There is a specific moment many US-based NRIs describe when the complexity of selling Indian property becomes real. It is not when the buyer makes an offer. It is not when the broker calls. It is when someone — a CA, a friend who sold last year, a Reddit thread — mentions the words "FBAR" and "Schedule D" in the same sentence as their flat in Gurgaon or their apartment in Powai.
Up to that point, the sale felt like an Indian transaction with some extra paperwork. After that point, it becomes clear that the United States government has opinions about what you do with property in a country 13,000 kilometres away.
Here is what the picture actually looks like.
Who This Applies To — And It's More People Than You Think
The US taxes its residents on worldwide income. This applies if you are a US citizen, a Green Card holder, or someone who meets the Substantial Presence Test — roughly 183 days in the US in a given year, calculated using a specific formula. H1B visa holders who have been in the US long enough frequently meet this threshold without realising it.
If you are any of the above and you own property in India, the IRS has jurisdiction over the proceeds when you sell it. The fact that the property was purchased with Indian money, inherited from Indian parents, or located in India is irrelevant. Your tax residency status in the US is what matters — not the location of the asset.
This surprises a significant number of NRIs. The surprise usually becomes expensive.
The India Side: TDS, Form 13, and Why Timing Matters
Before the US side of the equation, understand what happens in India. When an NRI sells property in India, the buyer is legally required to deduct TDS (Tax Deducted at Source) from the sale proceeds. The rate is typically 20% on the total sale value — not on the profit, but on the entire transaction amount.
On a ₹2 crore flat, that is ₹40 lakhs withheld before you see a rupee.
You are entitled to recover the excess (the difference between TDS and your actual tax liability after accounting for your cost basis and long-term capital gains rate of 12.5%) through an Indian tax return. But that process takes months. The money sits in government hands while you wait.
There is a mechanism to reduce this: Form 13, filed with the Indian Income Tax Department before the sale closes. If granted, it reduces the TDS rate to something closer to your actual liability. Applications typically take 4–8 weeks. This means you need to know the approximate sale price and timeline well before closing — not something most sellers plan for.
The practical advice: as soon as you have a serious buyer and an expected price range, engage an Indian CA and file Form 13 immediately. Do not wait for a final signed agreement. The application can be adjusted. The processing time cannot be shortened.
The Long-Term Capital Gains Rate Change You May Have Missed
In the 2024–25 Union Budget, India changed how LTCG on property is taxed for NRIs. The previous structure — 20% with indexation benefit — was replaced with a flat 12.5% rate without indexation for most transactions.
For recently purchased properties or properties in high-inflation environments, 12.5% without indexation may result in higher tax than the previous system. For properties held for very long periods where indexation would have significantly reduced the gain, the new structure is worse. Your Indian CA should run both scenarios for your specific property before you set a price.
This is not a general concern. It is a specific calculation that will affect the net proceeds you actually receive.
The US Side: What You Must Report and When
The United States requires its tax residents to report foreign financial accounts and foreign income. For NRIs selling Indian property, this creates three distinct reporting obligations.
Capital Gains Reporting (Schedule D / Form 8949). The sale of Indian property is a capital gain event in the US. You report it on your federal tax return in the year the sale closes. The gain is calculated in US dollars — you convert the cost basis (what you paid, in rupees, at the exchange rate on the purchase date) and the sale price (in rupees, at the exchange rate on the sale date) to USD. The difference is your US capital gain.
Here is where it gets specific: the India-US Double Tax Avoidance Agreement (DTAA) allows you to claim a foreign tax credit for Indian taxes paid. The Indian capital gains tax you paid reduces your US tax liability on the same transaction. You are not taxed twice on the same gain — but you are required to report it and claim the credit correctly. Failing to report it at all is the error that creates problems.
FBAR (FinCEN Form 114). If the sale proceeds are held in your Indian bank account — NRO account, typically — and the total balance of all your foreign accounts exceeds $10,000 at any point during the calendar year, you are required to file an FBAR. This is separate from your tax return. It is filed online through FinCEN by April 15 (with automatic extension to October 15). The penalties for non-filing are severe — up to $10,000 for non-willful violations and significantly more for willful ones. Most NRIs who hold sale proceeds in India for any period of time will breach the $10,000 threshold easily. ₹20 lakhs sitting in your NRO account is approximately $24,000 at current exchange rates.
Form 8938 (FATCA). If your foreign financial assets exceed $200,000 on the last day of the tax year, or $300,000 at any point during the year (for those filing singly — double these thresholds for joint filers), you must file Form 8938 with your regular tax return. This is in addition to, not instead of, FBAR.
None of these forms generate additional tax by themselves. They are disclosure requirements. But failing to file them can generate penalties that dwarf the actual tax owed.
Repatriation: Moving the Money from India to the US
Once the sale closes and Indian taxes are settled, you want the money in the US. This is a process with its own requirements.
Sale proceeds must first sit in your NRO account. From there, repatriation to the US is permitted up to USD 1 million per financial year (April to March in India). Above that requires RBI approval and additional documentation.
To repatriate, your Indian bank will require Form 15CA (filed online with the Indian Income Tax portal by you or your CA) and Form 15CB (a certificate from a Chartered Accountant verifying the tax compliance). Without these, the bank will not process the wire transfer.
The timeline for repatriation after all documents are in order is typically 7–14 business days. Banks occasionally request additional documentation. Build at least 3–4 weeks into your expectations from the day Indian taxes are settled to the day the money arrives in your US account.
One detail worth knowing: the exchange rate at which the repatriation happens is the bank's spot rate on the transfer date, not any rate you negotiated or assumed. If you are moving a significant amount, consider whether to move it in one transfer or stagger it — exchange rates can shift by 1–2% over a few weeks, which on ₹50 lakhs is a non-trivial difference.
The Broker Question, Specifically From the US
Selling from the US creates a specific kind of vulnerability in broker relationships. You are not present. You cannot verify what is being said to buyers. You cannot monitor whether the asking price you instructed is being communicated honestly.
A pattern reported consistently by US-based NRI sellers: the broker quotes a price to buyers that is lower than the owner's instructions, then presents the NRI with a single offer framed as "the best we could get." The NRI, several time zones away and months into the process, accepts. The broker collects from both sides.
The structural solution is to use a platform where buyers contact you directly. When a buyer knows they are talking to the owner — not to a broker who has intermediated dozens of similar transactions — the conversation is different. The buyer shares their actual position. You hear it directly. There is no version of the conversation that has been filtered through someone with a different incentive.
Your Indian phone number on a direct platform is encrypted. Buyers contact you through the platform. You receive the message at whatever hour your US time zone allows, respond when you can, and decide independently whether to progress. The time-zone friction does not disappear, but you are no longer dependent on someone else's account of what buyers are saying.
One Practical Sequence
If you are a US-based NRI thinking about selling Indian property in the next 12 months, the preparation sequence that creates the least friction is:
Start with an Indian CA who has NRI property transaction experience — not just income tax experience. This is a specific subspecialty. Ask how many NRI property sales they have handled in the past year. The number should be more than five.
Simultaneously, engage a US CPA who understands foreign income reporting. Your regular accountant may not have this expertise. Specifically ask whether they have handled FBAR and foreign property sales before. If not, find someone who has.
Get a formal valuation of the property from a registered valuer in India. This establishes a defensible cost basis for both Indian and US tax purposes and protects you against Section 50C reassessment risk in India.
File Form 13 as soon as you have a realistic sale price expectation. Do not wait for a final buyer.
List the property on a platform that does not expose your number to brokers and gives you direct access to buyers. Set realistic response time expectations — you will not be replying to morning messages from India at 9am IST, but you can set up notifications and respond within 12 hours. Serious buyers accept this.
Keep all sale-related communications in writing. WhatsApp messages, email threads, platform conversations — these create a paper trail that is useful if any aspect of the transaction is later questioned by Indian or US tax authorities.
What the Numbers Look Like on a Real Transaction
To make this concrete: assume you are selling a 3BHK in Pune purchased in 2011 for ₹60 lakhs, now selling for ₹1.8 crore. You are on an H1B visa that passes the Substantial Presence Test. The property has been held more than 24 months, so LTCG at 12.5% applies in India.
India side: Gain = ₹1.2 crore. Indian LTCG tax = ₹15 lakhs. TDS deducted by buyer at 20% = ₹36 lakhs. Excess TDS (₹21 lakhs) refunded via Indian tax return — typically 6–9 months after filing. Form 13 could have reduced TDS to approximately ₹15–18 lakhs if filed in advance.
US side: Cost basis in USD at 2011 exchange rate (approx ₹45/$1) = ~$133,333. Sale proceeds in USD at current rate (~₹85/$1) = ~$211,764. US capital gain = ~$78,431. Long-term capital gains rate at federal level depends on income bracket — 0%, 15%, or 20%. Assume 15% = ~$11,764 US tax owed. Foreign tax credit from Indian taxes paid (~$17,647 at current rates) reduces US liability to zero, with potential carryforward credit.
Net result: No double taxation, but significant complexity, and ₹21 lakhs locked in India for 6-9 months waiting for a TDS refund that Form 13 could have largely prevented.
The Honest Bottom Line
Selling Indian property as a US-based NRI is manageable. It is not simple, and the professionals who handle it well are worth finding specifically for this purpose.
The US reporting obligations — FBAR, Schedule D, Form 8938 — exist whether you plan for them or not. The question is whether you address them proactively, with a CA and CPA working together, or reactively, when something has already gone wrong.
The sale itself, handled through a direct-owner platform, removes the layer of uncertainty that comes from working through brokers you cannot supervise from 13,000 kilometres away.
If your Indian property is ready to list, start on resale.center — verified owner listings, encrypted number, direct buyer contact. Built for exactly this situation.
Part of the NRI Property Handbook — resale.center's complete guide for Indians living abroad who own property back home. Read all chapters →