Many NRIs are interested in buying properties in India as they see it as a long-term investment. Noida itself offers many good projects that non-resident Indians can consider for investment. If we talk about buying vs selling, which process is more difficult for NRIs then property selling is more difficult for NRIs in comparison to buying.
Selling property in India is generally more difficult for NRIs than buying property due to complex tax regulations (TDS, capital gains), documentation hurdles, and the need to repatriate funds. While buying is also complex and has restrictions (like no agricultural land purchase), the process is often more straightforward, as it involves standard procedures.
I have listed down a few pointers which NRIs must keep in mind:
NRO Account
- NRO Account – It’s compulsory to have a NRO account whenever you are going to sell your property. You can not take payment in your Indian account or in your NRE account. There are so many people who don’t have NRO account, so please have it in place before proceeding with the sale.
Tax Deducted at Source (TDS)
- TDS deduction of 12.5% – NRI should keep in mind that whenever they are going to sell the property there’s gong to be TDS deduction of 12.5%. The property buyer is responsible for deducting the TDS amount from the sale proceeds while transferring the sale proceeds to the NRI seller. Also buyer needs to obtain TAN to deduct TDS. For residents of India, it’s 1% if the property price is over 50 lacs.
- TDS is 12.5% for LTCG (Long-term Capital Gains) (after July 22, 2024) and 30% for STCG (Short-term Capital Gains), applied to the total sale value unless a lower deduction certificate is obtained.
Documentation and power of attorney (PoA)
- Proper documentation is essential for a smooth transaction. You need to have key documents in place like title deed, PAN card, passport, and recent tax receipts. If you are not able to present during the transfer then you need to appoint a specific person who can carry forward the transaction on your behalf, and that person will be identified as Power of Attorney (PoA). This PoA requires notarization and apostille in the NRI’s country of residence.
It’s very important to have a good realtor and CA with you who can guide you at every step and take things under their control wherever needed.
Let me know your thoughts on this, and you can also drop me a comment to discuss further.
