Rule 29 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 29 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 says when the sale proceeds of immovable property in India can be sent abroad. Sub-rule (1) keeps proceeds of section 6(5) property in India unless the Reserve Bank permits. Sub-rule (2) lets an authorised dealer allow an NRI or OCI to repatriate on three conditions, including a limit of two residential properties. Sub-rule (3) deals with an overseas lender's sale after an external commercial borrowing defaults.
This article is based on the Rules as notified on 17 October 2019 (S.O. 3732(E)) as amended by the notifications named in this article; the latest amendment consulted is S.O. 4870(E) dated 2 September 2026. Rule 29 is as notified on 17 October 2019; none of the 19 amending notifications up to 2 September 2026 changes it. Amendments made after that date should be checked in the Gazette. There is no official consolidated text. The Reserve Bank's Master Direction - Acquisition or Transfer of Immovable Property, used as a cross-check, is "updated as on September 01, 2022". For NRI taxes on a sale, see our income-tax guides and our NRI tax filing service.
A person who holds property under section 6(5) of the Act (property acquired while resident in India or inherited from a resident), or that person's successor, cannot repatriate sale proceeds without the general or specific permission of the Reserve Bank (sub-rule (1)). For an NRI or OCI selling property other than agricultural land, farm house or plantation property, an authorised dealer may allow repatriation if the property was acquired lawfully, the purchase money came in foreign exchange through banking channels or from FCNR or NRE funds, and for residential property repatriation is restricted to not more than two such properties (sub-rule (2)).
Rule 29(1): section 6(5) property
Sub-rule (1) says a person referred to in sub-section (5) of section 6 of the Act, or his successor, shall not, except with the general or specific permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section. Section 6(5) of the Act covers a person resident outside India who holds, owns, transfers or invests in immovable property in India that was acquired, held or owned when resident in India, or inherited from a person resident in India; it is explained in our article on section 6(4) to (6) of the FEMA, 1999. The Master Direction (Part II, paragraph 8.1) says the same, and adds that a person who is resident outside India can use the remittance facilities under the Foreign Exchange Management (Remittance of Assets) Regulations, 2016.
Rule 29(2): sale by an NRI or an OCI
In the event of a sale of immovable property, other than agricultural land or farm house or plantation property, in India by an NRI or an OCI, the authorised dealer may allow repatriation of the sale proceeds outside India, provided these conditions are satisfied:
| Clause | Condition |
|---|---|
| (a) | The property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition, or the provisions of the Rules |
| (b) | The amount for acquisition was paid in foreign exchange received through banking channels, or out of funds held in a Foreign Currency Non-Resident Account, or out of funds held in a Non-Resident External Account |
| (c) | In the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties |
Three notes on reading it. First, the permission is an authorised dealer's, not the Reserve Bank's, when all three conditions are met. Second, clause (b) is about how the purchase was funded: money from an NRO account or from Indian rupee sources, as the Rule is worded, does not meet it. Third, the two-property limit concerns repatriation, not sale; an NRI may sell more than two residential properties, but the Rule limits repatriation of proceeds to two.
The Master Direction (paragraph 8.2) restates the conditions. It differs from the Rule in two ways. It names, besides an NRI or OCI, "a PIO resident outside India" who held property under the erstwhile 2000 immovable property regulations, though the Rule speaks only of an NRI or an OCI. And it adds that where an NRI or OCI bought with a housing loan, repayments made out of remittances from abroad or by debit to an NRE or FCNR(B) account may be treated as equivalent to foreign exchange received. That statement is the Master Direction's own and is not in the Rule. The Master Direction's text is dated September 2022, and the reference to the "PIO" category is a legacy of the older regulations; the reader should confirm the current position against the Gazette and the Reserve Bank's latest directions.
Rule 29(3): an overseas lender's sale after default
Where an external commercial borrowing taken by a person resident in India under the "Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000, as amended from time to time" is not repaid, an authorised dealer bank may permit the overseas lender or the security trustee, in whose favour a charge on immovable property was created to secure the borrowing, to sell the property only to a person resident in India and to repatriate the sale proceeds towards outstanding dues on that loan and not any other loan. The Rule prints "only to a (by the) person resident in India", a drafting slip that is reproduced here as it stands.
The 2000 regulations named in this sub-rule have since been replaced by the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, explained in our article on the ban on borrowing and lending, defined terms and end-use limits; the reader should check the current instrument. The creation of the charge is dealt with in rule 30, explained in our article on rules 30 to 33.
Where to look for the wider remittance route
Outside the property context, remittance of assets by a person who has been in India is in the Remittance of Assets Regulations, 2016, explained in our article on remittance of assets by individuals. For sale of shares, rule 22 applies; see our article on rules 20 and 22. For background reading, see our guides on NRI property sale and repatriation and repatriation rules under FEMA. The Rules state no tax rate; rule 32 says transactions are subject to applicable taxes and other duties or levies.
A worked example
Anita, an NRI, bought a flat in Pune ten years ago, paying from her NRE account, and later bought a second flat the same way. She now sells the first flat. The authorised dealer may allow repatriation of the sale proceeds if the flat was acquired in accordance with the law then in force, the purchase money came in foreign exchange through banking channels or from her NRE account, and it is within the two-residential-property limit. If the property were agricultural land, rule 29(2) would not apply. If she inherited a property from a resident parent, rule 29(1) applies and the proceeds stay in India unless the Reserve Bank permits otherwise.
Need help with repatriating property sale proceeds?
The paperwork behind a repatriation, from the proof of funds to the tax certificates, needs to be in order before the bank is approached. Our NRI tax filing team can help with the Indian-side documentation.
Key takeaways
- Sale proceeds of section 6(5) property cannot be repatriated without the Reserve Bank's general or specific permission.
- An authorised dealer may allow an NRI or OCI to repatriate sale proceeds of non-agricultural property if acquisition was lawful and funded in foreign exchange or from FCNR or NRE funds.
- Residential property: repatriation is limited to not more than two such properties.
- An ECB lender's sale after default must be to a resident and proceeds repatriate only towards that loan.
- The Master Direction consulted is dated 1 September 2022 and mentions a "PIO"; confirm against current text.
Read next
- Rules 24 and 25 of the FEM (Non-debt Instruments) Rules, 2019: property purchase by NRI, OCI and spouse
- Rules 30 to 33 of the FEM (Non-debt Instruments) Rules, 2019: transfer of property and citizens of certain countries
- Regulations 1 to 4, 7 and 8 of the FEM (Remittance of Assets) Regulations, 2016: remittance of assets by individuals
- Repatriation of funds from India: rules and limits
Disclaimer: Based on the Gazette text of the instrument this article names, as notified and as amended by the notifications named in the article (for the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 the latest amendment consulted is S.O. 4870(E) dated 2 September 2026), as consulted on 2 October 2026. There is no official consolidated text; the provisions were read with each amendment applied. Sectoral caps, entry routes, conditions, forms and time limits change by notification, press note and circular; later changes should be checked on the Gazette, DPIIT and Reserve Bank sites. This article is general information, not legal advice; check the official text before acting.