Why do NRIs want a piece of India's real estate?
Asked by: Hollis Schoen | Last update: September 3, 2025Score: 4.7/5 (5 votes)
For NRIs, investing in Indian real estate is an excellent way to diversify their portfolio. While many invest in stocks, mutual funds, or real estate abroad, the Indian market provides a balance of risk and return. Real estate offers a tangible and relatively stable asset in a fast-growing economy.
Why are NRIs investing in Indian real estate?
NRI investment in Indian real estate offers high long-term capital appreciation, rental income potential, favourable exchange rate, easy investment process, and portfolio diversification – providing them with stable assets and valuable returns amidst growing market demand.
Is it a good idea for NRIs to buy property in India?
Yes, it is a good idea for NRIs to buy property in India, as it offers long-term growth, potential rental income, and a stable asset in a growing market.
What happens if an NRI buys a property in India does he need to pay property tax?
If an NRI procures an immovable property from a resident, TDS must be deducted at a rate of 1% if the sale consideration exceeds ₹50 lakh. On the other hand, when acquiring property from a non-resident and if long-term capital gains (LTCG) are applicable, the TDS deduction rate should be 20%.
Can NRI buy property in India without visiting India?
Yes, a Non-Resident Indian (NRI) with a Power of Attorney (POA) can purchase real estate in India without visiting India. An NRI may grant a POA to a friend or relative in order to conclude a transaction in India.
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Can a US citizen inherit property in India?
Yes, foreign citizens can inherit property in india. Though they have no right to acquire land meant for farming purposes directly; such people are allowed to do so through inheritance procedures. But then there might be limitations imposed on selling this type of property.
Can I buy property in India if I am a US citizen?
Can US citizens buy property in India? Yes, a US citizen can purchase property in India. As per the regulations set by the RBI and FEMA, they are eligible to buy immovable property in India which includes residential and commercial properties.
Can NRI inherit property in India?
A Non-Resident Indian (NRI), can inherit immovable property in India in two ways: Valid Will, i.e., testamentary succession; or. Laws of intestate succession i.e., when a person passes away without writing a valid Will and the property is inherited as per the relevant succession laws in India.
Can OCI buy property in India?
Both NRIs and OCI have the permission to buy both commercial and residential property in India. You do not need to submit any intimation or send any communication to the Central Bank for the purchase of a property. NRIs cannot buy agricultural land, plantation or farmhouses in India.
How to avoid tax on property sale in India?
- Joint Ownership. ...
- Reducing Selling Expenses. ...
- Holding Period. ...
- Availing Indexation Benefit. ...
- Buying a New Property (Exemption under Sec 54) ...
- Buying a New Residential Property (Exemption under Sec 54F) ...
- Tax Loss Harvesting. ...
- Investing in Bonds (Exemption under Sec 54EC)
How long can an NRI stay in India?
Yes, an NRI can stay in India for more than 182 days during the financial year. However, this will change his/her residential status from NRI to a resident. In other words, an NRI has to stay in India for less than 182 days in an FY in order to retain his/her NRI status.
Can NRI sell his property in India?
Subject to the relevant Foreign Exchange Management Act, 1999, (FEMA) regulations, as an NRI or an OCI, you may sell any residential or commercial property in India to: A person resident in India; or. Any NRI/OCI.
Is buying property in India worth it?
A: Absolutely! Real estate can be a great investment option in India, as it offers appreciation potential, rental income, tax benefits, and diversification. But, like any investment, it's essential to do your research and consider the pros and cons before jumping in.
Why do foreigners invest in India?
India's Foreign Institutional Investment (FII) landscape offers immense opportunities driven by robust economic growth, a thriving capital market, and investor-friendly reforms. With strong macroeconomic fundamentals and a focus on financial inclusion, India has become a preferred destination for global investors.
What are the tax implications for NRI investing in India?
When NRIs invest in certain Indian assets, they are taxed at 20% on the income earned. If the special investment income is the only income the NRI has during the financial year and TDS has been deducted, then such an NRI is not required to file an income tax return.
How NRIs manage property in India?
- Options for Property Management Available for NRIs.
- Hiring a Professional Property Management Company.
- Utilising Technology for Property Oversight.
- Regular Communication With Tenants.
- Virtual Property Inspections.
- Financial Management and Record-keeping.
Can OCI live in India forever?
Overseas Citizenship of India (OCI) is a form of permanent residency available to people of Indian origin which allows them to live and work in India indefinitely.
Does OCI pay tax in India?
Taxation of OCIs
If an OCI is classified as a resident under these criteria, their global income will be taxed in India. “Any earnings, regardless of location, will be subject to Indian income tax," says Pallav Pradyumn Narang, partner, CNK. If classified as a non-resident, their taxation is different.
How to protect NRI property in India?
- Maintain Comprehensive Property Documents. Ensure clear legal titles and registered deeds. ...
- Update Records and Register Ownership. ...
- Secure Vacant Properties. ...
- Proper Management of Rented Properties.
Do NRI pay property tax in India?
TDS on Property Purchase: If an NRI purchases property worth over ₹50 lakh from a resident seller, TDS at 1% is applicable. For non-resident sellers, the TDS is 20% for long-term capital gains (LTCG) and 30% for short-term capital gains (STCG). TDS must be deposited within 30 days of deduction
Can a US citizen buy property in India?
Foreigners can largely buy residential and commercial properties in India. However, agricultural land, plantation property, and farmhouse property come under restrictive categories.
How many residential properties is an NRI allowed in India?
Whether it is a residential or commercial property, NRIs have the right to invest in the property and there is no restriction on the number of properties that you can own as an NRI. There is no requirement to avail any specific permission from any authority, nor is there any FEMA guideline regarding property purchase.
Can I sell property in India and bring money to USA?
NRIs are allowed to repatriate or bring their sale proceeds of property sold in India to the US. However, the limit to the amount brought from India is $1 million per calendar year, including all other capital account transactions.
What is the difference between OCI and NRI?
It can be for a temporary duration. The basic difference between NRI and OCI is that NRIs will continue to have their Indian citizenship, and the OCIs will have their respective citizenship based on the country of their origin.