NRI Guide to Buying & Selling Property in India

📢 Budget 2025-26 Highlights for NRIs NEW

• 💰LTCG Tax at 12.5% (no indexation): Property held > 2 years taxed at flat 12.5% on gains. Indexation benefit removed from July 2024. Simpler but may increase tax for properties held very long.
• 🏠TDS on NRI property sale remains 12.5%: Buyer must deduct 12.5% TDS (LTCG) or 30% (STCG) from sale amount and deposit to government before paying NRI seller.
• 📋No change in FEMA rules: NRIs can buy residential & commercial (not agricultural land). Purchase can be funded through NRE/NRO accounts or home loan from Indian bank.
• 🔄Repatriation: Sale proceeds of up to 2 properties can be repatriated. NRO to NRE transfer limit: USD 1 million per financial year (after tax clearance).
• 📉Section 54 exemption intact: NRIs can still claim exemption by reinvesting capital gains in a new residential property within 2 years (purchase) or 3 years (construction). Capped at ₹10 Cr.

✅ What NRIs Can & Cannot Buy

💰 Tax Rules: NRI vs Resident

📝 NRI Buying Process — Step by Step

• 1️⃣Open NRE/NRO Account: Payment must be through NRE, NRO, or FCNR accounts. No cash transactions allowed under FEMA.
• 2️⃣Get Power of Attorney (POA): If you can't be present, execute a POA from your country (attested by Indian Embassy/Consulate). Essential for registration.
• 3️⃣Home Loan: NRIs eligible for up to 80% LTV from SBI, HDFC, ICICI. Rate: 8.5-9.5%. Need Indian income proof or overseas income docs.
• 4️⃣Due Diligence: Same as residents — verify title, RERA, builder history. Use our Builder Report Card.
• 5️⃣Registration: Can be done by POA holder. Stamp duty and registration same as residents (6% + 1% in Maharashtra).
• 6️⃣File Form 2B (RBI): Within 90 days of purchase, file Form 2B with RBI through your bank.

📎 Documents Required

🔴 Selling Property as NRI

• ⚠️TDS is non-negotiable: Buyer MUST deduct TDS. If they don't, the buyer is liable. Many NRI deals fall through because buyers don't understand this.
• 💸Repatriation of sale proceeds: Up to 2 properties. Transfer NRO → NRE (up to $1M/FY). Need CA certificate (Form 15CB) and bank undertaking (Form 15CA).
• 📉Section 54 Exemption: Reinvest capital gains in new residential property within 2 years (buy) or 3 years (build). Or use Section 54EC — invest up to ₹50L in bonds.
• 📝File Indian Tax Return: Mandatory in the year of sale. Claim TDS refund if excess was deducted. Use CA in India.

🌍 Double Taxation Relief (DTAA)

• 🇺🇸USA: India-US DTAA allows tax credit. Tax paid in India can be claimed as Foreign Tax Credit on US returns (Form 1116).
• 🇬🇧UK: Similar relief under India-UK DTAA. Capital gains taxed in India, credit in UK.
• 🇦🇪UAE: No income tax in UAE. Pay full tax in India only. No double taxation issue.
• 🇸🇬Singapore: India-Singapore DTAA provides relief. File in both countries, claim credit.
• 🇨🇦Canada: India-Canada DTAA applies. Claim Indian tax as credit in Canada.