the link has full info
http://www.mumbaipropertyexchange.com/nri_corner/bi_nribuying.asp
General permission has been given to non residents holding Indian passports and foreign citizens of Indian origin, whether resident in India or not, to dispose of by sale or inheritance immovable properties situated in India subject to certain conditions.
Non residents holding Indian passports and foreign citizens of Indian origin have been allowed to repatriate original investment in equivalent foreign exchange in residential/commercial properties after obtaining prior approval subject to a maximum of two houses under certain conditions.
No transfer of any immovable property exceeding the specified value for different cities can be effected unless particulars are filed with the appropriate authority of the Income Tax department within 15 days of signing the agreement.
As per a new scheme of capital gains tax with effect from 1993-94, instead of deducting from the proceeds of transfer, actual amount spent to acquire the asset or the amount spent on improvement or addition thereto, the inflation index adjusted cost will be deducted. Brokerage, legal fees and other expenses incurred in selling the property would be allowed as a deduction from the taxable capital gains.
Exemption From Capital Gains On Sale Of Residence
Capital gains arising on transfer of a residential house, comprising buildings or land appurtenant thereto, is exempt if the amount of capital gains is utilized in acquiring another residential house, either by purchase or by construction. The exemption cannot be claimed for vacant land as it is niether a residential house nor income therefrom is chargeable. The conditions required to be fulfilled to claim exemption here are :
the capital asset being transferred is a residential house, including self occupied house
income from the house is chargeable under the head - Income from house property
the house is a long term asset
the tax payer purchases or constructs a new residential house within the time specified