NRI Selling Property in India: Understanding the Required Bank Account and Tax Compliance

The Reserve Bank of India (RBI) mandates that individuals transfer all income originating from India to an NRO (Non-Resident Ordinary) account before sending it to their home country to ensure taxes are paid and monitor the flow of funds. As a non-resident Indian (NRI) trying to sell a property in India, it is essential to know what type of bank account to open to receive the proceeds of the sale. In this article, we will discuss the necessary steps you need to take to ensure a smooth transaction.

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The Reserve Bank of India (RBI) mandates that individuals must transfer all income originating from India to an NRO (Non-Resident Ordinary) account before sending it to their home country. This requirement is to ensure that taxes are paid and to monitor the flow of funds.

To open an NRO account, you will need to provide the necessary documents, including a copy of your passport and visa, proof of address abroad, and a PAN card. Once the account is open, you can start receiving funds from the sale of your property in India.

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Before you can transfer the money from your NRO account to your home country, you will need to obtain a Certificate of Tax Compliance (Form 15CA/15CB) from a chartered accountant. You have paid all taxes due on the sale of your property, and you may use this certificate to confirm it. The chartered accountant issues the 15CB form as a certificate, while you make a declaration of remittance using the 15CA form. You will need both forms to transfer the money from your NRO account.

The limit for transferring money from an NRO account is USD 1 million per year. If you need to transfer more than this amount, you will need to provide additional documentation to the RBI.

Summary

In summary, if you are an NRI trying to sell your property in India, you will need to open an NRO account to receive the proceeds of the sale. You will also need to obtain a Certificate of Tax Compliance (Form 15CA/15CB) from a chartered accountant before you can transfer the money to your home country. Make sure to keep all documentation organized and comply with RBI regulations to avoid any legal issues or delays in the transaction process.

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