NRIs can sell their properties to either Residents or NRIs. Capital gains tax applies to the gains made from the sale. If the property is held for more than two years, it is treated as long-term capital gains and taxed at 20% of the profits. If the property is sold within 24 months of purchase, it is treated as short-term capital gains and taxed at the income tax slab rate.

All said and done, you have to find a buyer to sell your property or a tenant to rent out your property. With tighter norms introduced by the government to check tax evasion, most Indian residents hesitate to buy NRI-owned properties as it results in additional legal procedures and costs. Even finding tenants for NRI-owned properties is difficult due to the legal compliances required. With real estate being one of the highly illiquid asset classes, the added legal compliance procedures make it more difficult to find suitable buyers or even tenants.