NRI Selling Property in India: Understanding the Required Bank Account and Tax Compliance
Introduction
Navigating the complex world of real estate transactions in India as a Non-Resident Indian (NRI) can be challenging due to strict financial regulations set by the Reserve Bank of India (RBI). This guide simplifies the essential steps for a smooth property sale, focusing on opening an NRO (Non-Resident Ordinary) account and obtaining the required Certificate of Tax Compliance (Form 15CA/15CB).
Understanding RBI Mandates
The RBI mandates that all income from India must pass through an NRO account before being repatriated. This ensures tax compliance and monitors fund flows, preventing potential financial issues.
Opening an NRO Account
NRIs must first open an NRO account, serving as the channel for funds from property sales in India. Required documents include a scrutinised copy of the passport and visa, proof of overseas residency, and a PAN card. These documents are essential for validating the legitimacy of repatriation funds.
Consulting with CA Arun Tiwari
Expert advice is crucial for navigating financial regulations. CA Arun Tiwari, with extensive experience in NRI financial matters, provides invaluable assistance.
Role of Form 15CA/15CB
Before transferring funds from the NRO account, NRIs must obtain the Certificate of Tax Compliance. This involves acquiring Form 15CA/15CB from a chartered accountant. The 15CB form certifies tax obligations, while the NRI lodges the 15CA form, declaring remittance and completing the transaction.
Transfer Limits and Additional Documentation
NRIs should be aware of the RBI’s transfer limits, currently set at USD 1 million annually. Amounts exceeding this require supplementary documentation submitted to the RBI, including a detailed explanation of the transfer purpose and accompanying documents for regulatory compliance.
Summarising the Process
For NRIs navigating property sales in India, prioritise the following: Open an NRO account for seamless sale proceeds.
Obtain Form 15CA/15CB from a chartered accountant for tax compliance.
Adhere to RBI regulations on fund transfers, with comprehensive documentation for amounts over USD 1 million.
Conclusion
Executing a well-organised and planned approach is crucial for NRIs selling property in India. By understanding and following the stringent mandates set by the RBI, opening an NRO account, seeking guidance from CA Arun Tiwari, and securing necessary tax compliance certificates, NRIs can navigate the transaction process expertly, avoiding legal pitfalls and unnecessary delays.
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About Author: CA Arun Tiwari, a Chartered Accountant and former EY employee, is the Chief Consultant of NRI Desk and Influencer Desk at AKT Associates. He focuses on providing specialised consultancy services for NRIs and creating educational content to enhance awareness within the NRI community.
Author Bio
if the NRI is having refund from Builder along with interest due as he not been allotted the flat. what to disclose in form 15CA and CB while remitting from NRO to NRE?
whether income tax to be paid on interest income before remittance?