How to sell inherited property in India from the U.S.: a step-by-step guide

Updated November 3, 2026 · 8 min read

Selling a family home in India while living in the U.S. touches two tax systems, two sets of banking rules and a lot of paperwork, often from 8,000 miles away. The order you do things in matters. Most of the expensive problems come from doing the right steps at the wrong time.

Here is the typical sequence for an inherited or ancestral property.

Step 1: Confirm who owns it, on paper

Before anything else, the property has to be legally yours, and every co-owner needs to be identified.

If there was a will: depending on the state and city, you may need probate before you can sell.
If there was no will: a legal heir certificate or succession certificate, and often a relinquishment or partition deed between siblings.
Mutation: the property records with the local municipality or revenue office should be updated to the heirs' names.

Title gaps are the most common cause of delay. Buyers and their banks will check.

Step 2: Set up your Indian paperwork

PAN for every seller. It's needed for TDS, the lower TDS certificate and any refund.
An NRO account in each seller's name. That's where sale proceeds must land.
Updated KYC with the bank, reflecting your NRI or OCI status.
A power of attorney, if you won't travel for the sale. A POA signed in the U.S. is usually notarized and apostilled, or attested at an Indian consulate, then stamped in India within three months of arriving there. Keep it specific to this sale.

Step 3: Value the property and estimate your gain

An Indian CA will work out your capital gain. For inherited property:

Your cost is generally what the previous owner paid, plus improvements.
Your holding period includes the previous owner's, so most ancestral property is long-term (over 24 months) and taxed at 12.5%.
For property acquired before April 1, 2001, the fair market value on that date can often be used as the cost.

Get a registered valuer's report if the cost records are thin.

Step 4: Apply for a lower TDS certificate

As an NRI seller, the buyer will otherwise withhold tax on the full sale price. Once the sale agreement is signed, and before payments start, apply for a lower TDS certificate (Form 128, formerly Form 13). Then the buyer withholds tax only on your actual expected gain. Read more in TDS on NRI property sales.

Step 5: Close the sale

The buyer pays into your NRO account and deducts TDS at the certified rate.
From October 1, 2026, resident individual buyers can deposit that TDS using their PAN. No TAN is needed.
The sale deed is registered at the sub-registrar's office, in person or through your POA holder.
Collect the TDS certificate and challan from the buyer. You'll need them for repatriation and your tax returns.

Step 6: Bring the money to the U.S.

Your CA issues Form 146, and you file Form 145 (formerly 15CB and 15CA). See Form 15CA & 15CB explained.
Your bank transfers the funds from your NRO account, up to USD 1 million per person per financial year. See the USD 1 million limit.

Step 7: File in India

File an Indian income tax return for the tax year of the sale (April to March). That settles the capital gains tax, and it's how you get back any excess TDS.

Step 8: Report it in the U.S.

The U.S. taxes its citizens and residents on worldwide income, so the sale also shows up on your U.S. return. Your U.S. CPA will typically handle:

The capital gain on your Form 1040, through Form 8949 and Schedule D. For U.S. purposes, inherited property's basis is generally its fair market value at the date of death, which can make the U.S. gain very different from the Indian one.
A foreign tax credit (Form 1116) for capital gains tax actually paid in India, so the same gain usually isn't fully taxed twice.
The FBAR (FinCEN Form 114) if your foreign accounts, including the NRO account, together exceeded $10,000 at any point in the year.
Form 8938 (FATCA) if your foreign assets were above the reporting thresholds.
Form 3520 if you received more than $100,000 in a year as an inheritance or gift from a foreign person or estate. Penalties for missing it are steep, even when no tax is owed.

Frequently asked questions

Can I sell inherited property in India without traveling there?

Usually yes. A specific power of attorney, executed in the U.S. and stamped in India, lets a trusted person sign and register the sale on your behalf. Banks and sub-registrars still need your KYC and PAN details.

Can an OCI cardholder sell inherited property in India?

Yes. NRIs and OCIs can generally sell residential and commercial property they inherited to a person resident in India. Agricultural land, plantations and farmhouses have extra restrictions. Check with an Indian property advocate.

How long does selling inherited property in India take from the U.S.?

It depends mostly on title readiness. If the paperwork is in order, the sale and transfer can take a few months. If heirship or mutation still needs work, allow considerably longer.

Do I pay tax in both India and the U.S.?

India taxes the gain on property located in India. The U.S. taxes its citizens and residents on worldwide income but generally allows a credit for the Indian tax actually paid. Your U.S. basis is often stepped up to the value at the date of death.

This is exactly what we coordinate. Roots & Return gives your family one U.S.-based case manager across all eight steps, working with licensed Indian CAs, property advocates, RBI-authorized banks and U.S. CPAs.

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General educational information, current as of November 2026. It is not legal, tax or financial advice. Rules differ by state in India and by personal circumstances; confirm your situation with a licensed Indian property advocate, Indian Chartered Accountant and U.S. CPA before you act. Roots & Return coordinates independently licensed professionals; we do not prepare filings, give legal or tax opinions, or hold or transfer client funds.