Can an NRI Buy Property in India?

Can an NRI Buy Property in India

What are the rules and regulations for NRI to buy property in India? Let’s know more about the advantages for NRI who wants to purchase real estate in India.

Can an NRI buy property in India? The answer is Yes! NRIs (non-resident Indians) are known to make significant real estate investments in India. According to precise figures, NRI investors have invested $13.3 billion in the Indian real estate industry, an increase from his $13.1 billion in investments from the previous year. Since the regulations regulating the real estate market have been changed to simplify everything, it is now simpler than ever for NRIs to invest in Indian real estate.

Any NRI must understand the Foreign Exchange Management Act(FEMA) requirements when it comes to buying a property in India. The number of homes an NRI can own in India is unrestricted, and NRIs and Persons of Indian Origin (PIOs) are considered at face value when financing real estate.

Recognising the Real Estate Investment Options Open to NRIs

Through Reserve Bank of India circulars, NRIs can purchase commercial or residential properties. It suggests that NRIs can buy property in India.

The Reserve Bank of India does not explicitly need to approve investors. Additionally, RBI does not need to receive any extra notifications or communications. NRIs can buy unlimited commercial and residential properties thanks to general permissions. Income tax regulations also let NRIs acquire as much real estate as they like.

Special RBI permission is needed if an NRI wants to buy a farmer or a plantation.

Methods of Payment for Real Estate in India

Payment in India is supplied through traveller’s checks; however, you cannot convert foreign currency because money for this purpose may only be received through authorised means, including banking channels.

Even the acquisition of homes with mortgages in Indian Rupees is permitted for NRIs. For the aim of financing real estate, mortgages are given by Indian employers to NRI personnel as well as by mortgage businesses or banks.

Regarding EMI payments for servicing Indian currency mortgages in India, the same must be done by direct transfer from overseas or funds retained in NRIs’ NRE/NRO/FCNR account balances. In addition to the aforementioned funding options, the mortgage may also get repaid through rent collected from the property or money sent from the accounts of the borrower’s family.

How to Invest in Indian Real Estate as an NRI?

First Step: Paper Work and Documents

Surprisingly, not much paperwork is needed to get NRIs started, and a valid passport is required.

  • Evidence of address
  • Card PAN
  • Photo

Second Step: Fundraising

The banks and mortgage lenders registered with the National Housing Bank can offer mortgage loans to NRIs to acquire residential properties in India with the support of the RBI. Only Indian cash may be used for any transactions. However, the money from the loan flows straight to the bank of the developer or seller. It doesn’t appear to matter unless you believe it to be a hoax.

However, you can pay back the loan using money from your FCNR (Fixed Term Deposit Foreign Currency Account) deposit or NRO (Non-Resident Ordinary)/NRE (Non-Resident External) account.

Third Step: How does General Property Function?

For convenience, an NRI may also purchase real estate under his or her name or in a joint venture with another NRI. Except in situations when the acquisition or transfer of real estate is carried out by a citizen of Pakistan, Bangladesh, Afghanistan, Sri Lanka, China, Nepal, Iran, or Bhutan. Despite leases, the maximum term for real estate in India is five years without prior authorisation from the Reserve Bank.

Step Four: NRI Wealth Tax

Resident Indians and NRIs are subject to separate tax laws. If the property’s value exceeds Rs. 5 lakhs, an NRI who buys real estate must deduct income tax at a rate of 1%, which must be paid to the Income Tax Department. However, the rate would be significantly greater if you purchase the home from another NRI. The NRI’s gross taxable income is reduced by the interest paid on the loan if the property is for personal use and is funded by a mortgage.

Step Five: Establish Power of Attorney

If the person cannot attend, she can utilise her POA to choose family members or other individuals to act on her behalf legally. However, you must visit the Indian Embassy in your city and country of residence to get a legitimate POA for her.

What Do You Need to Consider Before Making Investment as an NRI?

Some checkpoints must be considered if an NRI wants to invest in India.

Loans for homes

The time that is passing by is a very fortunate hour to buy a property on loan because, at this time, banks are providing a very low-interest rate of 6.5 per cent. An NRI may meet the 80 per cent loaning criterion on the property value, but it has a shortcoming: the requirement of a hefty time to get the documentation done.

Tax brackets associated with NRIs

Suppose an NRI sells a property in India; there will be a deduction of 20.6 per cent if it is for long-term capital gains and 30.9 per cent for short-term capital gains. Considering the current functionality of taxation, both NRIs and those who are residents of India have a similar tax rate. If an NRI has a lower tax slab associated with him, he can receive a refund from TDS by filing their income tax return (ITR).

Transfer rules associated with payment

NRIs have the alternate option of sending their funds to an NRO account in India, and then the payment can be made straight to the vendor from that account to their home country.

Informed decision-making

Suppose an NRI wants to make a well-suited decision about investment in India. In that case, there should be preparation done that includes verification of properties, databases related to required documents, KYC (know your customer), a plan related to payment, implications related to taxation, legalities involved, and other formalities associated with this. A trustworthy authority is required to ensure this process is smooth and efficient.

Is It Possible for NRI to Give POA for Property Purchase Transactions?

For any Indian citizen to complete procedures like registration, ownership, and the signing of sales contracts, experts advise granting a Power of Attorney. All contracts, deeds, mortgages, leases, sales, and other matters about property administration may be carried out using powers of attorney.

It is better to provide each person with a unique power of attorney only valid for that specific act. B. Only for leases or purchases. A power of attorney must be granted on the properly stamped document, following local legal requirements, or both. A power of attorney must then get notarised by an authorised officer of the Indian Embassy, Consulate, or Trade Board in that country.

When developers purchase land from NRIs, they usually request a PoA in their favour. He can refuse the PoA, but doing so would result in delays because all papers would need to be sent to a different country.


The Foreign Exchange Management Act (FEMA), which the Reserve Bank of India enforces, governs the purchase and acquisition of real estate by non-residents in India. For FEMA’s purposes, an Indian citizen residing outside India is called an NRI.

The NRI is fully permitted to purchase various sorts of real estate in India by the Reserve Bank of India. In India, you can purchase either residential or commercial properties.


Can NRIs purchase real estate or land in India?

Property can be purchased in India by non-resident Indians (NRIs). The Reserve Bank of India (RBI) has the authority to enact regulations under the Foreign Exchange Management Act (FEMA) that forbid, limit, or control the purchase or transfer of Indian real estate by persons who are not Indian citizens.

Are any tax benefits available to non-resident Indians who want to buy real estate?

There are no tax benefits available for NRIs. If you want to get benefits, you need to file your returns and become entitled to avail of the tax advantages.

How does NRI pay the mortgage for the home loan?

Payments are often made via NRO, NRE, NRNR, and FCNR accounts. According to RBI guidelines, these accounts are susceptible to modification.

What is the time frame for NRI housing loan repayment?

In bigger situations, the mortgage terms granted to NRIs are limited to five years. But other financial organisations provide loans with a seven-year term.

Can an Indian or NRI sell a home or piece of property without the Reserve Bank of India's approval?

Yes, the sale of the property has received broad permission from RBI. The purchase amount must be sent to India or deducted from the non-resident account balance kept in an Indian bank; nonetheless, if another foreigner from India buys the property.