NRI property and tax glossary

Every term an NRI landlord or seller runs into, defined in one line before the detail. If you have hit a form number or an acronym on this site and want the plain meaning, it is here.

RNOR (Resident but Not Ordinarily Resident)

A transitional tax status between non-resident and full resident. An RNOR does not pay Indian tax on most foreign income. You usually qualify for up to three years after returning to India, if you were a non-resident in nine of the ten preceding years, or in India for 729 days or less in the seven preceding years.

NRI (Non-Resident Indian)

An Indian citizen who does not meet the day-count tests for tax residence in India for a given financial year. The core test is fewer than 182 days in India that year, subject to the 60-day and 120-day limbs. Status is decided year by year, not once.

OCI (Overseas Citizen of India)

A lifelong visa and status for people of Indian origin who hold a foreign passport. For buying and holding property, an OCI is treated like an NRI: residential and commercial property yes, agricultural land, farmhouse, and plantation no.

NRO account (Non-Resident Ordinary)

A rupee account for income that arises in India: rent, dividends, pension, sale proceeds. Balances are repatriable up to USD 1 million per financial year after tax and the right forms. Rent from an India property should be credited here.

NRE account (Non-Resident External)

A rupee account funded from foreign earnings. The balance and interest are freely repatriable and the interest is tax-free in India. You cannot credit India-source rent to an NRE account.

FEMA (Foreign Exchange Management Act)

The law, administered by the RBI, that governs what an NRI can buy, hold, and repatriate. FEMA is the reason an NRI can own a flat but not buy farmland, and the reason repatriation runs through defined limits and forms.

TDS under Section 195

Tax deducted at source on payments to a non-resident. When an NRI sells property, the buyer withholds TDS under Section 195 on the full sale value, not the gain. When a tenant pays rent to an NRI, the tenant deducts TDS under Section 195 on the rent.

Lower Deduction Certificate (Section 197, Form 13)

A certificate from the tax department that directs the buyer or tenant to deduct TDS on your actual income rather than the gross amount. You apply on TRACES before the transaction. It is the single biggest lever an NRI seller has against a locked-up refund.

Form 15CA and 15CB

The pair filed before money moves abroad from an NRO account. Form 15CB is a chartered accountant's certificate that the correct tax was paid. Form 15CA is your declaration to the bank. Under the Income-tax Act 2025 the forms are being renumbered from 1 April 2026, reported as Form 145 and Form 146.

LRS (Liberalised Remittance Scheme)

The RBI scheme that lets a resident individual remit up to USD 250,000 per financial year abroad. It applies to residents, not to NRO repatriation, which runs on the separate USD 1 million per year route. The two are often confused.

DTAA (Double Taxation Avoidance Agreement)

A treaty between India and another country that stops the same income being taxed twice. For property, a DTAA can lower the TDS rate or give you credit at home for tax paid in India. Claiming it usually needs a Tax Residency Certificate and Form 10F.

TRC (Tax Residency Certificate)

Proof from your country of residence that you are a tax resident there. It is the document that unlocks DTAA benefits on your India income. Without it, the treaty rate does not apply.

Form 10F

A declaration you file on the income-tax portal alongside your TRC to claim treaty benefits. It carries the details the TRC does not, such as your tax identification number abroad.

LTCG and STCG (Long-Term and Short-Term Capital Gains)

Property held for more than 24 months is long-term; 24 months or less is short-term. Long-term gains on property are taxed at 12.5% without indexation from 23 July 2024. Short-term gains are taxed at your slab rate.

Section 54, 54EC, 54F

The main exemptions that reduce capital-gains tax on a property sale. Section 54 reinvests the gain in another house. Section 54EC parks the gain in specified bonds. Section 54F reinvests the whole sale value in a house. NRIs can use all three, subject to conditions.

TAN (Tax Deduction Account Number)

The number a deductor needs to deposit TDS and file TDS returns. A buyer purchasing from an NRI has historically needed a TAN, unlike a buyer purchasing from a resident. From 1 October 2026 this is reported to ease for resident individual and HUF buyers, who can deduct on a PAN-based challan.

POA (Power of Attorney)

The instrument that lets someone act for you in India when you are abroad. For a property sale it must be attested at the Indian consulate and adjudicated and registered in India. A general POA does not by itself transfer title.

FMV on 1 April 2001

The fair market value substitution allowed for property acquired before 1 April 2001. For old or inherited property, you may use the 2001 value as the cost base instead of the original price, which usually cuts the taxable gain.

FAQ

What is the difference between an NRO and an NRE account?

An NRO account holds India-source income like rent and sale proceeds and is repatriable up to USD 1 million per financial year after tax. An NRE account holds foreign earnings, is freely repatriable, and earns tax-free interest. India rent must go to an NRO account.

What does RNOR status get me?

RNOR is a transition status after you return to India. It exempts most of your foreign income from Indian tax for up to three years, giving you time to reorganise overseas accounts and assets before full resident taxation applies.

What is TDS under Section 195?

Section 195 is the rule that makes the payer withhold tax when paying a non-resident. On a property sale the buyer withholds on the full price. On rent the tenant withholds on the rent. A lower-deduction certificate reduces what is withheld.

Do NRIs get DTAA benefits automatically?

No. You must hold a Tax Residency Certificate from your country of residence and file Form 10F. Only then does the treaty rate or the foreign tax credit apply to your India income.