Non-Resident Indians have historically been the largest buyers of Indian real estate by ticket size. Fractional ownership extends that participation to smaller ticket sizes without the operational headache of remote landlording.
Eligibility
An NRI can invest in Indian commercial and residential real estate under FEMA's automatic route, subject to specific restrictions (agricultural land, plantation property, and farmhouses are excluded). Fractional SPV investments and SM-REIT units are permitted.
Account setup
- NRE account — for inward remittances in foreign currency; principal and interest fully repatriable.
- NRO account — for India-source income (rent, interest); repatriation up to USD 1 million / financial year.
- FCNR(B) — term deposits in foreign currency, also repatriable.
For fractional deals, subscription is usually made from an NRE or NRO account depending on the source of funds. Distributions are credited to the same account.
KYC and documents
- PAN card.
- Passport + valid visa / OCI / PIO card.
- Overseas address proof.
- NRE / NRO account details.
- FATCA declaration.
Taxation essentials
- Rental / SPV interest income is taxed at applicable slabs in India, with TDS typically at 30% + cess unless a lower DTAA rate is claimed.
- Long-term capital gains on property / fractional units taxed per current LTCG regime, again with TDS.
- Most DTAAs allow foreign tax credit against home-country tax to prevent double taxation.
- File an Indian ITR each year to reconcile TDS and claim refunds where due.
Repatriation
Principal invested from NRE funds is fully repatriable. Indian-source income credited to NRO can be repatriated up to USD 1 million per financial year (combined across heads), with a 15CA/CB certification from a Chartered Accountant. Build this flow into your planning; it is not automatic.
Common pitfalls
- Investing directly through relatives' accounts — creates tax and FEMA complications.
- Missing the 15CA/CB requirement during repatriation.
- Not claiming DTAA benefits and paying double tax.
- Ignoring residential-status rules when visiting India for longer stays.