Step 1: Confirm Legal Ownership of the Inherited Property

Before a property can be sold, your legal ownership must be crystal clear.

If the deceased owner left a registered Will, the process is relatively straightforward. Ownership is transferred based on the Will, and the property can be mutated in the heirs’ names.

If there is no Will, things take longer. Legal heirship documents such as:

• Legal Heir Certificate
• Succession Certificate
• Family Settlement Deed

may be required, depending on the situation and state laws.

Key point for NRIs: Even if the property is occupied or managed by family in India, you cannot sell until your name legally appears in the ownership records.

Step 2: Understand Capital Gains Tax on Inherited Property

This is where most NRIs get confused and where costly mistakes happen.

Is capital gains tax applicable on inherited property?

Yes. While inheritance itself is not taxed, selling the inherited property triggers capital gains tax.

How is capital gains calculated?

• The purchase date of the original owner is considered, not the date you inherited it.
• The purchase cost of the original owner is used, along with indexation benefits.

In most inherited property cases, this results in long-term capital gains (LTCG).

Current tax implications

• LTCG on property is typically taxed at 20% plus applicable surcharge and cess
• Eligible exemptions may apply if gains are reinvested under Sections 54 or 54F

Important: Banks will often deduct TDS upfront, even before exemptions are properly applied, leading to excess tax deductions if not structured correctly.

Step 3: Selling the Property Remotely as an NRI

You do not need to be physically present in India to sell inherited property.

NRIs can execute the entire transaction remotely by:

• Issuing a Power of Attorney (PoA)
• Completing KYC and compliance digitally
• Coordinating buyer documentation and sale deed execution

However, without proper legal and tax coordination, remote sales often lead to delays, rejected bank filings, or frozen funds.

Step 4: Repatriating Sale Proceeds Outside India

This is where most NRIs face the biggest roadblocks.

Under RBI rules:

• NRIs can repatriate up to USD 1 million per financial year (including inherited assets)
• Funds must come from a valid sale transaction
• Proper tax clearance and documentation are mandatory

Banks require:

• Form 15CA & 15CB
• Proof of inheritance
• Sale deed
• Capital gains computation
• Tax payment confirmation

Any mismatch or missing document can delay transfers by weeks, or even months.

The Biggest Mistake NRIs Make

Many NRIs:

• Sell first
• Accept high TDS deductions
• Then try to figure out tax refunds and repatriation later

This almost always results in:

• Cash stuck in India
• Poor exchange rates
• Long refund timelines
• Compliance stress across two countries

A Smarter Way Forward

Selling inherited property as an NRI isn’t just a real estate transaction, it’s a cross-border financial event.

When legal ownership, tax planning, and repatriation are handled together:

• Tax outflow is optimized
• Compliance risk drops
• Funds move faster
• Stress disappears

That’s exactly why more NRIs now choose an end-to-end approach, instead of juggling lawyers, banks, and tax consultants separately.