rpaketi, assuming that you are an US citizen/resident ( green card ) or resident for tax purposes, the treatment of foreign property is the same whether situated in the USA or India. There are differences , yes. Also asuming that this property is a second home ( your current main residence being in the USA, your tax home ) , allows you to claim mortgage interest paid ( again assuming that you are yourself liable for the payment, you made the payment, you are on the deed and the loan is secured by the property ) as a deduction if you itemize. The property is not depreciable because it is not an income property. If , on the otherhand, you are actually renting the property out to your parents, you have to show that this is at arms length lease, the rent charged being at least FMV, then you would have to fle a schedule E , declaring the rental income and against which you can deduct the mortgage interest, property taxes and depreciation -- foreign properties are depreciated same as commercial property in the USA -- 40 years rather than 27.5 years.
So please tell us about facts and circumsatnces of your case , so we can focus on your situation only
