Rental income, maintenance, taxation, compliance and currency movements can significantly affect returns for Indians living abroad
PRAVASISAMWAD.COM
For Non-Resident Indians (NRIs), owning property in India can provide long-term wealth creation and rental income, but experts caution that it should not be treated as a passive investment, reported livemint.com.
Property ownership from overseas involves regular management, taxation, documentation and compliance requirements.
In the report Gaurav Matta, co-founder of NRI-focused platform NRiSimplify, quoted as saying that Indian real estate required continued attention after purchase. Owners may need to manage tenants, collect rent, arrange repairs, pay property taxes and keep documentation in order.
Distance can make these responsibilities more difficult. Housing society disputes, maintenance problems and prolonged vacancies may require intervention from a trusted representative or professional property manager. Neglecting such issues could result in higher repair costs or disputes over occupation.
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NRIs must also comply with applicable Foreign Exchange Management Act (FEMA) requirements when buying or selling property
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Rental income earned in India is taxable, while owners need appropriate PAN and tax records
Selling a property can involve additional complications, including capital gains tax, tax deducted at source (TDS) and procedures for transferring sale proceeds abroad. The money may need to move through permitted banking channels, including relevant NRE or NRO accounts, with supporting tax documentation.
Currency movements are another consideration. A property may appreciate in rupee terms but generate a lower return when converted into the currency of the country where the NRI lives. Mint cited an example in which a ₹2 crore property that was worth about $238,000 in October 2024 was valued at roughly $208,000 at the exchange rate cited in the report, despite no fall in its rupee value.
Brokerage, legal costs, maintenance charges, taxes, repairs and periods without tenants can further reduce returns.
For NRIs, therefore, property investment requires a clear strategy covering acquisition, management and eventual sale rather than a simple buy-and-forget approach.
