Tax & Finance
An NRI's working guide to Indian property, tax and documentation
Distance turns straightforward transactions into logistics. Most of the friction is solvable with documentation prepared in the right order.
Start with residency, not with the asset
Your tax position in India is driven by residential status for the relevant year, which is determined by presence in India under defined tests. Residency determines what income is taxable here, which reliefs apply and what disclosures are required.
It also changes year to year, so an arrangement that worked previously may need revisiting.
Buying property from abroad
Purchases are usually workable remotely, provided funding routes, banking channels and a properly drafted power of attorney are set up in advance. The POA should be scoped narrowly to the transaction, correctly attested for the country you are in, and prepared before timelines get tight.
Selling: the TDS question
When an NRI sells Indian property, the buyer's deduction obligation differs from a resident transaction, and the amount deducted is frequently higher than the seller's actual liability. Where that is the case, there are procedural routes to address it, but they need to be initiated before or around the transaction, not at filing time.
Repatriating proceeds
Repatriation is a documentation exercise: evidence of the source of funds, tax compliance certification and the prescribed bank forms. Assembled during the transaction, it is routine. Assembled afterwards, it becomes a retrieval problem across institutions and time zones.
Annual obligations while you hold
Rental income, interest and capital gains arising in India generally require annual filing, and TDS suffered needs to be reconciled against the return. Keeping this current also makes an eventual sale or repatriation substantially simpler.
Frequently asked
Do I need to be in India to complete a property transaction?
Often not, if a correctly drafted and attested power of attorney is in place before execution. The requirements depend on the transaction type and your location.
Is rental income from Indian property taxable in India?
Income arising in India is generally taxable in India, subject to the applicable treaty position. The treatment should be assessed against your residency status for the relevant year.