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.
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.