He spotted a clause he disagreed with, but the builder declined to make any changes, stating it’s a standard contract in line with the Real Estate Regulatory Authority (RERA) rules. Chaturvedi’s workaround was to insist on a written email confirming that interpretation before signing.
For non-resident Indians (NRIs), buying a property in India can be a complex affair, involving dense legal paperwork, state-specific regulations, and a level of due diligence that demands far more scrutiny than one would expect. We break down the basics.
Essential NRI due diligence
The checklist for NRIs investing in property should begin with full title verification, covering ownership history, encumbrances and ongoing disputes, if any. “If the proposed purchase is in new or under-construction projects, verification of the builder’s sanctioned plans, commencement certificate, RERA registration, and environmental approvals is mandatory,” said Sanjay Daga, CEO and MD of Anex Advisory, a real estate consultancy.
It’s equally important to confirm possession or completion certificates for ready units. NRIs should review mutation records, property tax receipts and utility dues, making sure there are no outstanding liabilities. Stamp duty varies from state to state and can depend on the buyer category and ready-reckoner rates. Hence, every buyer should check the exact state rules before signing on the dotted line. “Maharashtra, for instance, levies a rate between 5% and 7%, but other jurisdictions have their own unique structures and potential discounts. Confirm the specific rates before buying to stay within the rules,” says Santhosh Kumar, vice chairman of Anarock Group, a property consultant.
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NRI Property Tax Guide
“On the tax side, when an NRI buys property from a resident (value above ₹50 lakh), TDS of 1% on the sale consideration applies. For an NRI buying from an NRI, TDS is on sales value under Section 195, typically 12.5% plus cess plus surcharge on sales value in case of long-term capital gain. In case of short-term capital gain, it is taxed as per slab rates,” said Priyal Goel Jain, partner and NRI tax expert, Dinesh Aarjav & Associates, Chartered Accountants.
The TDS here is deducted by the NRI (buyer) and has to be deposited with the Income Tax Department.
NRIs can pay a seller or builder using money sent through normal banking channels. The payment can come from an NRE account, an NRO account, or by sending money directly from abroad. Money earned abroad usually goes into an NRE account, but it can also be deposited into an NRO account if needed. Money earned in India is generally kept in the NRO account. An NRE account is helpful but not compulsory for making such payments.
NRIs should note that the use of cash in any part of a property transaction can trigger income-tax penalties, making it essential to maintain a fully traceable digital or banking trail. NRIs should also be mindful of cross-border reporting requirements in the country where they reside, as non-disclosure of Indian assets may create complications abroad.
Dubai-based Gaurav Butan, 37, head of finance at a professional services firm, found the builder–buyer agreement particularly challenging. The process became even more complicated since he was purchasing the property jointly with a resident Indian.
“Though I’m a CA myself, this required professional on-ground support, so I hired the services of a CA firm to help me with compliance related to TDS and documentation with the banks, etc,” said Butan.
Smarter Remote Property Maintenance
After purchase, managing property remotely requires a robust system that compensates for the owner’s absence. Since brokers and property managers are not governed by any formal regulator, NRIs must depend on professional service providers with transparent contracts and defined responsibilities.
“The Resident Welfare Association (RWA) can be given a limited PoA to inspect the property, monitor damages, and report maintenance issues. In practice, NRIs should change tenants more frequently, ensuring that no single tenant occupies the property for excessively long periods,” said Jain.
This approach allows for periodic inspections, prevents deterioration, and ensures that the property remains in optimal condition. Leave and licence agreements—preferred over traditional tenancy agreements—offer better operational flexibility and cleaner exit mechanisms.
NRIs can use professional property-management firms that offer periodic inspections, digital records, and local vendor coordination. “Many owners adopt cloud-based platforms to track maintenance tickets, invoices, and rent. Gated communities often provide online management portals that log repairs and service charges,” said Sharad Sharma, principal partner & sales director, Square Yards.
“Regular virtual or physical property inspections are a must, and transparent contracts with service providers further preserve the asset and maintain seamless maintenance,” said Kumar.
“My real challenge has been long-distance maintenance. During one of my visits to India, I identified a reliable contractor through a personal referral, and they’ve become my first point of contact for any upkeep or small repairs,” said Chaturvedi.
Smarter Rental Strategies for NRIs
NRIs often receive below-market rents because they rely heavily on unregulated brokers and have limited visibility into local rental trends. Tenants also negotiate aggressively with NRIs due to the compliance burden placed on them—monthly TDS deductions, quarterly Form 26Q filings, Form 16A issuance, and Form 15CA/CB submissions for overseas remittances.
As India still lacks a government-verified rental benchmark system, NRIs depend on subjective broker estimates that may not reflect true market value. “To address this, NRIs should periodically review rental yields, consider independent valuation, and reassess tenant profiles regularly. The absence of a standardized rental-yield mechanism is a structural issue, and a regulated rental index would significantly improve transparency for absentee landlords,” said Jain.
A realistic range can be established by benchmarking rents through local online listings, municipal ready-reckoner values, and micro-market rental studies. “NRIs should consult with professionals or real estate experts who can give them a fair sense of going rentals,” said Sreepriya N.S., CEO, Entrust Family Office.
Plan Ahead for Smooth Repatriation
When selling, NRIs face a fresh set of compliance and repatriation rules. For smooth and unhindered repatriation of proceeds, all original purchase documents, past TDS certificates, maintenance and tax receipts, and bank documents showing the original source of funds should be organized and maintained. “Generating a fresh and updated valuation report will help anchor the asking price and aid in capital gains computation. Before selling property, NRIs can apply for a lower- or nil-TDS certificate if their actual tax liability will be low,” says Daga.
“The shift to a 12.5% LTCG rate without indexation for sales post July 23, 2024, simplifies taxation for NRIs in India, but complicates matters abroad, as many countries do not recognize India’s exemptions, including those under Section 54. Sale proceeds must flow into the NRO account, from which repatriation of up to $1 million per financial year can be made after completing Form 15CA/CB formalities,” says Jain.
With proper pre-sale structuring, NRIs can avoid discounted offers, ensure compliance, and repatriate funds seamlessly.
“For repatriation, FEMA rules generally allow transfer of up to the sale proceeds for up to two properties per financial year with proper documentation. Ensuring all tax filings and challans are in order facilitates a smoother banking process,” said Sharma.
“In a nutshell, hiring services of experts like a local lawyer, a trusted dealer and a chartered accountant will help ease out the process and keep you informed,” said Butan.
NRIs can ace India’s property game by working with credible professionals, using digital oversight tools, planning repatriation early, and treating documentation, compliance, and maintenance as non-negotiable pillars of smooth ownership.
