How can NRIs make the most of their rental earnings in India?

Read this article to know how you should handle the rental income from your property as an NRO. Know if you should transfer it to your current country or you should keep in India and if in India, where to keep it so that it keeps growing.

If you are reading this, you might already be earning a rental income in India, or planning to put your property in India on rent. It is often beneficial for non-resident Indian to put their Indian property on rent, once they have settled abroad. It helps them keep their property maintained and also earn rental income. However, you must make the best use of this rental earning. Let's see how.

What to do of your rental income?

Once you receive rental income in India you can do either of the following -
  • Transfer
  • Reinvestment

Transfer and Repatriation

You can get your rental earnings transferred to your foreign bank account or your Non-resident ordinary (NRO) account. However, you would have to conform to the applicable laws of India ( including taxation).

As an NRI landlord, you can ask your tenant to directly deposit the rental income to your foreign bank account of the country you are currently residing.

Alternatively, you can also ask your tenant to transfer the rent amount to your Non-resident ordinary( NRO) account.

However, there are some restrictions and proceedings for this transfer. In any financial year, you can not repatriate more than one million dollars of your NRO account balance.

Also, before the repatriation of money, you need to submit two important documents, Form 15CA and form 15CB to the authorised bank for the money remittance. The remittance is allowed once the signed copies of these two documents are submitted to the authorised bank.


Alternatively, you can also reinvest your rental income in some lucrative investment instrument to earn returns. There are many investment options that you can choose as per your financial goals.

While a bank fixed deposit might be your first choice, it would hardly give you a return of 2% to 7.5%. On the other hand, mutual funds investments have the potential of giving you high returns. Mutual funds are investment funds that are managed by professionals called fund managers. These fund managers pool money from various investors and invest in a basket of different shares and bonds. You can invest in mutual funds online with a small amount as low as Rs. 100. Equity, debt and hybrid are some of the types of mutual funds that you can choose from. You can invest in mutual funds easily with the help of various mutual fund investment guides available online.

Moreover, you can invest in a disciplined manner by automating your mutual funds. Also, mutual funds investments are flexible. You can top up your SIP amount when there is an increase in the rentals or 'pause' the SIP when there is no rental income. With mutual fund investments, you can earn high returns and also diversify your portfolio.

With good financial planning, you can earn additional returns on your rental income. Identify the fair estimate of the amount you can invest depending on the difference between the rent earned and expenses incurred. Further, determine your risk tolerance and choose a scheme that conforms to your financial comfort to earn good returns. Happy investing!


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