NRI Property in India: Costs, Taxes and Risks Before You Buy, Rent or Sell (2026) - Sidus Realty
Guide

NRI Property in India: Costs, Taxes and Risks Before You Buy, Rent or Sell (2026)

NRI Property in India_ Costs, Taxes and Risks

NRI Property in India: Costs, Taxes and Risks Before You Buy, Rent or Sell (2026)

Written by Ashish Goyal, founder of Sidus Realty, 15 years in Kolkata real estate. Rates, prices and rules checked on 7 October 2026.

Short answer: Eligibility is the easy part for an NRI. The money is where buyers get caught. In Kolkata you pay stamp duty of 6% up to ₹1 crore and 7% above it, plus about 1% registration, and GST of 5% on an under-construction flat. If you rent the flat out, the tenant deducts 31.2% TDS. If you sell, the buyer deducts TDS on the full sale price by default, and long-term gains are taxed at a flat 12.5% with no indexation.

Almost every large NRI loss traces back to one of five things: a weak title check, a wrong payment channel, TDS that was never reduced, a tax return that was never filed, or a property nobody was watching. This guide covers those costs and checks. For eligibility, Power of Attorney, home loans and repatriation, use the pages in our NRI section.

Most NRI guides spend their length on who may buy. That matters, but the rules are short. What decides whether a purchase works out is cost, tax and risk, and those are what the rest of this page covers. We are a zero-brokerage channel partner, which means the developer pays us and you pay nothing for our advice, so we are not neutral on whether you buy. We are neutral on how to do it safely, and every figure below was checked against a source listed at the end.

NRI property costs and tax rules at a glance (2026)

Topic Short answer
Stamp duty and registration in Kolkata 6% up to ₹1 crore, 7% above, plus about 1% registration
GST on an under-construction flat 5%, or 1% for affordable housing; none on a ready flat with a completion certificate
TDS on rent paid to an NRI landlord 31.2%, unless you hold a lower-deduction certificate
TDS when an NRI sells property Buyer deducts on the full sale price by default
Tax on long-term sale gains (held over 24 months) Flat 12.5%, no indexation, plus surcharge and cess
Sale proceeds sent abroad Up to USD 1 million per financial year from an NRO account
Penalty for buying restricted land (farmland, farmhouse, plantation) Up to three times the transaction value

The rest of this guide explains each row, in the order you will meet them.

Read these first: eligibility, Power of Attorney, loans and repatriation

This guide does not repeat the basics we cover in our NRI section. Start there if you need them:

The rest of this page covers what those pages leave out: the buying checks, the costs, the tax on rent and sale, and the mistakes.

How to buy property in India as an NRI: step by step

  1. Decide the purpose. Self-use, rental income, appreciation or a future return home. The most common NRI regret is buying the right asset for the wrong purpose.
  2. Fix your budget and funding route. Decide how much comes from your NRE or FCNR(B) savings and how much from an Indian home loan.
  3. Shortlist projects and micro-markets. Visit in person, or do a video walk-through with a trusted local adviser.
  4. Verify the developer and the project. Check the project’s registration number on the state RERA portal before you pay anything.
  5. Run legal due diligence. Have a property lawyer trace the title chain, pull the encumbrance certificate and review approvals (see the due-diligence section below).
  6. Negotiate and sign the Agreement for Sale. Put the payment schedule, possession date and penalty terms in writing.
  7. Pay through banking channels only. Cash and informal routes are illegal for NRIs and can bring severe penalties.
  8. Pay stamp duty and register the deed. Registration at the sub-registrar’s office is what transfers title. An unregistered agreement does not.
  9. Take possession and mutate the property. Mutation updates the municipal and revenue records in your name. It does not create title, but it protects you from tax and ownership disputes later.
  10. Set up tax and rental compliance. Pay property tax each year and, if you rent the property out, plan for TDS and return filing.

Documents you usually need

  • Passport and visa or work permit (and OCI card, if you hold one)
  • PAN card
  • Address proof in India and abroad
  • Recent passport-size photographs
  • NRE and NRO account statements (for a loan, typically the last six months)
  • Power of Attorney, if someone signs for you

Documents to collect on the property

  • Title deeds, including earlier deeds in the chain
  • Updated encumbrance certificate
  • Mutation records and property tax receipts
  • Sanctioned building plan, commencement certificate and, for ready homes, completion or occupancy certificate
  • Project RERA registration certificate

What you pay on purchase: GST, stamp duty and registration

These charges are set by law and by the state. NRIs pay the same as residents, and no developer can waive them, only absorb them into a price cut.

Item Rate in Kolkata and other municipal areas
Stamp duty, property up to ₹1 crore 6%
Stamp duty, property above ₹1 crore 7%
Registration fee About 1%
GST, under-construction flat 5% (1% if the flat costs up to ₹45 lakh and has carpet area up to 60 sq m)
GST, ready flat with completion or occupancy certificate None
Concession for women buyers None in current guidance
  • The Covid-era stamp duty rebate has ended. Older blogs and some online calculators still show it, so do not budget from them.
  • Duty is charged on the higher of the agreement value and the government’s assessed market value. West Bengal calls this floor value the market value, and buyers often call it the circle rate.
  • Budget 7% to 8% of the price for stamp duty and registration, and add GST if the flat is under construction. Then add legal fees and, for a flat you will rent out, maintenance costs.

Rates and rules change. Run your own numbers in our total cost calculator, read how the festive offers interact with these charges in our Puja 2026 buying guide, and confirm the figures for your specific property with Sidus before you commit.

Tax on rental income for NRIs

Rent from an Indian property is India-sourced income, so it is taxed in India whichever country you live in.

  • TDS on rent: the tenant must deduct tax at source at 31.2% of the rent, every month, unless you hold a lower-deduction certificate.
  • Where the rent goes: into your NRO account.
  • Actual tax: you are taxed on net rental income. You can claim a 30% standard deduction, municipal taxes paid and home loan interest, so the real liability is usually much lower than the TDS.
  • Refund: if TDS exceeds your actual tax, you claim the difference when you file your Indian income tax return. Filing is compulsory if you have rental income.
  • Lower or nil TDS: you can apply to the Assessing Officer for a certificate that lets the tenant deduct at a lower rate. Tax practitioners report effective rates of 7% to 10% after such certificates.
  • Double taxation: India has tax treaties (DTAA) with about 90 countries, including the US, UK, Canada, Australia, Singapore and the UAE. For rental income, the treaty usually lets India tax it, and you claim a credit for that tax in your home country.

Be realistic about yield. Residential rental yields in Indian metros are often 2% to 4% a year before tax. Treat rent as a bonus on top of appreciation, not as a retirement income plan.

Since 1 April 2026 the Income-tax Act, 2025 has replaced the 1961 Act, and the old Section 195 TDS rule on payments to non-residents now sits under Section 393(2). Rates have largely carried over, but form and section numbers have changed, so ask your CA to quote the right references. Our KMC property tax guide covers the annual municipal tax separately.

Selling property in India as an NRI: TDS, capital gains and sending money abroad

Selling is where NRIs most often lose money to avoidable mistakes. Plan the tax and the transfer before you sign a sale agreement.

TDS when the seller is an NRI

A resident seller faces 1% TDS on a property sale. An NRI seller does not. The buyer must deduct tax under the NRI rules (Section 195, now Section 393(2) of the Income-tax Act, 2025), at the capital gains rate, and on the full sale price by default, not only on the profit.

Holding period Gain type Rate used for TDS and tax
More than 24 months Long-term 12.5% flat, no indexation, plus surcharge and 4% cess
24 months or less Short-term Taxed at slab rates; TDS is often at 30% plus surcharge and cess

Why the default TDS hurts: a worked example

Illustration: you bought a flat for ₹50 lakh and sell it for ₹90 lakh after more than 24 months. Figures are before any surcharge and include 4% cess.

Calculation Amount
Your actual gain ₹90 lakh minus ₹50 lakh ₹40 lakh
Tax actually due 12.5% of ₹40 lakh, plus 4% cess About ₹5.2 lakh
TDS the buyer can withhold with no certificate 12.5% of ₹90 lakh, plus 4% cess About ₹11.7 lakh
Your money held back until you claim a refund ₹11.7 lakh minus ₹5.2 lakh About ₹6.5 lakh

The fix: apply to the Assessing Officer for a lower-deduction certificate (Section 197 under the old Act) before the sale closes, so TDS is computed on the actual gain. Do not wait to claim a refund later. It is not automatic and it takes time, so apply early. Many online calculators still use the old 20% rate with indexation. Since the July 2024 Budget, the flat 12.5% applies to NRIs.

Ways to reduce long-term capital gains tax

  • Section 54: reinvest the gain in another residential house in India (bought within 1 year before or 2 years after the sale, or built within 3 years).
  • Section 54EC: invest the gain in specified bonds within six months, up to ₹50 lakh per financial year.
  • Section 54F: for non-residential assets, reinvest the net sale proceeds in a residential house, with conditions.

These reliefs have conditions and the section numbers change under the 2025 Act, so confirm the current rules with a chartered accountant.

Sending the money abroad

Sale proceeds land in your NRO account first, and the annual cap is USD 1 million per financial year after tax. The forms and steps are in our repatriation guide. Two tax-side traps: file your Indian return first, because CAs will not certify tax paid before the income is in a filed return; and if you sell more than 10% below the government’s assessed value, the tax department can use that value to compute your gain.

WBRERA and due diligence in West Bengal

Check WBRERA before you pay a booking amount. West Bengal first passed its own housing law (WBHIRA) instead of adopting the central RERA Act. After that law was struck down, the central RERA framework took effect in the state, and the West Bengal Real Estate Regulatory Authority (WBRERA) has been operating since December 2022.

What RERA registration gives an NRI buyer:

  • A registered project number and public documents (title, sanctioned plan, layout, delivery date) on the WBRERA portal.
  • An escrow rule: 70% of buyer payments must sit in a separate project account and be used only for that project’s construction and land cost.
  • A grievance route: you can file complaints on the portal, from abroad.
  • Plan protection: the developer cannot change the sanctioned plan without buyers’ written consent.

Projects started before RERA came into force are not all covered the same way, so ask the developer which category the project falls under.

Due-diligence checklist for Kolkata

  1. Title chain: trace ownership through the last 30 years at the registration office. A sale deed in the seller’s name with records still in a predecessor’s name is a yellow flag.
  2. Encumbrance certificate: confirms there are no registered mortgages or liens.
  3. Land records: check the record of rights (khatian) and the land-use classification on the state land records portal.
  4. Mutation and tax receipts: confirm the seller’s name in the municipal records and that property tax is paid up to date.
  5. Approvals: sanctioned building plan from the municipal body (KMC, NKDA or the local municipality), plus fire and environmental clearances where applicable.
  6. Completion or occupancy certificate: for ready homes. If it is pending, do not release the final payment.
  7. Developer track record: past deliveries, litigation and the RERA complaint history.
  8. Seller identity: match PAN, Aadhaar and passport against the title documents.

Hire an independent property lawyer. Do not rely only on the developer’s panel. Our Sidus Score shows how we screen projects before they reach a shortlist.

What Kolkata’s market is doing for NRI buyers in 2026

Kolkata is a steady, end-user-led market, not a speculative one. That suits NRIs buying for family use, a future return or long-term holding, and it is why you should read the numbers rather than the hype.

Measure Latest figure Source
Homes sold, July to September 2026 About 3,980, down 4% year on year Anarock, Q3 2026
New homes launched, July to September 2026 About 4,680, ahead of sales Anarock, Q3 2026
Citywide capital value, Q2 2026 ₹5,952 per sq ft, up 2.2% on the quarter JLL
East Kolkata price movement Up 14.6% year on year, led by luxury launches JLL, Q2 2026
Luxury homes (₹3 crore to ₹5 crore) share of launches 24% JLL, Q2 2026
Unsold inventory, end of Q2 2026 18,469 units JLL

JLL and Anarock define markets differently, so compare each figure with its own earlier readings, not with the other source. The takeaway is steady demand, ample supply and room to negotiate. Our locality pages cover New Town, Rajarhat, EM Bypass, Alipore and Ballygunge in detail.

A balanced view on the NRI angle

  • A weaker rupee lowers your foreign-currency cost, but it does not guarantee a foreign-currency profit. Judge the investment in the currency you measure your wealth in.
  • Compare net yield, appreciation and liquidity with alternatives before you commit.
  • Premium, completed or near-completed homes from established developers are where NRI demand is concentrated, because you can inspect what you buy and the delivery risk is lower.

Common NRI property mistakes, scams and managing a property from abroad

Mistakes that cost the most

  • Skipping legal due diligence and trusting the seller’s or developer’s word
  • Buying agricultural or farmhouse land that is later flagged under FEMA
  • Paying through the wrong channel, such as cash, a relative’s account or informal routes
  • Signing a sale through a general PoA only, which does not transfer ownership
  • Letting the buyer deduct TDS on the full price instead of applying for a lower-deduction certificate
  • Letting property tax lapse because the receipt never reaches you abroad
  • Buying for yield when yields are modest, then being surprised by TDS and maintenance

Scams to watch for

  • Title fraud: someone sells a property they do not own, using forged documents
  • Duplicate or forged papers: fake certificates and fake RERA numbers. Verify on the official portal yourself
  • “Assured return” schemes: guaranteed rent promises that are never honoured
  • Unauthorised use by a caretaker: an unchecked caretaker rents the flat out or claims possession

Managing your property from overseas

  • Appoint a trusted local representative or a professional property manager, with a written scope.
  • Keep tax receipts, mutation papers and the registered deed in a shared digital folder. Our free Dhruva portfolio and rent tracker can hold them with your rent records.
  • Register an Indian rent agreement in your name for any tenant, and route rent to your NRO account.
  • Inspect the property on every visit, and treat a silent caretaker or a missed tax receipt as a warning sign.
  • Keep the PoA narrow and revoke it once the work is finished.

NRI property buyer checklist

Before you buy

  • ☐ Confirm your status: NRI, OCI or foreign citizen
  • ☐ Confirm the property is residential or commercial, not agricultural, plantation or farmhouse
  • ☐ Open or check your NRE, NRO or FCNR(B) account
  • ☐ Verify the project and the agent on the WBRERA portal
  • ☐ Appoint an independent property lawyer
  • ☐ Review title chain, encumbrance certificate, approvals and mutation records

While you buy

  • ☐ Sign an Agreement for Sale with payment schedule and possession date
  • ☐ Pay only through banking channels, and keep every receipt
  • ☐ Execute a narrow, registered Special PoA if you cannot attend
  • ☐ Pay stamp duty and register the sale deed

After you buy

  • ☐ Mutate the property in your name
  • ☐ Pay property tax every year
  • ☐ Register any rent agreement and route rent to your NRO account
  • ☐ File your Indian income tax return if you earn rent

Before you sell

  • ☐ Apply for a lower-deduction certificate before the sale closes
  • ☐ File your return, then get the CA certificate and remittance declaration
  • ☐ Plan reinvestment or bond purchases if you want to reduce capital gains tax
  • ☐ Stay within the USD 1 million annual repatriation limit

NRI property costs and taxes: frequently asked questions

How much stamp duty does an NRI pay in Kolkata?

NRIs pay the same as residents: 6% on property up to ₹1 crore and 7% above that in Kolkata’s municipal areas, plus about 1% registration. Verify current rates before you budget, because rules change.

How is rental income taxed for an NRI?

Rent is taxable in India. Tenants must deduct 31.2% TDS unless the NRI holds a lower-deduction certificate. The final tax depends on net rental income, so you file an Indian return and claim a refund if TDS exceeds the tax due.

What is the TDS when an NRI sells property in India?

The buyer deducts TDS under the NRI rules on the full sale price by default. Long-term gains (held over 24 months) are taxed at 12.5% without indexation, plus surcharge and cess. A lower-deduction certificate can cut TDS to the actual gain.

How can an NRI reduce TDS on a property sale?

Apply to the Assessing Officer for a lower-deduction certificate before the sale closes. It lets the buyer deduct tax on your actual capital gain instead of the full price. It is not automatic, so apply early.

How can an NRI save capital gains tax on a property sale?

Reinvest the long-term gain in another residential house in India within the allowed window, or invest it in specified bonds within six months, up to ₹50 lakh a year. Both reliefs have conditions, so check them with a chartered accountant.

Does an NRI have to file an income tax return in India?

Yes, if you earn rent from Indian property or sell property, you should file. It is how you claim a refund of excess TDS and report your gains. A CA also needs a filed return to certify remittances abroad.

Does an NRI pay property tax in India?

Yes. Property tax is an annual levy by the local municipal body on every property, whether or not you live there. Missed payments build up silently, so set up a local person or service to pay and send you the receipts.

What is the biggest risk when an NRI buys property from abroad?

A defective title. Trace ownership for the last 30 years, pull the encumbrance certificate, check mutation records and verify the project on the WBRERA portal before paying a booking amount. An independent property lawyer should do this.

Is Kolkata a good place for NRIs to invest in property?

Kolkata is a steady, end-user-driven market with moderate price growth and strong premium demand in the East and South. It suits long-term holders more than quick traders. Compare net yield, appreciation and liquidity with your alternatives before buying.

For eligibility, Power of Attorney, home loan and repatriation questions, see the NRI section.

Plan your purchase with Sidus Realty

We help NRI buyers shortlist verified projects, check RERA status, coordinate a lawyer and a CA, and register by Power of Attorney. You pay no brokerage, because the developer pays our fee. Tell us your country, budget and goal and we will send a scored shortlist and call you at a time that suits your timezone.

Book a free video consultationWhatsApp usCall 82402 22529

Sources and verification

This guide is general information, not legal, tax or investment advice. Rates, rules and form numbers change, so confirm your case with a qualified lawyer and chartered accountant before you pay. Sidus Realty is an authorised channel partner, not the developer; verify RERA details on the WBRERA portal.

Have a property question?

Get a free consultation from our Kolkata experts.

By submitting you agree to be contacted by Sidus Realty. We never spam.

✆ ☎