All those Indians staying abroad for business/employment or other reasons which reflect a definitive purpose of their stay are termed as an NRI or Non-Resident Indian. The status of an NRI is primarily determined based on their duration of stay abroad which should equal 182 days or more at continuity.

A PIO is a Person of Indian Origin, who currently holds the status of a foreign citizen and is not a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan. The PIO should have held an Indian passport or whose parents, grandparents, or great-grandparents were born in India.

a. An OCI is an Overseas Citizen of India who is essentially a foreign national, registered as an OCI cardholder. This privilege grants them certain rights and benefits in India. An OCI is not a citizen of India but have a special immigration status that allows them to live and work in India indefinitely. i An OCI currently is a foreign national, but was a citizen of India at the time of, or at any time after, the commencement of the constitution of India. ii An OCI currently is a foreign national, but belongs to a territory that became part of India after the 15th Day of August, 1947. b. A person, who is a minor child of any person mentioned in clause (a) provided that no person, who is or had been a citizen of Pakistan, Bangladesh shall be eligible for registration as an Overseas Citizen of India.

- PAN Card (Permanent Account Number) - OCI/PIO card (In case of OCI/PIO) - Passport (In case of NRI) - Passport size photographs - Address proof

The Central Bank of India, RBI has issued the property purchase guidelines based on the category of people that can freely purchase immovable property in India: a. Non-Resident Indian (NRI) - a citizen of India residing outside India b. Person of Indian Origin (PIO) - an individual (strictly except a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan) c. Someone who or either of whose parents were citizen of India by virtue of the Constitution of India or the Indian Citizenship Act, 1955 (57 of 1955) However, the permission to own a property strictly includes the purchase of residential and commercial property and definitely not the purchase of agricultural land/plantation property/farm house in India.

The proposal to purchase such a property will require specific approval of the Reserve Bank. General permission is not available to NRI/PIO to purchase agricultural land/plantation property/farm house in India.

The income tax is not applicable on the mere acquisition of property. Income tax is applicable if any income starts to accrue from the ownership of the property, in the form of: - Rent (if it is let out)/annual value of the house (if is not let out and it is not the only residential property owned by that person in India) - Capital gains (short-term or long-term) arising on the sale of this house, or part thereof, is taxable in the hands of the owner.

General permission has been granted by the Government of India for NRI/PIO/OCI to buy property in India and they do not have to pay any taxes even while acquiring property in India. Taxes, however, are applicable on the sale of the property. NRI/PIO/OCI have to obtain a PAN if they earn rental income from their properties in India. Tax returns will have to be filed if properties are rented out. On sale of the property, the profit on sale shall be subject to capital gain taxes. -If NRI/PIO/OCI have held the property for less than or equal to 3 years from the time of actual possession, then the gains would be short-term capital gains. The income through sale is to be included in their total income as tax as per the normal slab rates shall be payable, and if the property is held for more than 3 years then the income through the sale will be considered as long-term capital gains subject to 20% tax plus applicable cess.

India has DTAA (Double Taxation Avoidance Agreement) with several countries, which give a favorable tax treatment in respect of certain heads of income. However, in case of sale of immovable property, the DTAA with most countries provide that the capital gains will be taxed in the country where the immovable property is situated. As a result, the NRI will be subject to tax in India on the capital gains, which arise on the sale of immovable property in India. The income from the sale of immovable property would be taxed in India under most tax treaties in view of the fact that the property is situated in India.

Yes, Long-term and short-term capital gains are taxable for the NRIs.

Type of asset: Assets like house property, land and building, jewellery, development rights, etc. - Rate of Tax Deduction at Source (TDS) - Long-term or Short-term Exemption available (only for long-term capital gains) The long-term capital gains arise from the sale of a residential house which can be invested in buying/constructing another residential house, within the prescribed time. The exemption is restricted to the amount of capital gains or amount invested in new residential house; whichever is lower (20.6% to 30.9%). -If the amount of capital gains is invested in bonds of National Highways Authority of India (NHAI) or Rural Electrification Corporation, then the entire capital gains is exempted. As per the financial budget 2007-08, a cap of Rs. 50 lakhs have been imposed on investment that can be made in capital tax saving bonds.

The NRIs paying any tax on capital gains which arises in India would be able to obtain a tax credit in respect of the taxes paid in India in the home country, because the income in India would also be included in the country of tax residence. The amount of tax credit forms the basis of computing the tax credit that can be claimed, which is clearly specified in the respective country’s DTAA and is also dependent on the laws of the home country where the tax payer is a tax resident.

a. If the property was acquired out of foreign exchange sources, i.e. remitted through normal banking channels/by debit to NRE (Non-Resident External) account/FCNR(B) stands for Foreign Currency Non-Resident (Bank) account, the amount to be repatriated should not exceed the amount paid for the property: i in foreign exchange received through normal banking channel, or ii by debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR(B) account. Repatriation of sale proceeds of residential property purchased by NRIs/PIOs out of foreign exchange is restricted to not more than two such properties. Capital gains, if any, may be credited to the NRO account from where the NRIs/PIOs may repatriate an account up to USD 1 million, per financial year, as discussed below. b. If the property was acquired out of Rupee sources, NRI/PIO may remit an amount up to USD 1 million, per financial year, out of the balance held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer Bank and subject to tax compliance. The NRI/PIO may use this facility to remit capital gains, where the acquisition of the subject property was made by funds sourced by remittance through normal banking channels/by debit to NRE/FCNR(B) account.

The rental income is repatriable which is considered a current account transaction, subject to the appropriate deduction of tax and the certification thereof by a practicing Chartered Accountant. Repatriation of sale proceeds is subject to certain conditions. The amount of repatriation cannot exceed the amount paid for acquisition of the immovable property in foreign exchange.

A home loan may be provided by an authorized dealer or a housing finance institution in India approved by the National Housing Bank (NHB), to a Non-Resident Indian or a Person of Indian Origin residing outside India, for acquisition of a residential accommodation in India, subject to the following conditions, namely: a. the quantum of loans, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person residing in India. b. the loan amount shall not be credited to Non-resident External (NRE)/Foreign Currency Non-resident (FCNR)/Non-resident non-repatriable (NRNR) account of the borrower. c. the loan shall be fully secured by equitable mortgage by deposit of title deal of the property proposed to be acquired, and if necessary, also be lien on the borrower’s other assets in India. d. the instalment of loan, interest and other charges, if any, shall be paid by the borrower by remittances from outside India through normal banking channels or out of funds in his Non-resident External (NRE)/Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR)/Non-resident Ordinary (NRO)/non-resident Special Rupee (NRSR) account in India, or out of rental income derived from renting out the property acquired by utilization of the loan or by any relative of the borrower in India by crediting the borrower’s loan account through the bank account of such relative (The word ‘relative’ means ‘relative’ as defined in section 6 of the Companies Act, 1956.) e. the rate of interest on the loan shall conform to the directives issued by the Reserve Bank of India or, as the case may be, the National Housing Bank.

As an NRI/PIO/OCI, you may be required to file tax returns in India if your Indian income surpasses the specified threshold or if you seek to claim refunds for excess tax deductions. While filing an ITR is mandatory only under certain circumstances, voluntary filing can be beneficial in many ways. a. you have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit. Note: The enhanced exemption limit for senior citizens and women is applicable only to residents and not to non-residents.

Yes, there are two exceptions: a. if your taxable income consisted only of investment income (interest) and/or capital gains income, b. and if your tax has been deducted at source from such income, you do not have to file your tax returns.

Traditionally, you could file your return either by giving a power of attorney to someone in India or by sending your form and documents to a tax expert in India who would then file returns on your behalf. But nowadays, the easiest option for NRIs to file their Indian tax returns is by using the online platform. There are several options to file online.

Salaried individuals - Copy of employment contract - Latest Salary slip - Latest work permit - Bank statement for 4 months or NRE/NRO A/c 6 months’ statement - Passport/visa copy - Utility bill for address proof - PIO/OCI card - Power of A orney (if applicable, in respective bank’s format) - Customer credit check report - Property agreement duly registered or other related documents - Income Tax returns of last 2 years Self-employed individuals - Balance sheets and P&L A/c of the company for last 3 years - Bank A/c statements for last 6 months for company and individual, both - Income tax returns (3 years) - Passport/visa copy - Utility bill for address proof - PIO/OCI card - Power of A orney (if applicable, in respective bank’s format) - Credit check report - Property agreement or other related documents

Please refer to the below links for updated information: i. Ministry of External Affairs: https://www.mea.gov.in ii. Indian Income tax: https://incometaxindia.gov.in iii. RBI (NRI FAQ): https://www.rbi.org.in/scripts/FAQView.aspx?Id=52