Owning property in India as an NRI carries tax obligations at four moments: purchase, holding, rental income, and sale. Each has its own rates, forms, and pitfalls. This cheat sheet is the complete reference for the India tax obligations that apply to NRI property owners in 2026. Structured tables you can reference in a minute, plus the downloadable PDF for offline use.
NRI Property Tax Cheat Sheet 2026
The complete cheat sheet on two printable pages. All rates, forms, and deadlines for NRI property tax obligations in India.
↓ Download PDF Cheat Sheet1. Tax Obligations at Purchase
When an NRI buys property in India, several tax events fire at the transaction. Stamp duty and registration are the most obvious; TDS on the seller is applicable if purchase value exceeds Rs 50 lakh; GST applies to under construction inventory. All of these apply to resident buyers too, but they are worth understanding because the NRI often has less visibility into how they are handled.
| Item | Rate or Rule | Notes |
|---|---|---|
| TDS by buyer on purchase over Rs 50 lakh | 1 percent of sale value | Form 26QB deposit within 30 days of month end |
| Stamp duty (Telangana) | Around 4 percent of higher of sale value or govt value | Applies to sale deed at registration |
| Transfer duty (Telangana) | Around 1.5 percent of higher of sale value or govt value | Additional to stamp duty |
| Registration fee | Around 0.5 percent of higher of sale value or govt value | Paid at SRO with the e Stamp |
| GST on under construction | 5 percent residential or 1 percent affordable | On sale value; not on ready to move |
The stamp duty structure in Telangana in 2026 combines stamp duty proper, transfer duty, and registration fee, totalling around 6 percent of the higher of transaction value or government notified value. NRI buyers pay the same rates as resident buyers.
2. Tax Obligations During Holding Period
Once you own the property, the ongoing tax obligations are relatively modest compared to purchase and sale. Property tax to GHMC (or the equivalent municipal body if outside GHMC) is the main recurring cost. Vacant land tax applies to plots. Rental income taxation is covered separately in section 3.
| Item | Rate or Rule | Notes |
|---|---|---|
| Property tax to GHMC | Varies by zone and property type | Annual, typically Rs 2,000 to 30,000 plus |
| VLT on vacant plots | GHMC rate for the specific zone | Annual, must register the plot for VLT |
| Deemed rental income (second property) | Taxable if 2 plus properties are self occupied | Owner can choose which is self occupied |
| Wealth tax | Abolished from AY 2016 to 17 | No wealth tax on Indian property since 2016 |
The deemed rental income rule: if an NRI owns two or more properties and treats them all as self occupied, tax law imputes notional rent on the extra properties. In practice most NRIs treat only one property as self occupied and any other as let out or vacant (which after 2020 is treated as let out for tax purposes).
3. Tax on Rental Income (Section 195)
This is where NRI taxation diverges most significantly from resident taxation. Section 195 of the Income Tax Act requires tenants of NRI landlords to deduct TDS at 31.2 percent on rent paid, before remitting the balance to the landlord. The 31.2 percent figure includes basic rate plus surcharge plus cess. Contrast this with a resident landlord under Section 194IB, where TDS is only 10 percent and only applies if annual rent exceeds Rs 2.4 lakh.
| Item | Rate or Rule | Notes |
|---|---|---|
| TDS by tenant on rent (Section 195) | 31.2 percent including surcharge and cess | Tenant deducts and deposits monthly |
| 30 percent standard deduction | On gross annual rent after municipal tax | For maintenance and repairs |
| Home loan interest deduction | Actual interest paid, no cap on let out | For let out property |
| Municipal tax deduction | Only if actually paid by owner | Deducted from gross rent |
| Effective tax rate | Slab rate on net rental income | File return to claim refund of excess TDS |
| ITR filing | ITR 2 for NRI with rental income | By 31 July following the financial year |
Rental income must be deposited to an NRO account, never NRE. This is a FEMA rule with meaningful consequences: Indian source income routed to NRE creates a compliance breach that can complicate future banking and taxation.
4. Tax on Property Sale (Capital Gains)
Selling property is where NRI taxation gets both complex and consequential. The gain is capital gains taxable, TDS applies at 20 percent on the sale value not just the gain, exemptions can eliminate the tax entirely if properly structured, and repatriation of proceeds has its own rules.
| Item | Rate or Rule | Notes |
|---|---|---|
| STCG (held under 24 months) | Slab rate; TDS at 31.2 percent | Higher rate; try to hold longer for LTCG |
| LTCG (held 24 months or more) | 20 percent with indexation OR 12.5 percent without | Section 112A gives choice from AY 2025 to 26 |
| TDS by buyer on LTCG sale | 20 percent plus cess and surcharge on total value | Not on gain only, hence Lower TDS route |
| Lower TDS Certificate (Section 197) | Reduces TDS to actual liability | Apply via Form 13 before sale, 4 to 8 weeks |
| Section 54 exemption | Reinvest gain in 1 residential property | Hold 2 years, deposit in CGAS if not used |
| Section 54F exemption | Reinvest full sale value in 1 residential | From non residential sale, conditions apply |
| Section 54EC bonds | Invest gain up to Rs 50 lakh in specified bonds | 5 year lock in, NHAI or REC bonds |
The choice between 20 percent with indexation and 12.5 percent without indexation was introduced in AY 2025 to 26 through Section 112A. For most long term holdings with meaningful indexation benefit, the 20 percent with indexation route works out cheaper. A CA calculation for the specific sale is worth doing before choosing.
5. Repatriation and FEMA Rules
Getting money out of India after a property sale is regulated by FEMA. The rules distinguish between NRE account funds (freely repatriable) and NRO account funds (limited to USD 1 million per financial year, subject to conditions). Property sale proceeds land in NRO by default, so most NRIs face the NRO limit rather than free NRE repatriation.
| Item | Rate or Rule | Notes |
|---|---|---|
| NRO repatriation limit | USD 1 million per financial year | Includes principal and rental income |
| NRE repatriation | Freely repatriable, no limit | For foreign source or eligible transfers |
| Form 15CA | Declaration by remitter | For all NRO outward remittances |
| Form 15CB | CA certificate on tax paid | For remittances above threshold |
| DTAA relief | Between India and country of residence | File Tax Residency Certificate to claim |
The USD 1 million per year limit is per NRI, not per property or per bank. Form 15CA is a declaration by the NRI, and Form 15CB is a CA certificate confirming applicable tax has been paid. Banks require both for outward remittance from NRO.
6. NRI Compliance Calendar
The tax obligations translate into a recurring compliance calendar. The compliance calendar is worth internalising because missing a deadline can be expensive. TDS on rent must be deposited monthly by the tenant. Quarterly TDS returns are filed by the tenant. Annual ITR filing by the NRI is due 31 July following the financial year end.
| When | What to Do | Where or Form |
|---|---|---|
| Every month | Deposit TDS on rent by tenant | Form 26QC or online e tax |
| Every quarter | File TDS return (tenant) | Form 26Q |
| 31 July | File Indian income tax return | ITR 2 online |
| 31 July | Pay self assessment tax if any | Challan 280 |
| Before sale | Apply for Lower TDS Certificate | Form 13, jurisdictional AO |
| On sale | Ensure buyer deducts correct TDS | Form 26QB if buyer resident |
| Post sale | File 15CA and 15CB for repatriation | Bank plus CA |
7. Costly Mistakes to Avoid
Most NRI property tax mistakes fall into a small set of recurring categories. Being aware of them upfront prevents the vast majority of avoidable costs.
Using DTAA to Reduce Overall Tax
India has Double Taxation Avoidance Agreements with most major countries where NRIs reside. DTAA lets NRIs claim credit in their country of residence for tax already paid in India, avoiding double taxation on the same income. To claim DTAA benefits, the NRI needs a Tax Residency Certificate from the country of residence filed with the Indian ITR. For capital gains on property sale, DTAA treatment depends on the specific treaty; in most treaties, India retains taxing rights on real property gains, but the residence country typically gives full credit for India tax paid.
What ProbityPM Handles for NRI Tax Compliance
Probity coordinates the full NRI property tax compliance cycle. This includes ensuring tenants deduct correct Section 195 TDS on rent, filing TDS returns on behalf of the landlord, applying for Lower TDS Certificate before sale, coordinating with a CA for annual ITR filing, and handling Form 15CA and 15CB for repatriation. For NRI owners who do not have a dedicated CA relationship in India, Probity partners with experienced NRI focused CAs to make the entire compliance flow seamless from abroad.
Get Expert Help from Probity
Probity manages 200 plus properties across 135 plus locations in Greater Hyderabad. Our team handles everything from physical verification to legal compliance, so NRI and absentee owners can manage their Hyderabad assets with complete peace of mind.
Frequently Asked Questions
Section 195 of the Income Tax Act requires tenants of NRI landlords to deduct TDS at 31.2 percent on rent paid, including basic rate plus surcharge plus cess. This is significantly higher than the 10 percent Section 194IB rate that applies to resident landlords, and it applies to gross rent without any threshold. Actual tax liability after 30 percent standard deduction and other allowances is usually lower, but the difference is refundable only after filing ITR the following year. A Lower TDS Certificate under Section 197 can bring the rate down to actual liability.
The buyer must deduct TDS at 20 percent plus applicable cess and surcharge on the total sale value, not just the capital gain. This creates a significant cash flow issue because actual tax liability is only on the gain. The Lower TDS Certificate under Section 197, obtained through Form 13 with the jurisdictional Assessing Officer 2 to 3 months before sale, directs the buyer to deduct only the correct amount matching actual liability. Without it, the excess sits with the government until ITR filing the following year.
Rental income from Indian property must be deposited to the NRI Ordinary (NRO) account, never the NRE account. This is a FEMA requirement because rental income is Indian source income. Depositing to NRE creates a compliance breach that complicates future banking and taxation. Tenants should be given only the NRO account details for rent transfers, and the NRO account should be opened with the specific purpose of receiving Indian source income before the first tenant is placed.
NRIs can repatriate up to USD 1 million per financial year from the NRO account, subject to Form 15CA declaration by the NRI and Form 15CB certificate by a Chartered Accountant confirming applicable Indian tax has been paid. This limit includes both principal and rental income remittances, not per property. NRIs who exceed the limit in a given year typically split repatriation across two financial years or use NRE routing where the funds originated from foreign remittance.
Section 54 exempts long term capital gains if reinvested in one residential property in India, held for at least 2 years. Section 54F extends similar treatment from sale of non residential assets if the full sale value is reinvested in one residential property. Section 54EC allows investment of gains up to Rs 50 lakh in specified NHAI or REC bonds with a 5 year lock in period. If the reinvestment is not completed by the ITR filing deadline, funds must be deposited in a Capital Gains Account Scheme (CGAS) to preserve the exemption.
Probity coordinates the full NRI property tax compliance cycle: ensuring tenants deduct correct Section 195 TDS, filing quarterly TDS returns, applying for Lower TDS Certificate before sale, coordinating with a CA partner for annual ITR filing, and handling Form 15CA and 15CB for repatriation. For NRI owners without a dedicated CA relationship in India, Probity provides access to experienced NRI focused CAs, making the entire compliance flow manageable from abroad without requiring the owner to interact with multiple Indian professionals directly.