An NRI who wants to get involved with commercial real estate has had two choices in the past. Buy a property directly which brings problems like managing tenants dealing with TDS rules needing a power of attorney and not being able to sell.. Avoid it completely and just keep financial assets instead.
REITs changed the situation. A Real Estate Investment Trust is a group that takes money from investors to buy estate that makes money, mostly office areas and other commercial buildings. Then the REIT gives the rent money back to the people who own the units. These units are available on the stock market so they can be. Sold like shares.
For an NRI having real estate exposure and also being able to trade like a stock is the reason to look at REITs.
eligibility and account requirements
NRIs can invest in REITs if they meet some simple rules.
A valid PAN card and KYC papers are required. An NRE or NRO bank account is needed, along with a demat and trading account connected to a SEBI-registered broker.
The type of account matters than for most investments. An investment funded from an NRE account is allowed to send money to the country. The money and the returns can be sent without limits. An investment from an NRO account is limited to $1 million per year for sending money and sending the money out needs tax clearance and some documents like Form 15CA and 15CB.
For an NRI who wants to send money regularly from the REIT using an NRE account from the start avoids the hassle later.
the two investment routes
An NRI can invest in a REIT either during the public offering or by buying units on the stock market after they are listed. The minimum amount needed to invest in REITs was lowered from 200,000 rupees to 50,000 rupees in 2021 making it easier for regular investors to get involved.
Another option is through GIFT City depository receipts. SEBI allowed a system in 2026 that lets REITs and InvITs make these receipts at GIFT Citys International Financial Services Centre. NRIs can invest in these receipts which’re in foreign currency. This means there is no risk from changing money and there is no need for a demat account.
what the returns look like
Indian REIT returns come in two parts: the distribution. The capital gains.
The distribution yield is from the rent from the buildings the REIT owns. In 2026 the yield for the four REITs was between 6% and 6.8%.
Capital gains come from the price of the units going up. In the twelve months up to June 2026 the total returns were strong. Mindspace Business Parks REIT had 24.3%, Nexus Select Trust 23.2% Embassy Office Parks REIT 19% and Brookfield India REIT 11.9%. In the time the Nifty 50 went down 5.2%.
the tax treatment for NRIs
REITs have taxes that are layered because the money comes from places and each is taxed differently.
Dividend income. In 2026 a new law made dividend income from REITs not taxable for investors, including NRIs. This removed the need to worry about the tax system the company had picked. However the way the tax is taken out at the source is not updated. If the company had chosen a tax system the REIT might still take out 10% tax. An NRI in that case may need to file an income tax return to get the money back.
Interest income. Interest from the REIT is taxed at 5%. A surcharge and a cess.
Rental income. When the REIT gives out rent directly it is taxed at the NRIs tax rate.
Capital gains. When the units are sold the tax depends on how the NRI held them. If they held the units for than 24 months it is long-term and taxed at 12.5% without adjusting for inflation on money above 125,000 rupees. If they held the units for 24 months or less it is term and taxed at 20%. This part can. The latest rules on income tax returns should be checked.
what retail investors should take from this
The main benefit is having real estate exposure with the ability to trade like a stock. Compared to owning property REIT units are on the stock exchange. To get out you sell them in a demat account without having to deal with tenant TDS, power of attorney or transferring the title.
The type of account you use decides how easy it is to send money. An NRE account allows you to move money freely. An NRO account has a limit of $1 million per year. Needs tax clearance. For an NRI who wants to send money from the REIT using an NRE account from the start is the better choice.
Dividends are not taxed,. You may still need to file a return. Even though dividends are not taxed the way the tax is taken out at the source may still take some tax. For an NRI who has no income in India filing a return just to get the money back is a step that should not be missed.
FAQs
1. Can NRIs invest in REITs?
Yes. NRIs can buy units during the initial offering or on the stock market using either an NRE or NRO account along with a demat and trading account.
2. What is the minimum investment for an NRI in REITs?
The minimum investment for REITs was lowered to 50,000 rupees in 2021.
3. Is dividend income from REITs taxable for NRIs?
Dividend income is not taxed for investors, including NRIs under the 2026 law.. If the company had chosen a special tax system the REIT might still take out 10% tax and the NRI might need to file a return to get the money back.
4. What is the capital gains tax on REIT units sold by an NRI?
If the units are held for than 24 months the tax is 12.5% on gains above 125,000 rupees. If held for 24 months or less the tax is 20%.
5. How does an NRI repatriate income from REITs?
Using an NRE account the money and the returns can be sent back without limits. Using an NRO account the limit is $1 million, per year and tax clearance and certain forms are needed.
