Whalesbook
### Global Real Estate Beckons Indian Investors
A notable trend is emerging among Indian citizens, who are increasingly directing investment capital towards overseas real estate. This expansion beyond domestic markets is driven by a confluence of factors, including the pursuit of portfolio diversification and the pragmatic need to support family members undertaking educational pursuits abroad. Such cross-border property acquisitions are meticulously regulated, with resident individuals navigating the framework laid out by the Reserve Bank of India's (RBI) Liberalised Remittance Scheme (LRS).
Navigating LRS and Budget 2026 Easing
The LRS allows each resident individual to remit up to $250,000 per financial year for a range of permissible current and capital account transactions, including investments and property purchases. Families often consolidate these individual limits to finance a single acquisition, with payments permissible in instalments provided each remittance adheres to the annual cap and is routed through authorized banking channels.
The Union Budget 2026-27 has introduced measures designed to streamline compliance and enhance the attractiveness of such investments. Notably, the Tax Collected at Source (TCS) on remittances for overseas tour packages, education, and medical purposes has been reduced to 2%, down from previous rates of 5% and 20% for certain thresholds. This reduction is intended to ease short-term financial pressures on households and improve cash flow. Furthermore, a significant procedural change will ease the sale of immovable property by non-residents, eliminating the requirement for buyers to obtain a Tax Deduction and Collection Account Number (TAN) from October 1, 2026, allowing transactions to proceed using the buyer's Permanent Account Number (PAN).
Tax Vigilance and Double Taxation Relief
While expanding investment horizons, Indian tax laws mandate comprehensive disclosure of all foreign assets in tax returns. Non-disclosure can attract severe penalties and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. All rental income and capital gains from overseas properties are taxable in India for resident individuals. However, to mitigate the risk of double taxation, India has entered into numerous Double Taxation Avoidance Agreements (DTAAs) with countries worldwide. These treaties allow residents to claim Foreign Tax Credit (FTC) for taxes paid abroad against their Indian tax liability, effectively ensuring income is taxed only once, typically at the higher of the two applicable rates. Proper documentation, including proof of taxes paid internationally, is critical to avail these benefits.
Global Real Estate Outlook and Indian Investment
The global real estate market is projected for a recovery in 2026, with increased investment activity anticipated. Knight Frank forecasts global institutional investment in commercial real estate to reach $144 billion, driven by improving occupier demand and easing interest rates. India is emerging as a strategic destination within Asia-Pacific portfolios, attracting international capital for its long-term growth prospects, particularly in office, living, and industrial/logistics sectors. While specific property market forecasts vary by region globally, with some areas expecting stable price growth and others slight moderation, the underlying trend suggests a global real estate sector ripe for investment. Indian investors, leveraging their growing wealth and the regulatory framework, are well-positioned to participate in this revitalized global market.