NRI Tax for the Telugu Diaspora: Rent, Property Sales and Returns in Telangana

Many Telugu families in the US, UK, Gulf and Australia own flats in Hyderabad, plots on the city's outskirts, or family land in their home districts. Managing the tax side from abroad raises recurring questions. This guide covers the common ones.

Rent From Hyderabad Property

Tenants paying rent to an NRI landlord must deduct TDS at the non-resident rate, which needs a TAN. Many tenants don't know this. If they don't deduct, the landlord still owes tax, and the tenant can face consequences. Rent should be credited to an NRO account. The landlord files a return, claims the 30% standard deduction and property tax paid to GHMC or the local body, and often gets a refund of excess TDS.

Selling a Flat or Plot

The buyer must deduct TDS at capital gains rates on the full sale price, unless the NRI seller has a lower deduction certificate from the tax department. Applying for the certificate before the sale, based on the actual expected gain, avoids large amounts being locked up until a refund.

Capital Gains

Property held over 24 months is long-term, taxed at 12.5% without indexation since July 2024. The option to use 20% with indexation for property bought before then is available only to resident individuals and HUFs, not NRIs. Reinvestment exemptions are available to NRIs too.

Family and Agricultural Land

Rural agricultural land in India is not a capital asset for tax purposes, so its sale isn't subject to capital gains tax. Land within specified distances of municipal limits is a capital asset. Much land around Hyderabad falls within these limits, so check carefully.

Managing From Abroad

• Use a power of attorney, attested at the Indian embassy or apostilled, for registration.
• Keep an NRO account for rent and sale proceeds.
• Keep PAN and Aadhaar details updated.
• Track notices on the e-filing portal.

Getting Help

Think Filing handles tax for NRIs with property in Telangana, from rent to sales and repatriation.