Selling Inherited Property in India as an NRI: Step-by-Step

Selling land or a house you inherited in India is very doable from abroad, but the order of steps matters. Get the paperwork and tax planning done before you sign an agreement with a buyer, and the sale is usually smooth. Rush it, and money can end up stuck in TDS or in an account you cannot easily move.

Can an NRI sell inherited property in India?

Yes. An NRI or OCI can sell inherited property, but who can buy depends on the type of property. Houses, flats and non-farm plots can be sold to a resident Indian, an NRI or an OCI.

Agricultural land, plantations and farmhouses are different. Under FEMA, an NRI or OCI can sell these only to an Indian citizen who is resident in India. Our explainer on whether NRIs can buy agricultural land covers the full set of rules.

What are the steps to sell inherited property as an NRI?

Here is the usual order. Your lawyer and chartered accountant (CA) may adjust it, but skipping ahead tends to cause delays.

1. 1

   Confirm the title chain and the mutation

   Collect the documents that show how the property came to the family and then to you: the original sale deed, the will and any probate, or legal heir papers. Check that the land record has been mutated into the heirs' names. A buyer's lawyer will look for exactly this.
2. 2

   Line up every co-heir

   Each legal heir either signs the sale deed as a co-seller or first gives up their share by a registered relinquishment deed. A verbal "yes" from a sibling is not enough.
3. 3

   Get your tax papers ready

   You need a PAN. Work out the capital gain with a CA, and decide whether you will reinvest to claim an exemption.
4. 4

   Apply for a lower-TDS certificate

   Once a buyer and price are agreed, apply online in Form 128 so the buyer deducts tax only on the real gain.
5. 5

   Sign, or authorise someone to sign

   Sign the sale deed in person at the sub-registrar's office, or give a trusted person a narrow power of attorney for this one sale.
6. 6

   Receive the money into your NRO account

   The buyer pays into your NRO account after deducting TDS, and gives you the TDS certificate.
7. 7

   Repatriate and file your return

   Send the money abroad with Forms 145 and 146, and file an Indian income tax return to report the gain and claim any refund.

Why do the title chain and co-heirs' consent matter before you sell?

Because a buyer is buying your right to the property, and that right has to be clear on paper. If the land record still shows a grandparent, or one of four siblings is missing from the heirs' list, most buyers and banks will walk away or cut the price.

Inheritance mutation updates the government revenue record to show the heirs. It is not proof of title by itself, but it is the first thing a buyer checks. If it has not been done, start there; a list of the documents needed for mutation after a death shows what your tehsil will usually ask for.

Also get an encumbrance certificate to show there are no loans or charges registered against the property.

How do co-heirs give consent to the sale?

There are two common ways. Every heir can join the sale deed as a seller and receive their share of the price directly. Or heirs who do not want to be involved can give up their share, usually to the heir who will sell, by a registered relinquishment deed.

The second route is simpler at the registry, but it has tax and family consequences. Our comparison of gift deed, will and relinquishment deed explains them.

How much TDS will the buyer deduct, and how do you reduce it?

When the seller is a non-resident, the buyer must deduct tax at source under section 393(2) of the Income-tax Act, 2025 (section 195 of the 1961 Act). For long-term gains the rate is 12.5% plus surcharge and 4% cess. Because the buyer cannot verify your cost, they usually deduct it on the full sale price.

On a sale of ₹1 crore, that is about ₹14.3 lakh held back even if your actual gain is much smaller. The TDS on NRI property sale calculator shows the figure for your price.

The fix is a lower-TDS certificate. Under the old Act this was section 197 and Form 13. Since 1 April 2026 it is section 395 of the Income-tax Act, 2025, and you apply online in Form No. 128. The certificate tells the buyer to deduct on your actual gain instead. It takes time to process, so apply as soon as the price is agreed.

How is capital gains tax worked out on inherited property?

You pay tax on the gain: the sale price minus the previous owner's cost. If they acquired it before 1 April 2001, you can use its fair market value on that date instead. The previous owner's years of holding count as yours, so the gain is almost always long-term.

Residents may be able to choose 20% with indexation for property acquired before 23 July 2024, but that option does not apply to NRIs. Try your figures in the capital gains on inherited property calculator.

What if the land is rural agricultural land?

Rural agricultural land is not a capital asset under Indian tax law, so selling it does not create a capital gain. Whether your land counts as rural depends on its distance from the nearest municipality and that town's population. Keep proof of the land's status, because the buyer will still deduct TDS unless you show them a nil or lower-TDS certificate.

Can you reduce the tax by reinvesting?

Often, yes. Common routes include buying a residential house in India (section 54 of the 1961 Act, now section 82) and investing up to ₹50 lakh in specified bonds within six months (section 54EC, now section 85). The capital gains exemption calculator helps you compare them. Plan these with a CA before the sale, because the time limits are strict.

Can you sell without travelling to India?

Yes, through a power of attorney. You give a trusted person authority to sign and register the sale deed for you. Sign it before an Indian embassy or consulate, or notarise and apostille it locally, and expect it to be stamped once it reaches India.

Keep it narrow: one property, one sale, a clear end date, and no power to receive the money into anyone else's account. Our guide to power of attorney risks explains what to avoid.

How do you send the sale money abroad?

The price goes into your NRO account. From there, you can usually send up to USD 1 million per financial year abroad, covering sale proceeds and inherited assets, once tax is paid.

Your CA certifies in Form 146 that tax has been paid, and you file Form 145 online before the bank sends the money. These replaced Forms 15CB and 15CA from 1 April 2026. The NRI repatriation calculator shows how many years a larger amount will take.

Finally, file an Indian income tax return for the year of sale. That is how you report the gain, claim any exemption and get back any excess TDS.

What should you do while the sale is in progress?

Keep an eye on the property. Sales can take months, and an empty plot with a known "for sale" status can attract encroachers or false claims that scare off a buyer. PlotPehra watches your plot on every clear satellite image and, in 19 states, checks the land record every week, so a false claim or an unexpected mutation surfaces before the buyer's lawyer finds it. A real person explains any change by email and WhatsApp, so you can tell your buyer with confidence that the land is as described.

This article is general information, not legal or tax advice. Tax figures were last checked on 24 September 2026. Talk to a local property lawyer and a chartered accountant before you agree a sale.