Investing in Indian REITs and InvITs as an NRI: Rules, Taxes, and How to Fund It

This guide covers everything NRIs need to know about investing in Indian REITs and InvITs. It explains what these instruments are, whether NRIs can legally invest in them, how distributions are taxed under Indian and DTAA rules, which accounts to use, and how to repatriate returns. It also covers how to fund your investment efficiently from abroad without losing money on the transfer. If you’ve been curious about Indian REITs and InvITs for NRIs but weren’t sure where to start, this is the most practical breakdown available.

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Indian real estate has always been a pull for NRIs. But buying property abroad is complicated: property management, stamp duty, rental disputes, and illiquidity. REITs and InvITs change that equation completely.

You get exposure to India’s commercial real estate and infrastructure sectors, professional management, SEBI regulation, and stock-exchange liquidity — without owning a single brick. And yes, NRIs can invest in them.

Here’s the complete picture.

What Indian REITs and InvITs for NRI Investors Actually Look Like

Before getting into rules, it helps to understand what you’re actually buying.

A Real Estate Investment Trust (REIT) pools capital to own and operate income-generating real estate. Think grade-A office parks, retail malls, and commercial properties. India currently has four listed REITs: Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India Real Estate Trust, and Nexus Select Trust, which focuses on retail malls.

An Infrastructure Investment Trust (InvIT) does the same thing for infrastructure assets — roads, power transmission lines, gas pipelines, fiber networks. Listed InvITs include IndInfravit Trust, PowerGrid InvIT, and IRB InvIT Fund, among others.

Both are listed on the BSE and NSE and are regulated by SEBI. Both distribute a large portion of their cash flows to unitholders, similar to dividends but structured differently from a tax standpoint.

For NRIs, the combination of yield, liquidity, and professional management makes Indian REITs InvITs an increasingly attractive asset class within an India-linked portfolio.

Can NRIs Legally Invest in Indian REITs and InvITs?

Yes. SEBI permits NRIs to invest in Indian REITs and InvITs under the Portfolio Investment Scheme (PIS) route managed by RBI. There are no restrictions specific to the instrument. If the REIT or InvIT is listed on a recognised stock exchange, NRIs can buy and sell units just like any other listed security.

How NRIs Access Indian REITs InvITs Through the Right Account

You’ll need a few things in place before you can buy your first unit:

• A PIS-enabled NRE or NRO account at an authorised Indian bank
• A Demat and trading account linked to that bank account (most brokerages, including Zerodha, HDFC Securities, and ICICI Direct, support NRI accounts)
• A mandate specifying whether you’re investing on a repatriable basis (NRE) or a non-repatriable basis (NRO)

Units held through an NRE account are repatriable. Sale proceeds and distributions can flow back out of India. Units held through an NRO account are non-repatriable by default, though you can repatriate up to US$1 million per financial year from your NRO account after paying applicable taxes.

The distinction matters. If you anticipate needing the money back in your country of residence, use the NRE route from the start. Switching later is possible, but adds friction.

If you’re still working through the NRE vs NRO decision, read our guide on NRE vs NRO accounts: which one NRIs should use for investments before proceeding.

How Distributions from Indian REITs InvITs Are Taxed for NRI Investors

This is the part most NRIs don’t fully understand until their first distribution lands in the account.

REIT and InvIT distributions aren’t simple dividends. They carry three components, each taxed differently.

The Three-Component Tax Structure for Indian REITs, InvITs for NRI

Dividend Income — The portion classified as dividend is taxable in India at 30% for NRIs, plus applicable surcharge and cess. As of FY 2024-25, the effective rate can be higher depending on surcharge slabs. This is withheld at source by the trust before the distribution reaches you.

Interest Income — The portion classified as interest income is also taxed at 30% for NRIs, plus surcharge and cess. Again, withheld at source.

Capital Repayment / Return of Capital — This portion is not taxable when received. It reduces your cost of acquisition, which affects capital gains calculations when you eventually sell.

When you sell REIT or InvIT units, capital gains apply. Short-term capital gains (held under 36 months) are taxed at 15%. Long-term capital gains (held 36 months or more) above Rs 1 lakh per year are taxed at 10% without indexation.

Using DTAA to Reduce Your Tax Burden on Indian REITs InvITs

India has Double Taxation Avoidance Agreements (DTAs) with over 90 countries. If you’re a tax resident in the US, UK, UAE, Germany, or most other major NRI destinations, you may be able to claim relief under DTAA on dividend and interest components.

To access DTAA benefits, you need to submit a Tax Residency Certificate (TRC) from your country of residence to your broker or the trust before distributions. Without this, TDS is deducted at higher default rates.

The actual benefit varies by treaty and income slab. A CA with cross-border tax experience is the right person to calculate your net liability before you invest significant amounts. For a full breakdown of how treaty benefits apply to NRI investment income, read our post on how DTAA works for NRIs earning income in India.

How to Fund Your Indian REIT InvIT Investment From Abroad

You’ve got the brokerage account set up. Now you need to actually get money into India to buy units.

Most NRIs lose meaningful money here without realising it. Banks and legacy remittance providers typically apply a markup of 2 to 3% on the exchange rate. On a US$20,000 investment, that’s US$400 to US$600 gone before you’ve bought a single unit.

ZoltMoney is built specifically to solve this. It offers real interbank exchange rates with transparent, low fees, so the money that lands in your NRE account is as close as possible to what you sent. Transfers go directly into your Indian bank account, ready to deploy into your brokerage.

The process is straightforward:

1. Send funds from your overseas bank to ZoltMoney
2. ZoltMoney converts at the real rate and transfers to your NRE account
3. Move funds from NRE to your linked Demat trading account
4. Buy REIT or InvIT units on BSE or NSE through your broker

If you plan to make regular investments, scheduling recurring transfers through ZoltMoney makes the funding side systematic and cost-efficient. For a full walkthrough on moving funds into India for investment purposes, read our guide on how NRIs can fund Indian investment accounts from abroad.

What the Risk Profile Looks Like for Indian REITs InvITs for NRI Investors

Indian REITs and InvITs for NRI investors are a genuine wealth-building tool, but they carry real risks worth understanding before committing capital.

Leverage matters. REITs and InvITs can hold significant debt. Rising interest rates in India can compress distributions and unit prices simultaneously.

Occupancy risk for REITs. Office REITs depend on demand for commercial space. The post-pandemic shift affected global office markets. Indian commercial real estate has held up better, but it’s not immune.

Project concentration for InvITs. Some InvITs hold a small number of assets. If one project underperforms, the impact on distributions is outsized.

Currency risk. Your returns are in INR. When you repatriate, you’re converting back to your home currency at whatever rate prevails then. ZoltMoney locks you in at the real rate with no markup, so you don’t lose extra on the conversion when you bring money home.

Minimum investment. Unlike mutual funds, REIT and InvIT units trade at whatever market price they’re listed at. Prices typically range from Rs 100 to Rs 400 per unit, depending on the trust. Check current prices on BSE or NSE before calculating how much to remit.

Repatriation of REIT InvIT Returns for NRI Investors

Repatriation rules depend entirely on which account you invested through.

If you invested through the NRE route, repatriation is generally straightforward. Sale proceeds and distributions credited to your NRE account are freely repatriable with no annual cap and no RBI approval required.

If you invested through NRO, repatriation is capped at US$1 million per financial year. You’ll need Form 15CA and Form 15CB (a chartered accountant certificate) to transfer funds out, along with proof that taxes have been paid.

Keep records of every transaction: purchase date, number of units, cost price, distribution receipts, and TDS certificates. You’ll need this both for Indian tax returns (if your Indian income crosses Rs 2.5 lakh) and for filing in your country of residence.

The TDS deducted in India on distributions may be claimable as a foreign tax credit in your home country, depending on your local rules. Your CA can confirm this. For more on the full repatriation process, see our complete guide on how NRIs can repatriate funds from India legally.

FAQ

Can NRIs invest in Indian REITs and InvITs directly?

Yes, NRIs can invest in Indian REITs and InvITs directly through a PIS-enabled NRE or NRO account linked to a SEBI-registered broker. Units are listed on BSE and NSE and trade like shares. You don’t need special permissions from RBI beyond the standard PIS mandate already required for NRI equity investments. The process mirrors buying Indian stocks as an NRI.

How are REIT distributions taxed for NRI investors in India?

REIT and InvIT distributions for NRI investors carry three components: dividend (taxed at 30% plus cess), interest (taxed at 30% plus cess), and capital repayment (tax-free on receipt, reduces cost basis). TDS is deducted before the distribution reaches your account. NRIs from DTAA-treaty countries can reduce their tax rate on specific components by submitting a Tax Residency Certificate to their broker.

Which account should NRIs use to invest in Indian REITs: NRE or NRO?

Use an NRE account if you want your sale proceeds and distributions to be freely repatriable back to your overseas bank. Use NRO if you’re investing from Indian income you already hold in India. The NRE route is more flexible for most NRIs investing fresh funds from abroad, since there’s no annual cap on repatriation from NRE accounts, unlike the US$1 million limit that applies to NRO transfers.

What is the minimum investment amount for Indian REITs and InvITs for NRI investors?

There is no minimum investment amount set by SEBI specifically for NRIs. You buy units at the prevailing market price in the lot size set by the exchange. For most listed REITs and InvITs, the lot size is one unit. Prices typically range from Rs 100 to Rs 400 per unit, depending on the trust. Check current prices on BSE or NSE before calculating how much to remit from abroad.

Can NRIs repatriate REIT income and sale proceeds back abroad?

Yes. If investments are held through an NRE account, both distributions and sale proceeds are freely repatriable with no annual cap. If held through NRO, repatriation is permitted up to US$1 million per financial year after paying applicable taxes and filing Form 15CA and Form 15CB. Keeping proper records of TDS deducted on distributions helps avoid double taxation when filing in your home country.

DISCLAIMER

This article is for general informational purposes only and does not constitute financial, legal, or tax advice. Tax rules, SEBI regulations, and RBI guidelines are subject to change. NRI investors should consult a qualified Chartered Accountant or financial advisor familiar with cross-border tax treaties before making investment decisions. Exchange rates and distribution yields mentioned are indicative only.