BY PRASHANT PARIKH*
For many Indians living abroad, a property in India represents more than just an investment. It may be the family home, an apartment purchased years before moving overseas, or an inherited asset that carries emotional value. When the time comes to sell, many assume the process will be straightforward.
Unfortunately, it rarely is.
Every year, many NRIs discover that selling property in India involves far more than finding a buyer and signing paperwork. Tax rules, banking requirements, documentation, and changing regulations often create unexpected hurdles that delay transactions and increase costs.
One of the biggest surprises is tax deduction at source, commonly known as TDS. Unlike resident sellers, NRIs are subject to different withholding rules. Buyers are legally required to deduct tax before making payment, and the amount withheld can be significantly higher than many sellers anticipate.
The situation becomes even more confusing because the tax ultimately owed may be much lower than the amount deducted. In many cases, NRIs later claim refunds after filing their Indian income tax returns. However, that process can take time and requires proper documentation from the beginning of the transaction.
Documentation itself is another area where problems frequently arise.
Property purchased decades ago may have incomplete records. Some owners discover that original purchase documents cannot be located. Others inherit property without fully understanding how ownership was transferred. Small discrepancies in names, addresses, or supporting documents can delay registration and payment.
For families spread across different countries, even arranging signatures can become complicated. Many sellers appoint relatives through a Power of Attorney, but these documents must meet legal requirements in both the country of residence and India. Preparing them correctly before a buyer is found often saves valuable time later.
Moving the sale proceeds outside India is another area that surprises many first time sellers.
Receiving money into an Indian bank account does not automatically mean it can be freely transferred overseas. The remittance process involves banking regulations, tax compliance, and supporting documents. Planning these steps in advance can prevent unnecessary delays once the sale has been completed.
Inheritance adds another layer of complexity.
Many NRIs become owners of family property after the death of parents without immediately updating records or understanding the tax implications. Years later, when they decide to sell, they find themselves dealing with succession documents, ownership verification, and questions about the property’s original acquisition.
The good news is that most of these challenges are manageable when addressed early.
Before putting a property on the market, owners should review their documentation, understand the likely tax implications, confirm banking arrangements, and seek professional guidance where necessary. Waiting until a buyer has been found often creates avoidable pressure and can even jeopardize the transaction.
As cross border financial matters become increasingly common, property transactions are no longer simply real estate deals. They involve taxation, banking regulations, legal documentation, and coordination across multiple jurisdictions.
For NRIs, preparation is often the difference between a smooth sale and months of unnecessary frustration.
About the Author
Prashant Parikh is the founder of Cross Border Tax Desk, where he assists NRIs on Indian tax compliance, property transactions, remittances, estate planning, and cross border financial matters. Learn more at www.crossbordertaxdesk.com.
