Last updated 12 Nov 2026
An NRI with a home loan in India may be able to claim tax relief on the interest and principal repaid, but whether you can, and how much, depends on your residential status, the tax regime you choose, who owns the property and how it is used. This guide does not give limits or section numbers, because rules changed under the Income-tax Act, 2025 and differ by case. It gives you the questions to ask, the records to keep and the places to check. Confirm every point with the Income Tax Department (incometax.gov.in) or a qualified tax adviser.
Use it alongside the NRI home loan guide and, for residents, the home loan tax benefits guide.
The questions that decide your tax position
Questions to settle first
| Question | Why it matters |
|---|---|
| What is my residential status this year? | Tax in India depends on residence, and your status can change from year to year as you spend time in India or abroad |
| Which tax regime am I using? | Some deductions are available only under one regime; you may have to choose |
| Who owns the property, and who pays the EMI? | Deductions go to the person entitled under the rules; ownership and payment both matter |
| Is the property self-occupied, let out or vacant? | Treatment of interest and rent differs for each |
| Is the property complete? | Interest paid before completion is often treated differently from interest paid after |
| Is it a first home or an additional one? | Different treatment may apply |
| Do I also owe tax in the country where I live? | You may need to claim relief for tax paid in either country |
Interest, principal and what lenders provide
Interest on a home loan and repayment of principal are usually treated separately for tax. Both depend on whether you can claim them under the regime you choose. Most lenders issue a yearly certificate that splits what you paid into interest and principal. Ask your lender for it, and keep it with your repayment account statements. If you share the loan with a co-borrower, ask how the certificate splits the amounts.
Joint ownership
If you own the property with a spouse or family member who is also a borrower, tax treatment may depend on each person's share of ownership and of repayment. Both names appear on the documents, and each person's income and tax position may differ. Ask your adviser how to record shares at purchase, since changing them later can be hard. Our joint home loan guide covers the lending side.
Rent from the property
If you let the property, the rent is income in India, and the tax treatment depends on your residential status and the rules in force. A tenant paying rent to a non-resident may have to deduct tax before paying you. Ask about this before you sign a lease so that rent and tax are handled correctly. Keep rent agreements and bank records.
Paying the EMI from abroad: records to keep
- Remittance records showing money sent from abroad to your NRE or NRO account.
- Monthly account statements showing the EMI debits.
- The lender's yearly interest and principal certificate.
- The sale agreement, registered deed and stamp duty and registration receipts.
- Rent agreements and proof of tax deducted, if you let the property.
- Your passport pages showing days in India, if your residential status is in question.
Worked example: how to use the numbers
An NRI repays ₹90,000 a month on a home loan. Over a year the lender's certificate shows total payments of ₹10,80,000, split between interest and principal. The adviser asks for that split, the ownership shares, the occupancy status and the residential status. Only with those four facts can the adviser say what, if anything, can be claimed. The split alone is not enough, and a figure you read online may not apply to you.
A year-round routine
Tax is easier when records are kept as you go. Each April, ask your lender for the yearly certificate, download your account statements, and note how many days you spent in India. Before you sign a lease, ask what tax the tenant must deduct. Before you change the ownership shares or add a co-borrower, ask what that does to each person's position. Ask your adviser to review the certificate against your return before you file, because a mismatch between the lender's figures and your claim is the sort of thing that draws a query later. If you plan to sell, speak to the adviser first, since the tax on a sale depends on how long you held the property and on what you paid for it.
Things not to assume
- Do not assume a deduction you read about for resident borrowers applies to you.
- Do not assume that a lender's certificate means you can claim the full amounts shown.
- Do not file a claim on the advice of an agent who is not qualified.
- Do not mix up rules from two countries. Check both.
- Do not ignore deadlines for filing returns, even if your only Indian income is rent.
Where to check
The Income Tax Department (incometax.gov.in) publishes the current Act, forms and guidance. A chartered accountant or other qualified adviser who handles NRI cases can apply them to your facts. We have not stated any limit or section here because they changed under the new Act and may change again.
Frequently asked questions
Can an NRI claim tax relief on a home loan in India?
It may be possible, depending on residential status, the regime you choose, ownership and use of the property. Ask a qualified adviser and check the Income Tax Department's current guidance.
Does my lender give me a certificate for tax?
Most lenders issue a yearly statement of interest and principal paid. Ask your lender how to download it or request it, and keep it with your records.
Does the tax treatment change if I let the property?
Yes. Rent is income, and the treatment of interest can differ from a self-occupied home. Ask your adviser before you let the property.
Do I need to file a return in India?
It depends on your Indian income and the rules for your residential status. If you have rent or other Indian income, ask your adviser whether you must file.
Can my co-borrower claim as well?
Where a co-borrower is also an owner and pays part of the EMI, each may be able to claim for their own share under the rules. Confirm with your adviser.
Will tax benefits lower my loan cost?
They may affect your net cost, but they are not a reason to take or avoid a loan. Compare offers on the APR and your repayment ability first.
Related reading: NRI home loan, NRI home loan guide, NRI loan dos and don'ts, Home loan tax benefits, Joint home loan, Glossary: ITR, Glossary: co-applicant, Home loan eligibility calculator.
See NRI Home Loan Ask an advisor about it