale to another NRI or a foreign national is not a permitted route, regardless of price, so check the buyer before you check the bank.

The Annual Ceiling and the Account Route

The central rule most NRIs hear about is the USD 1 million limit. In summary, an NRI or a person of Indian origin may remit up to USD 1 million per financial year (April to March) out of the balance in their NRO account. That balance can include sale proceeds of assets acquired by inheritance or legacy, and the facility is separate from the amounts that may be sent abroad out of a NRE (Non-Resident External) account, which holds foreign-currency-sourced money and is fully repatriable. The ceiling is described in the RBI directions on remittance of assets issued under FEMA. Confirm the current wording in the latest RBI Master Direction before you plan a large transfer, as limits and conditions have been amended over time.

Three practical points follow from this structure.

• The limit is annual, not per property. If you sell two plots in the same financial year and also remit funds from other NRO balances, all of it counts against one ceiling. Many sellers with larger proceeds therefore spread the remittance over more than one financial year, which is lawful provided the tax and documentation steps are complete each time.
• Where the money sits matters. Sale proceeds should be received into your NRO account by banking channel. Cash receipts, or payments into a relative’s account, make later remittance difficult to evidence. Our sale deed guide explains why the consideration should be recorded accurately and paid by traceable instruments.

For the wider legal setting, see FEMA 1999 and Indian land.

Is the sale taxable at all?

Under the Income-tax Act, 1961, rural agricultural land is not a capital asset, so a sale of such land typically does not produce taxable capital gains. Agricultural land located within specified distances of a municipality or cantonment board, banded by population, is treated as a capital asset. The definition, its distance bands and its placement in the Income-tax Act, 2025, which applies from 1 April 2026, should be checked against the current text, and the status of a particular plot depends on its precise location. Our article on capital gains on agricultural land sets out how exemptions such as Section 54B are used by resident sellers, and why their availability to NRIs should be checked individually.

Withholding by the buyer

When the seller is a non-resident, the buyer is required to deduct tax at source on the amount that represents income chargeable to tax, under Section 195 of the 1961 Act, at the rates in force, plus surcharge and cess. This is a different regime from the one-per-cent withholding on resident sellers that our guide to TDS under Section 194-IA explains. The buyer needs a Tax Deduction Account Number (TAN) for this, and usually deposits the tax and furnishes the certificate to the seller.

Because the withholding is computed on the full consideration unless a lower rate is certified, it can exceed the seller’s real tax liability. The usual remedy is an application to the income tax department for a lower or nil deduction certificate, made before the sale is completed. The form and the section carrying this application changed when the 2025 Act took effect, so confirm the current form on the Income Tax Department portal at incometax.gov.in. If excess tax has already been deducted, it can be claimed back through the NRI’s tax return, which also means the seller must hold a PAN.

Valuation and the circle rate

If the registered price is lower than the state circle rate, the tax computation can treat the higher value as the sale consideration. Read circle rate versus market rate before you agree a price with the buyer, because the registered price drives both the stamp duty and the tax figure.

The Remittance Paperwork

Once the tax is settled and the money is in your NRO account, you apply to your authorised dealer bank to remit it. For a long time the paperwork consisted of a Form 15CA, in which the remitter declares the details of the payment and the tax position, and for larger taxable remittances a Form 15CB, a certificate from a chartered accountant. Reports indicate that with the Income-tax Act, 2025 these forms have been renumbered, with Forms 145 and 146 taking the place of 15CA and 15CB for remittances from 1 April 2026. Banks may still refer to the old names in conversation, so ask your branch which form it expects and confirm the latest procedure on the Income Tax Department portal.

Documents you should expect to produce, whichever form numbers apply:

1. The registered sale deed and the document that shows how you originally acquired the land.
2. Proof that the consideration was credited to your NRO account, such as bank statements.
3. Evidence of tax paid or deducted: the TDS certificate, any lower-deduction certificate, and proof of tax paid on capital gains if the sale was taxable.
4. A chartered accountant’s certificate on the tax treatment, where the form requires it.
5. For inherited land, the will, probate, succession certificate where applicable, or family settlement, and the mutation record.

If you need someone in India to handle the registration and follow up the bank formalities, a Power of Attorney is the usual tool, and our guide on Power of Attorney for NRI land transactions covers what it can and cannot do. Do not let a general PoA holder receive the sale money into their own account.

Where Remittances Get Stuck

• Title and mutation gaps. If the land is still recorded in a deceased relative’s name, the buyer’s lawyer will insist on mutation, and the bank will want to see your link to the property. Our title verification guide shows what a buyer will check, which is also what you should prepare.
• Price below circle rate. A deliberately low registered value can lead to a higher tax computation and a mismatch between what the bank sees and what was actually paid.
• Assuming agricultural proceeds follow property rules. The two-property and original-cost conditions that appear in general NRI articles relate to residential property bought with foreign exchange. Do not apply them to inherited farmland without advice.

A clear order of operations avoids most of this: confirm status and title, agree the price against the circle rate, apply for the lower-deduction certificate if appropriate, collect the proceeds into the NRO account, obtain the tax evidence, and only then approach the bank. Remittance decisions affect your tax in more than one country, so a chartered accountant who works with NRIs should review your numbers before you transfer.

Frequently Asked Questions