Short answer
Money that arises in India — rent, a pension, dividends, the proceeds of selling an Indian asset — lands in your NRO account. NRO is the Non-Resident Ordinary rupee account, and it is the one gateway for sending that money abroad. As a Non-Resident Indian (NRI) or person of Indian origin (PIO), you can send up to USD 1 million each financial year out of it. Your bank releases it only after Indian tax on that money is settled, on the forms the tax department prescribes. This cap is an NRO rule; for NRE (Non-Resident External) and FCNR(B) (Foreign Currency Non-Resident, Bank) accounts, see our NRE, NRO or FCNR guide.
This guide is for NRIs and PIOs with money to move out of India. It is not a guide to working out your capital-gains tax or filing your return. Your accountant does that, and we will tell you what to ask them.
How the money leaves, in order
Sending NRO money abroad runs in a fixed order. Miss a step and the bank will send you back.
Money arises in India
Rent, a pension, dividends, or the proceeds of selling an Indian asset.
Your NRO account
The one gateway for sending that money abroad.
Indian tax settled first
The bank releases the money net of the Indian tax on it.
Within the yearly cap
Out of your NRO balances, each financial year.USD 1 million
The bank forms
Form 145 — plus the Form 146 accountant’s certificate where the taxable payments to you topRs 5,00,000
Money leaves India
Sent abroad, or moved to your NRE account within the same yearly facility.
The fixed order money takes out of India. Figures are illustrative.
- Money arises in India — rent, a pension, dividends, or the proceeds of selling an Indian asset.
- It lands in your NRO account, the one gateway for sending that money abroad.
- Indian tax on it is settled first; the bank releases the money net of that tax.
- You may remit up to USD 1 million out of your NRO balances each financial year.
- The bank takes Form 145, with the Form 146 accountant’s certificate where the taxable payments to you are more than Rs 5,00,000.
- The money then leaves India — sent abroad, or moved to your NRE account within the same yearly facility.
What an NRO account pays out. An NRO account can be debited for local payments, for transfers to another NRO account, and to send your current income abroad. Sale proceeds and other balances follow the yearly cap below.
Settle the Indian tax first. When an NRI sells Indian property, the buyer deducts tax at source — TDS — at the rates in force, not the 1% used for a resident seller. Your accountant works out the final tax. The bank then releases the money net of it.
The bank’s forms. Under Rule 220 of the Income-tax Rules, 2026, you give the bank Form No. 145 before the money leaves; where an accountant’s certificate is needed, that is Form No. 146. You need the Form 146 certificate when the taxable payments to you in the tax year come to more than Rs 5,00,000 — unless your Assessing Officer has instead issued a certificate or order under section 395, which uses Part B of Form 145. At or below Rs 5,00,000, Part A of Form 145 alone is enough.
The yearly limit, and sending more. This limit runs by the financial year. Moving money from your NRO account to your NRE account counts within the same USD 1 million facility. It draws on the yearly limit like any outward transfer. We read it as one ceiling for the whole year: every NRO remittance and NRO-to-NRE transfer shares it, so selling several assets does not give you several limits.Our reading To send more than USD 1 million out of NRO in one financial year, you need the Reserve Bank of India’s prior approval. So for a larger amount, send up to the cap, carry the rest into the next financial year, or ask the Reserve Bank for approval.
What goes out, by source of money
What you repatriate depends on where the money came from. An OCI below is an Overseas Citizen of India.
| The money | How it can leave India | The main condition |
|---|---|---|
| Current income: rent, a pension, dividends | A permitted NRO debit in its own right | Sent net of tax; the USD 1 million yearly cap is for your other balances, not for this. |
| Sale proceeds of property bought with rupee or inherited funds | Through the NRO account, within the yearly cap | Property acquired while you were resident, or inherited from a resident, uses the USD 1 million Remittance of Assets route (RBI permission otherwise). |
| Sale proceeds of property bought with foreign funds | Repatriated directly under the immovable-property route | Allowed where the property was paid for in foreign exchange through banking channels, or out of an NRE or FCNR(B) account. |
| Residential property sold under that foreign-funds route | The same route | Repatriation is restricted to not more than two such residential properties. |
| Agricultural land, a plantation or a farm house | Not by purchase in the first place | An NRI or OCI cannot buy these; such land can be acquired only by inheritance. |
We read the foreign-funds property route as a facility separate from the USD 1 million NRO cap.Our reading Proceeds of a qualifying property go out under that route, for homes up to two. Rupee-funded, inherited or extra properties go through the NRO cap instead. The boundary turns on how the property was paid for, so confirm the funding trail with your bank.
A worked example, in US dollars
Farhan is made up for this guide, and the figures are illustrative — not a real sale. He lives in the Gulf. His late father left him a flat in India, which he now sells. After Indian tax is paid, the net proceeds are larger than one year’s cap, so the money leaves over two financial years.
| Step | What happens |
|---|---|
| The flat sells | Net proceeds, after Indian tax, come to about USD 1.6 million (illustrative). |
| Tax is settled first | His accountant certifies the tax; because the taxable sum is well above Rs 5,00,000, the bank needs Form 146 with Form 145. |
| This financial year | He remits USD 1 million — the yearly cap. |
| The next financial year | The balance, USD 0.6 million, goes out under the cap again, or he asks the Reserve Bank to send it sooner. |
Farhan’s flat waits for the tax and the paperwork. Once both are done, the money moves out within the yearly cap.
Common mistakes
A few things catch people out:
- Letting the sale proceeds skip the NRO account; that account is the gateway for money leaving India.
- Moving money out before the Indian tax is settled, so the bank sends the request back.
- Forgetting Form 146 where an accountant’s certificate is needed, and giving the bank only Form 145.
- Reading the yearly cap as per-asset; it is one ceiling for the whole financial year.
- Assuming a foreign-funded property sale has to squeeze into the NRO cap; it may have its own route.
If you live in the US or the UK
The Indian steps are the same wherever you live. Your home country may tax the same money again.
- Gulf: if your country of residence has no personal income tax, the Indian tax clearance is the whole hurdle. Indian tax on a property gain still applies before the money leaves.
- US: if you are a US citizen or resident alien, the US taxes your worldwide income, so a gain on selling an Indian asset is generally reportable there too, with a foreign tax credit possible for Indian tax paid. You also report the NRO account to the US on an FBAR, the foreign-accounts report, once all your foreign accounts together pass USD 10,000 at any point in the year. See our US residents guide.
- UK: if you are a UK resident, the UK normally taxes your foreign income and gains, so an Indian gain is generally taxable there, with double-tax relief under the India–UK treaty. See our DTAA guide.
What to do
When you are ready, we will help you work out which route your money takes and line up the bank paperwork, and tell you what to ask your accountant. One question is enough to start: ask Rohit in the question box on this page.
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Points of interpretation
Where the rule leaves room for more than one reading, we say so and show both.
Whether the USD one million is a single aggregate ceiling for the financial year across all NRO outward remittances and NRO-to-NRE/SNRR transfers.
The USD one million is one aggregate ceiling for the financial year. It covers outward remittances from NRO balances, sale proceeds and inherited assets taken together, and transfers to NRE or SNRR accounts count within the same limit; anything beyond it that year needs RBI approval. Current income remitted net of tax is a separate permitted debit, not part of this cap.
The USD one million limit is applied per asset sold or per transaction, so selling several assets would let you remit more than USD one million in the same financial year.
Whether the entire proceeds of a property bought with foreign funds are repatriable, and how the two-residential-property limit interacts with the USD one million NRO route.
Sale proceeds of property that was bought with foreign exchange or from an NRE/FCNR(B) account can be repatriated by the bank under the immovable-property route (for residential property, up to two such properties) as a facility distinct from the USD one million NRO limit. Proceeds that do not qualify - property bought with rupee or inherited funds, or a third residential property - are routed through the NRO account within the USD one million cap. The boundary is fact-specific; confirm the funding trail with your bank.
Every rupee an NRI sends abroad, including the proceeds of a foreign-funded property, must fit inside the single USD one million-per-year limit.
Sources
- Master Direction - Deposits and Accounts
- Part II, para 6.7 (NRO - permissible credits)
- Part II, para 6.8 (NRO - permissible debits / repatriation)
- Part II, para 6.8 (NRO - permissible debits; the 'Apart from these ...' sentence following the current-income debit)
- Part II, para 6.14 (NRO - Income-Tax)
- Master Direction - Remittance of Assets
- Para 3.2 (Remittances by NRIs/ PIOs), clause (i) - NRO balances / sale proceeds / inheritance
- Para 4.1 (Remittance of assets requiring RBI approval), clause (ii) - NRIs/PIOs out of NRO balances / sale proceeds / inheritance, in excess of USD 1,000,000 per financial year
- Para 3.2 read with para 4.1 (excess per financial year needs RBI approval) and Master Direction - Deposits and Accounts, Part II para 6.8 (NRE/SNRR transfer within this facility)
- Income-tax Rules, 2026 - Rule 220
- Rule 220(1) (information in Form No. 145; Part C with Form No. 146 accountant's certificate) and Rule 220(4)(a)
- Rule 220(1)(a) (Part A, up to Rs. 5,00,000), 220(1)(b) (Part B, above Rs. 5,00,000 with Assessing Officer certificate/order under section 395) and 220(1)(c) (Part C with Form No. 146, above Rs. 5,00,000)
- Income-tax Act, 2025 (Act 30 of 2025), as amended by the Finance Act, 2026
- Section 393(2), Table (payments to non-resident) Sl. No. 17 (payee: any non-resident (not a company)/foreign company; rate column: Rates in force); contrast section 393(1), Table Sl. No. 3 (transfer of immovable property, payer other than 3(iii), 1% - resident sellers)
- Master Direction - Acquisition or Transfer of Immovable Property under Foreign Exchange Management Act, 1999
- Part II, para 3.1.1 (purchase) read with paras 3.1.3 and 3.1.4 (acquisition by inheritance)
- Part II, para 8.2 (Repatriation of sale proceeds of immovable property), opening clause and condition on payment in foreign exchange / FCNR(B) / NRE
- Part II, para 8.2 (Repatriation of sale proceeds of immovable property), final condition
- Part II, para 8.1 (Repatriation of sale proceeds - section 6(5) property)
- Part II, para 8.2 (repatriation route for foreign-funded property) read with para 8.1 (section 6(5) property uses the Remittance of Assets facility)
- U.S. Citizens and Resident Aliens Abroad
- Introductory paragraph (worldwide-income statement)
- Report of Foreign Bank and Financial Accounts (FBAR)
- 'Who must file' - U.S. person filing threshold
- Tax on foreign income
- 'Overview' / 'Working out if you need to pay' (foreign income includes 'foreign investment income, for example dividends and savings interest')
What changed
- 26 October 2026
- First version.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.