Can an NRI Buy Property in India? 2025 Rules, Taxes, Home Loans & Repatriation

Sep, 9 2025

TL;DR

• Yes-NRIs/OCIs can buy residential and commercial property in India under FEMA 21(R)/2018. No RBI approval is needed for most cases.
• You cannot buy agricultural land, plantation property, or farmhouses. You may inherit them, but you can’t purchase them.
• Pay only via banking channels: NRE/NRO/FCNR accounts or inward remittance. Home loans are allowed; EMIs must come from NRE/NRO/FCNR or rent.
• Expect TDS compliance when you buy-1% u/s 194-IA (from a resident seller) or u/s 195 (from an NRI seller). Stamp duty/registration is extra.
• Repatriation: Sale proceeds up to USD 1 million per FY from NRO after taxes; if bought with NRE/FCNR funds, principal is repatriable (limits apply).

Clicked this because you want a clean, current answer and a clear path to action. You’ll get both. I’ll show you what you can buy, how to fund it from abroad, the tax/TDS traps buyers often miss, and a simple execution plan you can follow from your couch-even if you’re 5,000 miles away. I closed my last India purchase from Melbourne with a notarized PoA, midnight e-signs, and a lot of coffee. It’s very doable when you stick to the rules.

What you can (and can’t) buy, the law behind it, and a simple step-by-step plan

Short answer: yes, you can. The legal backbone here is the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018-“FEMA 21(R)/2018”. Pair this with the Real Estate (Regulation and Development) Act, 2016 (RERA) for project safety, and relevant sections of the Income-tax Act, 1961 for TDS.

Who is eligible?

• NRI (Indian citizen living outside India) - allowed to buy residential and commercial property.
• OCI (Overseas Citizen of India) - same as NRI for buying property.
• PIO references in older laws now fold into OCI. Treat OCI as the operative status.
• Foreign nationals of non-Indian origin living outside India - cannot buy property in India (limited lease options up to 5 years).
• Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan - require prior RBI approval for any acquisition or transfer.

What types of property?

• Allowed: Any number of residential and commercial properties. No cap on count.
• Not allowed to purchase: Agricultural land, plantation property, farmhouses. You may inherit these but not buy them.

How must you pay?

• Use banking channels only: inward remittance or from your NRE/NRO/FCNR accounts.
• No cash, no traveller’s cheques, no direct foreign currency handover to the seller.
• Joint purchases with a resident relative are fine, but your contribution must still flow through permitted channels.

Home loans?

• Yes, Indian banks/HFCs can lend to NRIs/OCIs in INR. Typical LTV is up to ~80% of property value; rates are often 25-75 bps higher than resident rates.
• EMI repayment: from NRE/NRO/FCNR or rent from the property. You can also prepay via inward remittance.
• Expect a resident Indian co-applicant/PoA for smoother processing.

Documents you’ll actually need

• PAN (Rule 114B makes PAN mandatory for high-value property deals).
• Passport and valid visa/OCI card.
• Overseas address proof and Indian address (if any).
• NRE/NRO/FCNR account details; 6-12 months bank statements.
• Income proof (employment letter, salary slips, overseas tax returns).
• For loan: KYC, credit checks, FATCA/CRS forms.
• Power of Attorney (PoA) if you won’t be in India for registration-get it notarized and apostilled/consularized in your country.

Quick legal references you can cite confidently

• FEMA 21(R)/2018 - Acquisition/Transfer of Immovable Property by NRIs/OCIs.
• RERA Act, 2016 - Project registration, disclosures, escrow, and timelines.
• Income-tax Act, 1961 - Sections 194-IA, 195 (TDS on property), 139 (ITR), Rule 114B (PAN).

Step-by-step: from browsing to registration

1. Define scope and budget: Decide city, ready vs under-construction, and a hard budget. Keep a 5-8% buffer for stamp duty, registration, and misc charges.
2. Open/refresh NRE and NRO accounts: Keep both active. Park India-side expenses in NRO; remittances for purchase usually move from NRE/FCNR or inward remittance.
3. Line up a bank pre-approval: A pre-sanction letter locks your loan bandwidth and strengthens your negotiation position.
4. Due diligence on the property: Pull the title chain (mother deed), latest encumbrance certificate, RERA registration number, approved plans, occupation certificate (ready units), society/association NOC, and tax paid receipts.
5. PoA if overseas: Execute a specific PoA in favor of a trusted resident relative or your lawyer. Notarize and apostille/consularize it. Courier originals to India.
6. Agreement to Sell: Pay token/booking via bank transfer only. Insist all receipts record your NRE/NRO remitter details.
7. TDS planning: If the seller is resident, you must deduct 1% TDS u/s 194-IA on the higher of sale consideration or stamp duty value (threshold Rs 50 lakh). If the seller is NRI, TDS u/s 195 applies on capital gains-often withheld on gross unless a lower deduction certificate (Sec 197) is obtained.
8. Final funding and loan disbursal: Bank disburses as per progress (for under-construction) or in one shot (resale). Your margin money must move via permitted accounts.
9. Registration and stamp duty: Pay state stamp duty and registration fees via e-challan/GRAS/state portal or at the sub-registrar. Your PoA holder can attend if authorized.
10. Post-registration checklist: Mutation/Khata transfer, society share certificate, utility name changes, and storing originals in a safe. Add property to your India will.

Real example from my notebook

I bought a 2BHK in Bengaluru from Melbourne. I got a bank pre-approval, wired the margin from my NRE, set up a specific PoA to my brother, and scheduled registration on a weekday afternoon to avoid queues. The seller was resident, so I deducted 1% TDS u/s 194-IA on the stamp duty value (which was higher than the stated price), paid duty/registration online, and my brother signed with the PoA. Total time from “let’s do it” to keys: 7 weeks. Stress level: medium, but only because I double-checked the title chain twice.

Money, taxes, repatriation: the parts that trip people up

Let’s kill the biggest myths first.

• “I’ll pay cash when I land.” No. All payments must run through a bank trail-NRE/NRO/FCNR or inward remittance.
• “OCI means I can buy farmland.” Still no. That restriction hasn’t changed as of September 2025.
• “I’m the buyer; TDS is the seller’s headache.” Not always. If you pay an NRI seller, you must withhold TDS u/s 195 and deposit it on time.

Stamp duty and registration

• These are state taxes. As a rule of thumb, budget 5-11% for stamp duty and 1% for registration. Cities may add a metro/cess. Some states offer a 1% stamp duty concession for women buyers.
• Always pay duty/fees via official channels. Keep e-challans and receipts safe.

TDS, in detail

• Buying from a resident seller: Deduct 1% u/s 194-IA on the higher of the agreement value or stamp duty value, if the consideration is Rs 50 lakh or more. Deposit within 30 days from month-end and issue Form 16B to the seller.
• Buying from an NRI/OCI seller: Deduct u/s 195. Long-term capital gains (held >24 months) are taxed at 20% plus surcharge and cess; short term is taxed at slab rates (often 30% for top slab). In practice, buyers deduct on the gross sale price unless the seller shows a lower deduction certificate from the Assessing Officer under Sec 197.
• Practical tip: If your seller is NRI, lock the TDS process early. Otherwise, registrations get delayed.

Recurring taxes

• Property tax: Pay to the local municipal body annually/half-yearly.
• Rental income: Taxable in India. If your tenant pays you abroad or to NRE/NRO, the tenant must deduct TDS u/s 195 (typically 30%+cess) and deposit it.

Repatriation: how money goes back out

• Sale proceeds of property: You can repatriate up to USD 1 million per financial year from your NRO account, subject to payment of applicable taxes. Bankers will ask for CA certification (Form 15CB) and your undertaking (Form 15CA).
• If you used NRE/FCNR funds to purchase: You can repatriate the principal up to the original forex amount paid for purchase (for a maximum of two residential properties), subject to conditions. Gains over that still follow the USD 1 million route.
• Rent: Freely repatriable after taxes. Keep TDS certificates and tax challans handy.

Funding strategy that reduces friction

• Buffer 10% for “unknowns”: Society charges, parking, club fees, meter deposit, or last-minute valuation gaps during loan disbursal.
• Split inflows: Keep your margin in NRE for cleaner repatriation later, and route India-side incidentals from NRO.
• Do not “round-trip” funds (sending money to a resident relative who pays on your behalf). It muddles your trail. Transfer to your own NRE/NRO, then to the seller.

Home loan do’s and don’ts

• Loan tenor: Often capped at 20-25 years for NRIs; some banks cap at retirement age. Expect 25-75 bps higher than resident rates.
• Documents: Overseas income proof, work permit/visa, employment contract, bank statements. If self-employed, add business financials and tax returns.
• EMIs: Set up auto-debit from NRE/NRO. If your salary is in AUD, USD, etc., consider currency risk-don’t stretch the EMI beyond what you can sustain after a 10-15% FX swing.
• Prepayment: Usually penalty-free for floating-rate loans. Confirm your specific lender’s policy.

Title and project risk guardrails

• Insist on RERA-registered projects for under-construction. Check the state RERA portal for filings and delay history.
• For resale, run an independent title search (12-30 years), pull encumbrance certificates, and check for litigation or family settlements.
• Always verify sanctioned plans and occupation certificate for ready units. Society NOC if applicable.

One big SEO answer you might be searching for in plain words: NRI property purchase India is legal, common, and safe when you follow FEMA 21(R)/2018, use bank channels, manage TDS correctly, and verify title with RERA documents.

Execution playbook: checklists, pitfalls, FAQs, and your next steps

Jobs-to-be-done you probably care about right now:

• Confirm I’m allowed to buy this specific type of property.
• Know exactly how to pay from abroad and get a loan.
• Avoid tax/TDS and documentary mistakes that cause delays.
• Have a simple step-by-step I can hand to my PoA.
• Know how to move money back out when I sell.

Buyer’s checklist (copy-paste this to Notes)

• Status: NRI/OCI (not restricted-country citizen, or you have RBI approval).
• Property type: Residential/commercial only (not agri/plantation/farmhouse) unless inherited.
• KYC ready: PAN, passport, visa/OCI, address proofs.
• Banking: Active NRE and NRO. FCNR if you hold one.
• Loan: Pre-approval in hand; interest and tenor understood.
• Title: Mother deed + 12-30 year search, encumbrance certificate, tax paid receipts.
• RERA: Registration checked; approvals and promised specs match brochures.
• TDS path: 194-IA vs 195 determined; lower deduction certificate plan if seller is NRI.
• PoA: Specific PoA notarized and apostilled; original couriered.
• Taxes/fees: Stamp duty/registration funds ready; e-challan plan set.
• Post-registration: Mutation/Khata, society share certificate, utilities transfer, digital and physical storage of originals, updated will.

Pitfalls that cost NRIs time and money

• Paying the seller from a resident relative’s account. Don’t. Send to your NRE/NRO first.
• Forgetting that 194-IA uses the higher of agreement value or stamp duty value.
• Assuming tenant TDS rules are the same for NRIs. They’re not-tenant must deduct u/s 195 for NRI landlords.
• Skipping an apostille on your overseas PoA. Many sub-registrars won’t accept it otherwise.
• Buying “farmhouse” on the outskirts because it looks like a villa. If the land is classified agricultural, you cannot buy as NRI/OCI.

Mini-FAQ

• Can an NRI buy multiple houses in India? Yes. No limit on count.
• Can I co-own with my resident spouse? Yes. Ensure your share is funded via permitted channels.
• Is PAN mandatory? Yes for high-value deals; practically, you will need PAN for registration and TDS.
• Do I need Aadhaar? No, not for buying property.
• Can I gift a flat to my NRI child? Yes. Residential/commercial can be gifted. Agricultural/plantation/farmhouse property can be gifted only to a resident Indian relative (as per Companies Act definition).
• Can I buy in Jammu & Kashmir or the Northeast? Check state land laws. FEMA allows residential/commercial for NRIs/OCIs, but local laws and special restrictions may apply to certain land classes.
• How long to repatriate after sale? Banks process within days once you provide taxes paid proof and CA certificate. The USD 1 million cap per FY applies from NRO.
• Do I need to report the purchase to RBI? No routine reporting is required for permitted acquisitions.

Scenario playbook

• Buying under-construction from abroad: RERA check, builder escrow verification, stage-wise loan disbursal, PoA for registration, post-dated NACH/standing instruction for EMIs.
• Buying resale from an NRI seller: Start Sec 197 lower TDS certificate process early (4-6 weeks). Without it, you’ll likely deduct on gross consideration, which the seller won’t love.
• Inheriting a farmhouse: You can inherit and hold it. If you plan to sell, you can sell to a resident Indian per local land laws. Repatriate proceeds via the USD 1 million route after taxes with 15CA/CB.
• Joint purchase with a resident parent: Fine. Keep clean trails showing your portion came from NRE/NRO or inward remittance.

Five pro tips I wish someone gave me

• Use one bank for all inflows/outflows on the deal; it simplifies 15CA/CB later.
• Add a 15-day “title cure” clause in your Agreement to Sell to fix any minor defects before registration.
• Verify physical possession, not just papers. A five-minute visit avoids a five-month headache.
• Lock your exchange rate for large transfers if your currency is volatile. Even a 1% swing is real money.
• Store notarized copies of all documents in a separate place from the originals.

Decision quick-check (follow this tree in your head)

• Are you NRI/OCI? If no, stop. If yes, continue.
• Is the property residential/commercial? If no (it’s agricultural/plantation/farmhouse), don’t buy.
• Are you a citizen of a restricted country? If yes, get RBI approval first.
• Will all money flow via NRE/NRO/FCNR or inward remittance? If no, fix the funding path.
• Do you know your TDS section (194-IA vs 195)? If no, identify the seller’s status now.

Next steps

• Open/refresh your NRE and NRO accounts; keep both active.
• Get a home loan pre-approval; collect KYC and income proofs.
• Engage a local real estate lawyer for a title search; don’t rely on the broker.
• Draft a specific PoA and get it notarized and apostilled in your country.
• Shortlist RERA-registered projects or vetted resales; run through the buyer’s checklist above.

Troubleshooting

• Bank is slow on PoA acceptance: Use the bank’s own PoA format. It speeds up legal checks.
• Seller won’t agree to TDS deduction: It’s non-negotiable. Offer help with the paperwork, not a waiver.
• Stamp duty shock at the last minute: Confirm valuation with the sub-registrar or a local valuer ahead of time.
• Loan sanctioned lower than expected: Rework LTV, add co-applicant income, or bridge with margin from NRE. Don’t accept a builder’s “internal loan” without reading the fine print.

Primary sources worth noting when you speak to banks or registrars

• FEMA 21(R)/2018: Acquisition and Transfer of Immovable Property in India by NRIs/OCIs.
• RERA Act, 2016: State portals show project registration, approvals, escrow, and complaints.
• Income-tax Act: Sections 194-IA (1% TDS), 195 (TDS on payments to non-residents), Rule 114B (PAN).

If you remember just three things: stick to bank channels, get TDS right, and insist on a clean title backed by RERA docs. Do that, and buying from abroad feels a lot less like a leap and more like a checklist.