Real estate has emerged as one of the most preferred global investment options. Known for delivering strong returns along with additional utility benefits, here are five compelling reasons to consider property investment:
Benefits of Real Estate Investment
Why Should An NRI Invest In India?
Hyderabad combines robust infrastructure, a vibrant cultural scene, and a thriving IT industry—making it an attractive location for investment or relocation. Its strong economic momentum, upcoming infrastructure projects, cosmopolitan lifestyle, rich heritage, and high safety standards further enhance its appeal for investors.
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Frequently asked questions
Can an NRI/OCI buy property in India?
Yes. NRIs and OCIs can freely buy residential and commercial property in India. Buying agricultural land, plantation property, or a farmhouse is not permitted (except via inheritance or specific RBI permission).
Is there a cap on the number of properties I can buy?
No, there is no limit for residential or commercial properties. Restrictions only apply to agricultural/plantation/farmhouse assets.
Can I receive property as a gift or through inheritance?
Yes. NRIs/OCIs can inherit or receive gifts of residential/commercial property from eligible relatives. FEMA also allows holding property acquired while resident in India or inherited later.
How should I pay for the purchase?
Through normal banking channels from abroad, or from your NRE/NRO/FCNR accounts. Cash payments are not allowed.
Can I get a home loan in India as an NRI?
Yes. Indian banks and housing finance companies can lend to NRIs/OCIs. Repayment must be made via inward remittances or NRE/NRO/FCNR accounts. (Terms vary by lender.)
Can I repatriate sale proceeds?
Yes, up to the original foreign currency amount you paid for purchase (for up to two residential properties). Any balance can be sent under the USD 1 million per financial year NRO remittance facility, subject to documentation.
What documents are typically required to buy?
Passport, valid visa/OCI card, PAN, overseas address proof, and Indian KYC. If you cannot attend registration, you may execute a Power of Attorney overseas (consularised/apostilled) and get it adjudicated/registered in India as per state rules.
What TDS does a buyer deduct when purchasing from a resident seller?
If the property value is ₹50 lakh or more, the buyer must deduct 1% TDS under Section 194-IA on the higher of consideration or stamp duty value, and deposit it using Form 26QB.
What TDS applies when buying from an NRI/OCI seller?
Section 195 applies (not 194-IA). TDS is deducted on the total consideration at the rate in force:
- LTCG (held >24 months): 12.5% (plus cess/surcharge) for transfers on/after July 23, 2024.
- STCG (≤24 months): at applicable slab rates (often ~30% plus cess/surcharge).
Sellers may apply for a lower TDS certificate (Sec. 197) to match actual gains.
Is rent from my Indian property taxable?
Yes. Rent is taxable in India. Tenants paying rent to an NRI/OCI landlord must deduct TDS under Section 195—typically 30% plus cess/surcharge—and file quarterly returns (Form 27Q) and issue Form 16A. There is no minimum threshold under Section 195 (unlike Section 194-IB for resident landlords).
What deductions can I claim on rental income?
A standard 30% deduction on net annual value is available, and pre-construction interest is deductible over five years for let-out property (subject to Income-tax rules).
What is the current LTCG tax for NRIs on property sales? (2025)
For transfers on/after July 23, 2024, long-term capital gains on real estate are taxed at a flat 12.5% without indexation under the revised Section 112.
What about sales before July 23, 2024?
Sales completed before that date continue to be taxed at 20% with indexation under the old regime.
Can I still claim capital gains exemptions (Sec. 54/54F/54EC)?
Yes—subject to conditions and timelines (investment in a new house or specified bonds). A lower TDS certificate can be sought in advance if you plan to reinvest so TDS reflects your net tax liability.
Who deducts TDS when I sell?
The buyer must deduct TDS under Section 195 when paying an NRI/OCI seller. This applies even if the buyer is a resident.
How is tax residency determined for NRIs?
Under the Income-tax Act, you are generally a non-resident if you are in India for less than 182 days in the financial year (with additional day-count tests). FEMA has separate rules for banking/FX compliance.
Do I need PAN/Aadhaar?
PAN is essential for most property and tax compliance. Aadhaar is not mandatory for NRIs, but it can simplify certain processes.
Should I apply for a lower TDS certificate before sale?
Yes, if your actual gain is lower than the default TDS. This can prevent excess tax being withheld and improve cash flow.
Any watch-outs during purchase?
- Ensure TDS is handled correctly (Section 194-IA for resident sellers; Section 195 for NRI/OCI sellers).
- Verify title, encumbrances, and builder approvals.
- For rent to NRI landlords, tenants must follow Section 195 (not 194-IB).
Disclaimer
The information in this FAQ is compiled from publicly available sources and reflects laws, rules, and government notifications in force as of August 2025. Regulations affecting NRIs/OCIs—including real estate, taxation, and foreign exchange—are subject to change by the Government of India, the Reserve Bank of India (RBI), and other authorities. This content is for general guidance only and does not constitute legal, tax, or investment advice. Before making any decision, please verify the latest provisions and consult a qualified professional (lawyer/CA/tax advisor) regarding your specific circumstances.