🏡 NRI Property Buying Guide – Hyderabad, India

1. Eligibility for Property Purchase

✔ NRIs and OCI (Overseas Citizens of India) cardholders are allowed to buy residential and commercial property in India.
❌ They cannot buy agricultural land, farmhouses, or plantation property.

👉 In Hyderabad, NRIs can purchase:

• Apartments (ready-to-move / under-construction)
  
  

• Independent houses/villas
  
  

• Plots in approved layouts (HMDA, DTCP, etc.)
  
  

2. Modes of Purchase

• Direct Purchase – NRI can purchase in their own name.
  
  

• Joint Ownership – Can co-own with another NRI/OCI/Indian resident (but property type restrictions apply).
  
  

• Through Power of Attorney (PoA) – Useful when the NRI is not in India. They can authorize a relative/lawyer to complete the transaction.
  
  

3. Payment Rules

• Payments must be made in Indian Rupees (INR).
  
  

• Sources:
  
  

  • NRE Account (Non-Resident External)
    
    

  • NRO Account (Non-Resident Ordinary)
    
    

  • FCNR Account (Foreign Currency Non-Resident)
    
    

• No cash payments are allowed.
  
  

4. Home Loans for NRIs

NRIs can avail loans from Indian banks (SBI, HDFC, ICICI, Axis, etc.).

Key Points:

• Loan tenure usually up to 15–20 years (shorter than residents).
  
  

• EMIs must be paid from NRE/NRO accounts.
  
  

• Documents required: Passport, Visa, Work Permit, Overseas Address Proof, Salary Slips/Bank Statements.
  
  

5. Important Documents Required

1. Passport (with valid Visa/OCI card)
   
   

2. PAN Card (mandatory for transactions)
   
   

3. Indian Address Proof (if available)
   
   

4. Overseas Address Proof
   
   

5. Recent passport-size photographs
   
   

6. Power of Attorney (if executed)
   
   

6. Registration Process in Hyderabad

• Sale deed executed and registered with Sub-Registrar Office (SRO), Telangana.
  
  

• Payments for stamp duty, registration charges, and mutation charges made via TGIGRS portal.
  
  

• Mutation in GHMC/HMDA records ensures ownership transfer.
  
  

Charges in Hyderabad:

• Stamp Duty: 4% of property value
  
  

• Registration Fee: 0.5%
  
  

• Transfer/Mortgage Duty: 1.5% (if applicable)
  
  

• Mutation Fee: 1%
  
  

7. Repatriation of Funds (If property is later sold)

• Sale proceeds of up to 2 residential properties can be repatriated.
  
  

• Amount repatriated cannot exceed the original foreign currency remitted.
  
  

• If bought using NRO funds, proceeds are subject to USD 1 million per year limit.
  
  

8. Taxation for NRIs

• TDS on Sale: 20% (for LTCG if property held >2 years), 30% (for STCG if <2 years).
  
  

• Rental Income: Taxable in India; TDS of 30% is deducted by tenant.
  
  

• NRIs must file ITR in India if income arises from property.
  
  

• Double Tax Avoidance Agreement (DTAA) can reduce tax liability depending on NRI’s country of residence.
  
  

9. Checklist Before Buying in Hyderabad

✅ Verify project RERA approval (TS RERA website).
✅ Ensure land is clear of litigation/encumbrances (EC – Encumbrance Certificate).
✅ Check HMDA/GHMC approvals for layout/building.
✅ Verify occupancy certificate (OC) or completion certificate (CC) for ready projects.
✅ Confirm builder’s reputation and financial stability.
✅ If buying resale property – verify mutation, tax receipts, electricity/water bills.

10. Tips for NRIs Buying in Hyderabad

• Prefer RERA-registered projects for legal safety.
  
  

• Appoint a local legal advisor/real estate consultant for due diligence.
  
  

• Use PoA if not visiting India for registration.
  
  

• Choose projects in high-demand areas: Kokapet, Financial District, Gachibowli, Narsingi, Kondapur, Tellapur, Kollur.
  
  

• If buying for investment, check for rental yield (3–5% in West Hyderabad) and appreciation potential.
  
  

11. Advantages of Hyderabad for NRI Investors

• IT/Financial District hub → strong rental demand.
  
  

• Good infrastructure: ORR, upcoming Metro expansions, Regional Ring Road.
  
  

• Telangana Govt.’s investor-friendly policies.
  
  

• High demand from NRIs working in US, Middle East, UK for premium housing.
  
  

🔑 Quick Tips

• Use NRE → To park foreign income in India with tax-free returns and easy repatriation.
  
  

• Use NRO → To manage income earned in India (rent, FD interest, pensions).
  
  

• Use FCNR → For fixed deposits in foreign currency, ideal to avoid INR depreciation risk.

TDS (Tax Deduction at Source) for NRI's

🏦 TDS for NRIs – Key Points

1. When TDS Applies for NRIs

• On sale of property in India
  
  

• On rental income from property
  
  

• On interest income from bank deposits, FDs, NRO accounts
  
  

• On capital gains from investments (shares, mutual funds, property, etc.)
  
  

2. TDS on Sale of Property (NRI Seller)

• If property is sold by an NRI, the buyer must deduct TDS.
  
  

• Short-Term Capital Gains (STCG): If property held ≤ 2 years → TDS @ 30% (as per income tax slab).
  
  

• Long-Term Capital Gains (LTCG): If property held > 2 years → TDS @ 20% + surcharge + cess (with indexation benefit).
  
  

• Buyer must deposit this TDS with the Income Tax Department and issue a Form 16A certificate to the NRI.
  
  

3. TDS on Rental Income (NRI Owner)

• Tenant must deduct TDS @ 30% of rent (plus surcharge & cess, if applicable).
  
  

• TDS must be deposited monthly/quarterly and NRI gets credit via Form 16A.
  
  

4. TDS on Bank Deposits

• Interest earned on NRO accounts – TDS @ 30%.
  
  

• Interest on NRE & FCNR accounts – Tax-Free (no TDS).
  
  

5. DTAA (Double Tax Avoidance Agreement)

• If NRI resides in a country with a DTAA with India, they can benefit from lower TDS rates.
  
  

• Example: For USA/UK residents, TDS on certain incomes (like dividends, interest) may reduce to 10–15% instead of 30%.
  
  

6. Lower TDS Certificate

• NRIs can apply to the Income Tax Officer (ITO) under Section 197 for a Lower/Nil TDS Certificate if actual tax liability is less than standard TDS.
  
  

• This avoids excess TDS deduction and refund delays.
  
  

7. Important Compliance

• NRIs must file Income Tax Return (ITR) in India if income exceeds ₹2.5 lakhs or if they wish to claim refund of excess TDS.
  
  

• PAN Card is mandatory for all property transactions and TDS compliance.
  
  

✅ Quick Summary:

• Sale of property → TDS 20% (LTCG) / 30% (STCG).
  
  

• Rent → TDS 30%.
  
  

• Bank interest → TDS 30% on NRO; none on NRE/FCNR.
  
  

• DTAA can reduce TDS burden.
  
  

• Lower TDS Certificate is recommended for high-value transactions.
  
  

HEDGING 

💹 Hedging – A Simple Explanation

1. What is Hedging?

Hedging is like an insurance policy against financial risks.

• It means taking steps to reduce or eliminate the impact of price fluctuations, especially in currency exchange rates, interest rates, or asset prices.
  
  

• For NRIs investing in India, the biggest risk is currency depreciation (e.g., INR value falling against USD, GBP, etc.), which affects returns when money is repatriated.
  
  

2. Why NRIs Need Hedging?

• If an NRI buys property in India using USD savings, all payments are in INR.
  
  

• Later, when selling and repatriating back to USD, if INR weakens → actual returns in USD may fall, even if property price rose in India.
  
  

• Example:
  
  

  • Buy at ₹75/USD → Sell after 5 years at ₹90/USD.
    
    

  • Even if property price increases, the conversion loss reduces actual returns.
    
    

👉 Hedging helps lock-in exchange rates to protect against such losses.

3. Types of Hedging Instruments (used by NRIs & Investors)

🔹 Forward Contracts

• Agreement with a bank/forex dealer to buy/sell currency at a fixed rate in future.
  
  

• Example: NRI locks today’s USD-INR rate for repatriation after 2 years.
  
  

🔹 Currency Futures

• Exchange-traded contracts to hedge against currency movements.
  
  

• Useful for traders/companies, but less for individual NRIs.
  
  

🔹 Currency Options

• Gives right (not obligation) to exchange currency at a fixed rate.
  
  

• Safer, but comes with a premium cost.
  
  

🔹 Natural Hedge

• Matching income & expenses in the same currency.
  
  

• Example: An NRI earning in USD but also having expenses/investments in USD (like an FCNR deposit).
  
  

4. Hedging in Real Estate Context (For NRIs)

• Use FCNR Deposits: Keep funds in foreign currency, protected from INR depreciation.
  
  

• Structured Loans: Some banks allow foreign currency-linked loans with built-in hedges.
  
  

• Forward Cover: Book a forward contract with banks when planning to repatriate property sale proceeds.
  
  

• Diversification: Invest part of funds in foreign currency deposits and part in INR assets to balance risk.
  
  

5. Advantages of Hedging

✔ Protects from currency volatility.
✔ Gives certainty in cash flows and returns.
✔ Reduces risk when repatriating funds.
✔ Helpful for NRIs in long-term property investments.

6. Limitations of Hedging

❌ Comes with a cost (premium/fees).
❌ May limit upside gains if exchange rate moves in your favor.
❌ Not always available for very long tenures.

✅ Summary:
For NRIs, hedging is a risk management tool to safeguard real estate investments in India from currency fluctuations. Using instruments like forward contracts, FCNR deposits, and currency options, NRIs can ensure that their property gains in India are not wiped out by a weaker rupee during repatriation.