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NRI Guide: Sale of Movable Property in India

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Saving Mantra Blog: Sale Proceeds of Movable Property in India for NRIs

NRIs selling movable property in India—such as shares, securities, jewelry, or other movable assets—must comply with taxation, TDS, FEMA, and repatriation rules. Proper planning ensures legal compliance and smooth fund transfer abroad.

This guide provides a step-by-step process for NRIs managing sale proceeds of movable property in India.

✔ Step 1: Identify Movable Property

Movable property includes:

  • Shares, mutual funds, and securities
  • Gold, jewelry, and bullion
  • Vehicles
  • Other tangible movable assets

Note: Tax treatment varies depending on the type of asset.

✔ Step 2: Determine Capital Gains Tax

Capital gains tax applies when movable property is sold:

  • Short-Term Capital Gains (STCG):
    • Assets held ≤36 months (for most movable property)
    • Taxed at normal slab rates or 15% for equity shares under STT
  • Long-Term Capital Gains (LTCG):
    • Assets held >36 months (e.g., gold, debt mutual funds)
    • Taxed at 20% with indexation
  • Exemptions:
    • Certain bonds, reinvestments, or specific securities (as per Income Tax Act)

✔ Step 3: TDS Deduction

  • Buyers or brokers may deduct TDS at source for NRIs:
    • Equity shares or mutual funds: 10% for LTCG exceeding ₹1 lakh
    • Other movable assets: appropriate TDS as per income type
  • NRIs can apply for Lower/No TDS Certificate under Section 197 if tax liability is lower

✔ Step 4: Comply with FEMA Rules

  • Sale proceeds of movable property are subject to FEMA regulations
  • Funds must be credited to NRO/NRE accounts for repatriation
  • Repatriation limit: USD 1 million per financial year
  • Ensure property was acquired legally by NRI

✔ Step 5: Repatriation of Sale Proceeds

Steps to transfer funds abroad:

  1. Ensure TDS has been deducted and taxes paid
  2. Submit Form 15CA & 15CB certified by a Chartered Accountant
  3. Transfer proceeds via NRO/NRE accounts
  4. Follow RBI/FEMA guidelines to stay within repatriation limits

✔ Step 6: File Income Tax Return

  • NRIs must report sale proceeds in ITR-2 or ITR-3 depending on business/professional income
  • Include:
    • Sale proceeds and capital gains computation
    • TDS deducted
    • Any exemptions claimed
  • Filing ensures TDS credit or refund and compliance with Indian laws

✔ Step 7: Maintain Proper Records

Keep all documents for at least 6 years:

  • Sale deeds, transaction statements, or broker notes
  • TDS certificates (Form 16A/26AS)
  • PAN, passport, and NRI proof
  • Form 15CA/15CB
  • Bank statements showing credited sale proceeds

FAQs – Sale Proceeds of Movable Property for NRIs

Q1: Are NRIs taxed on sale of movable property in India?
A: Yes. Capital gains tax applies based on holding period and type of asset.

Q2: What TDS applies for movable property sale?
A: TDS varies:

  • 10% for equity LTCG above ₹1 lakh
  • Higher rates for other movable assets as per tax provisions

Q3: Can NRIs repatriate full proceeds abroad?
A: Yes, up to USD 1 million per financial year via authorized banks, subject to FEMA compliance.

Q4: Are there exemptions for capital gains?
A: Yes, certain reinvestments in specified bonds, assets, or securities may qualify for exemptions under Indian law.

Q5: What forms are needed for repatriation?
A: Form 15CA & Form 15CB are required for repatriation of movable property sale proceeds.

Conclusion

Selling movable property in India as an NRI requires careful tax computation, TDS deduction, FEMA compliance, and repatriation planning. Following these steps ensures legal compliance, smooth fund transfer, and optimal tax management.

Disclaimer

This blog is for informational purposes only and does not constitute legal, tax, or investment advice. Tax laws, FEMA regulations, and repatriation rules may change. NRIs should consult qualified professionals before selling movable property in India.

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