The Union Budget 2026 has introduced transformative changes for Non-Resident Indians (NRIs) regarding property sale proceeds repatriation. Under the revised Foreign Exchange Management Act (FEMA) regulations, NRIs can now seamlessly repatriate up to USD 1 million per financial year from the sale of up to two inherited or self-acquired residential properties. This represents a significant increase from the previous limit of USD 1 million for all purposes combined.
At Hashmi Law Associates (HLAPL), we have a dedicated NRI practice handling cross-border transactions, FEMA compliance, and tax matters. This comprehensive guide explains the 2026 repatriation rules, Form 15CA/CB requirements, capital gains tax implications, and the impact of Union Budget 2026 on NRI property transactions.
Key 2026 Changes for NRI Property Repatriation
| Parameter | Previous Rule | 2026 New Rule |
|---|---|---|
| Maximum Repatriation per FY | USD 1 million (combined for all purposes) | USD 1 million per property sale (up to 2 properties) |
| Number of Properties | Not specified (cumulative limit applied) | Up to 2 residential properties per NRI per lifetime |
| Type of Properties Covered | Self-acquired properties only | Self-acquired + Inherited properties |
| Holding Period for LTCG | 24 months | 12 months for inherited properties |
| TDS on NRI Property Sale | 20% on LTCG, 30% on STCG | 12.5% on LTCG (without indexation), 20% with indexation |
| Form 15CA/CB Threshold | ₹5 lakh for Form 15CA | ₹10 lakh for Form 15CA |
Understanding the USD 1 Million Repatriation Limit (2026)
The 2026 rules clarify and expand the repatriation framework for NRIs. Here is how the new limit works:
Key Provisions
- Per Property Limit: NRIs can repatriate up to USD 1 million per residential property sale (not per financial year combined). This means if you sell two properties in the same financial year, you can repatriate up to USD 2 million total.
- Lifetime Limit: The USD 1 million per property is available for up to two residential properties in the NRI's lifetime. For the third property onward, the general FEMA limit of USD 1 million per financial year (for all remittances combined) applies.
- Commercial Properties: The new limit applies only to residential properties. For sale of commercial properties, agricultural land, or plantation property, the general FEMA limit of USD 1 million per financial year continues to apply.
- Joint Ownership: If a property is jointly owned by two NRIs, each NRI can repatriate their share of the sale proceeds up to USD 1 million per person.
Inherited Properties: New Repatriation Rights
The most significant change in 2026 is the inclusion of inherited properties within the repatriation framework. Previously, NRIs faced significant hurdles repatriating sale proceeds from inherited properties. The 2026 rules change this.
Conditions for Inherited Property Repatriation
- The property must have been inherited through a valid will, succession certificate, or letter of administration
- The NRI must hold the property for at least 12 months from the date of inheritance before sale
- The property must be residential (house, flat, apartment, villa)
- The NRI must pay applicable capital gains tax in India before repatriation
- The original owner (deceased) must have lawfully acquired the property
Form 15CA and Form 15CB: Complete Guide
For any remittance from India abroad by an NRI (including property sale proceeds), Form 15CA and Form 15CB are mandatory under Income Tax Rules.
Form 15CA (Declaration by Remitter)
Form 15CA is a self-declaration by the NRI (or the buyer deducting TDS) that tax has been properly deducted and deposited. It is filed online through the Income Tax portal.
Form 15CB (Certificate by Chartered Accountant)
Form 15CB is a certificate issued by a Chartered Accountant certifying that the remittance is not chargeable to tax in India (or tax has been correctly deducted), the remittance complies with FEMA regulations, the remitter has a valid PAN and TAN, and the transaction is not designed to evade tax.
Step-by-Step Process for Form 15CA/CB (2026)
- Engage a Chartered Accountant – The CA reviews the transaction documents (sale deed, TDS certificates, tax returns)
- CA issues Form 15CB – The CA uploads Form 15CB on the Income Tax portal after verification
- NRI/Buyer files Form 15CA – Using the CA's certificate reference number, file Form 15CA online
- Bank processes remittance – The bank verifies Forms 15CA and 15CB before remitting funds abroad
- Remittance completed – Funds are credited to NRI's foreign bank account (typically within 3-5 working days)
Union Budget 2026: NRI Capital Gains Tax Changes
The Union Budget 2026 introduced several changes affecting NRI capital gains tax on property sales:
1. Reduced LTCG Tax Rate Option
For NRIs selling residential property, there is now a choice of LTCG tax calculation:
- Option A (Without Indexation): Pay 12.5% tax on the capital gain (no inflation adjustment)
- Option B (With Indexation): Pay 20% tax on the capital gain (with Cost Inflation Index adjustment)
NRIs can choose whichever results in lower tax liability. Typically, for properties held for 5+ years, Option B results in lower tax.
2. TDS Rate on NRI Property Purchase
For buyers purchasing property from NRIs, the TDS deduction rates have been clarified:
- LTCG property (held > 12 months): TDS at 12.5% of the sale consideration OR 20% of capital gains
- STCG property (held ≤ 12 months): TDS at 30% of the capital gain
- No TDS threshold: TDS applies on the entire consideration
Step-by-Step Guide to Repatriating Property Sale Proceeds (2026)
Step 1: Sale of Property
Execute the sale deed with the buyer. Ensure the sale deed clearly states that the seller is an NRI. The buyer must deduct TDS at the applicable rate and issue Form 16B (TDS certificate).
Step 2: File Income Tax Return
The NRI must file an income tax return in India for the financial year in which the property is sold. Even if no tax is payable, return filing is mandatory for repatriation.
Step 3: Obtain TDS Certificate (Form 16B)
The buyer provides Form 16B showing TDS deducted and deposited with the government.
Step 4: Engage a Chartered Accountant
The CA verifies all documents and issues Form 15CB.
Step 5: File Form 15CA Online
Using the CA's reference number from Form 15CB, file Form 15CA on the Income Tax portal.
Step 6: Approach the Bank
Submit documents to your bank including Form 15CA/CB, sale deed, Form 16B, ITR acknowledgment, passport and visa copies, foreign bank account details, and Form A2 declaration.
FAQs on NRI Property Repatriation 2026
Q1: Can I repatriate sale proceeds from inherited agricultural land?
No. The USD 1 million per property benefit applies only to residential properties. For agricultural land, the general FEMA limit of USD 1 million per financial year applies, and additional RBI approval may be required.
Q2: What is the time limit for repatriation after property sale?
There is no statutory time limit, but banks may refuse remittances for transactions older than 2-3 years. It is advisable to process repatriation within 6-12 months of the sale.
Q3: Can a Power of Attorney (POA) holder execute the repatriation on my behalf?
Yes. A specific POA for property sale and repatriation is recommended. The POA holder must submit the original POA or a notarized copy to the bank.
Q4: What is the difference between NRO and NRE accounts for repatriation?
NRE accounts are fully repatriable without restrictions. NRO accounts are subject to repatriation limits. Property sale proceeds MUST be credited to an NRO account first, then transferred to NRE or remitted abroad after tax clearance.
Q5: Are there special provisions for NRIs from UAE, Singapore, or UK?
Yes. India has Double Taxation Avoidance Agreements (DTAAs) with these countries. Capital gains tax may be lower or exempt depending on the treaty. NRIs must provide a Tax Residency Certificate to claim DTAA benefits.
How HLAPL Can Help NRIs with Property Repatriation
At Hashmi Law Associates (HLAPL), we have a dedicated NRI practice handling cross-border property matters. Our services include Repatriation Documentation with end-to-end assistance for Form 15CA/CB, bank documentation, and FEMA compliance, Tax Advisory for optimal tax planning for LTCG vs STCG, indexation benefits, and DTAA claims, Property Title Due Diligence for verification of title, encumbrances, and inheritance validity before sale, TDS Coordination liaison with buyers to ensure correct TDS deduction, Capital Gains Exemption advisory on Section 54/54EC/54F exemptions, POA Execution drafting and notarization of Power of Attorney for representation in India, and Inherited Property Succession legal assistance for succession certificates and mutation.
Contact our NRI legal experts in New Delhi for a consultation regarding property sale and repatriation.
Citation: DBS Treasures - Union Budget 2026 for NRIs | RBI Master Direction on FEMA (Updated March 2026) | Income Tax (15th Amendment) Rules, 2026