Selling property in India as a Non-Resident Indian (NRI) can be a civilized process if you follow the proper steps. Whether it’s a property you’ve owned or NRI inheriting property in India, understanding the legalities and documentation involved is key. This guide breaks down the process into easy-to-follow steps, ensuring you make informed decisions and avoid unnecessary complications.

1. Verify Ownership And Gather Documentation-

Before you initiate the sale process, confirm that you have all the necessary documents ready. This is especially important for NRIs selling property in India, whether the property was purchased or inherited.

• Property Title Documents: Ensure the property is legally registered in your name.

• NRI Inheriting Property In India: If the property was inherited, you need to have a legal will or succession certificate to prove ownership.

• Encumbrance Certificate: This is crucial to ensure the property is free from any legal or financial claims.

Having these documents confirms that you have clear control and there is no controversy regarding the property title.

2. Preparing The Sale Deed Agreement-

The Sale Deed Agreement is the core of any property transaction. It outlines the terms of the sale, including the sale price, the buyer’s details, payment method, and the transfer of ownership.

If you’re NRI selling an inherited property in India, the sale deed should include a clause that indicates you have legal rights to sell the property, backed by the appropriate inheritance documents. You must also specify the terms of payment, the timeline for the transfer of possession, and any liabilities the buyer assumes once the sale is completed.

3. Legal Clearances And Checks-

Before finalizing the sale, perform some crucial checks:

• Litigation Check: Ensure the property is free from any legal disputes. A simple litigation check at local courts or online records can save you from unwanted surprises.

• Property Tax Clearance: Ensure there are no outstanding dues. The buyer will want to ensure they aren’t inheriting unpaid property taxes.

These checks help avoid disputes and confirm that the property is clean and ready for sale.

4. Signing And Witnessing The Sale Deed Agreement-

Once all the documents are in place and the terms are agreed upon, it’s time to sign the Sale Deed Agreement. Both parties—buyer and seller — should sign the agreement in the presence of at least two bystanders to validate the transaction.

If you’re an NRI and cannot be physically present in India, you can provide a Power of Attorney (PoA) to someone you trust in India to sign the documents on your behalf. This can be especially useful for NRIs selling property in India while living abroad.

5. Register The Sale Deed-

A critical step in the sale process is the registration of the Sale Deed Agreement with the local sub-registrar office. This makes the transaction legally binding. Both parties must be prevalent at the registration office to sign the necessary documents unless the seller has given a PoA.

For NRIs, the Sale Deed Agreement registration in India can also be done via PoA, where the designated representative handles the registration process on your behalf. Once registered, the property is officially transferred to the buyer, and you can legally proceed with the sale.

6. Tax Implications For NRIs Selling Property-

NRIs selling property in India need to consider the tax implications:

• Capital Gains Tax: based on the duration of ownership, the property sale may attract short-term or long-term capital gains tax. Short-term capital gains tax (if the property is sold within two years of purchase) is taxed at 15%, while long-term capital gains tax (if the property is sold after two years) is taxed at 20% with indexation benefits.

• Tax Deducted At Source (TDS): When selling property, the buyer needs to reduceTDS on the sale amount before making the payment to the seller. As an NRI, TDS is typically deducted at 20% on long-term capital gains.

Ensure you understand these taxes and plan accordingly, as they will affect your net proceeds from the sale.

7. Receiving The Sale Proceeds-

Once the property is registered and the transaction is complete, the sale proceeds will be transferred to you. As an NRI, you can have the funds transferred abroad or have them deposited in your Indian bank account. The Reserve Bank of India (RBI) allows NRIs to remit funds abroad via the Liberalized Remittance Scheme (LRS).

If you plan to send the funds abroad, make sure that you follow the correct procedures and comply with the relevant foreign exchange regulations.

Simplifying The Process For NRIs

Selling property in India as an NRI involves several important steps, but with the right documentation and legal support, the process can be smooth and hassle-free. Whether you’re selling a property you purchased or NRI inheriting property in India, it’s essential to ensure that all legal checks are done, the sale deed is properly executed, and taxes are paid on time.

For NRIs, platforms like India for NRI offer useful resources to understand the legal framework and ensure that your property transaction complies with Indian laws. By following these steps, you can confidently navigate the complexities of property sales in India, ensuring a secure and successful transaction.

Also Read: Here are the key points on how to prevent the sale of a disputed property without your knowledge or signature