NRI GUIDE TO PROPERTY DEALS
IN INDIA
The essential checklist covering TDS, PoA and more to help avoid costly tax, compliance and documentation mistakes.
(1) The rupee return illusion
- Measure returns in the currency you’ll ultimately use. ► Gains in rupees can shrink after accounting for currency depreciation.
(2) Pick the right account
- NRE/FCNR account: entire principal can be repatriated.
- NRO account: repatriation capped at $1 million a year.
Capital gains remain subject to the $1 million annual cap.
(3) Route sale proceeds to NRO account
- An NRI buyer and seller cannot settle a property transaction through their NRE accounts.
(4) Don’t ignore TDS
- Buyer must deduct 12.5% TDS (plus applicable surcharge and cess) on long term capital gains.
(5) Selling to family? You may not need a sale deed
- Save stamp duty by transferring property via:
• Gift deed
• Relinquishment deed • Family settlement deed
(6) How a PoA works
- Both steps are essential:
• Embassy/Consulate attestation (or apostille, where applicable)
• Registration at the local sub-registrar’s office in India
(7) Rental income
- Ensure your tenant deducts TDS before paying rent.
- TDS is 30% (plus applicable surcharge and cess).
(8) Avoid delays by keeping key documents ready
- Seller must have a PAN card.*
- Original (or certified copy of) sale deed.
- Legal heir/succession certificate (if the property is inherited).
- Freehold conversion deed (if applicable).
PoA: Power of Attorney, NRE: Non-Resident External, FCNR: Foreign Currency Non-Resident, NRO: Non-Resident Ordinary, TDS: Tax Deducted at Source
- Otherwise, TDS will be deducted at 20% plus surcharge and cess.
