NRI Guide to Buying Property in India: FEMA Rules, Taxes & Repatriation
Dasadia Editorial Team · Updated June 2026
For a Non-Resident Indian, buying property back home is one of the most popular ways to stay invested in India — but it comes with a layer of rules a resident buyer never sees. Three frameworks govern the journey: FEMA (which controls what you can buy and how you must pay), India’s tax laws (which decide what you owe on rent and on sale), and the RBI’s repatriation rules (which determine how much money you can later move abroad). Get these right and the process is smooth; get them wrong and you risk penalties, frozen funds, or an invalid transaction.
This guide walks an NRI through the full lifecycle — eligibility, FEMA-compliant payment, documents, home loans, tax on rent and on sale, double-taxation relief, and repatriating your money — so you can invest confidently and legally.
Key Takeaways
- NRIs and OCIs can buy unlimited residential and commercial property in India — but not agricultural land, plantations or farmhouses (except by inheritance).
- Payment must go through NRE, NRO or FCNR accounts or inward remittance — cash and foreign currency notes are prohibited under FEMA.
- Rental income is taxable in India, with TDS deducted (around 31.2%) and a 30% standard deduction available.
- On sale, long-term gains (property held over 24 months) are taxed at 12.5%, but the buyer deducts TDS on the entire sale value — reducible via a Lower TDS Certificate.
- NRE funds are freely repatriable; NRO repatriation is capped at USD 1 million per financial year with a CA certificate.
- DTAA prevents double taxation but generally does not exempt Indian property gains from Indian tax.
Can NRIs Buy Property in India?
Yes. Under the Foreign Exchange Management Act (FEMA), 1999, NRIs and OCI cardholders can purchase any number of residential and commercial properties in India — with no upper limit and no prior RBI approval required. OCI holders enjoy the same acquisition rights as NRIs.
The key restriction: NRIs and OCIs cannot buy agricultural land, plantation property or farmhouses. These can only be acquired through inheritance or gift from a resident Indian. Attempting to buy farmland through a resident’s name (a benami arrangement) is a serious offence, and FEMA contraventions can attract penalties of up to three times the amount involved — so the type of property you buy matters enormously.
Source: RBI (FEMA Master Directions) · NoBroker
FEMA Rules: How You Must Pay
FEMA does not just control what you buy — it controls how you pay. Every rupee must flow through formal Indian banking channels, creating a traceable audit trail. Permitted routes are your NRE, NRO or FCNR(B) account, or a direct inward remittance from abroad. Cash, foreign-currency notes and traveller’s cheques are strictly prohibited, regardless of the amount.
Choosing the right account matters for later repatriation: funds you bring from abroad (NRE/FCNR) move out freely, while Indian-income (NRO) funds face the annual cap. Always retain banking proof of every payment.
Source: Reserve Bank of India · Assetly
Documents You Will Need
- A valid passport, and OCI card if applicable (PIO/OCI status proof).
- PAN card — mandatory for registration, TDS and all tax compliance.
- Visa or work-permit copy and overseas address proof.
- NRE/NRO bank statements and the Foreign Inward Remittance Certificate (FIRC) for remitted funds.
- A Power of Attorney (PoA) if you are buying remotely through a representative — commonly used by NRIs abroad.
A registered PoA lets a trusted person in India sign and register on your behalf, which is often essential when you cannot travel. The registration itself takes a day or two, but the full purchase — title checks, documentation, stamp duty, mutation — typically runs over several weeks, and remote PoA purchases can take longer due to attestation.
Source: BestTaxInfo · Legiscore
Home Loans for NRIs
NRIs can take home loans from Indian banks and housing finance companies for residential property, typically financing 75–90% of the value, with the balance paid as a down payment from your own funds. The important compliance point is repayment: EMIs must be paid through your NRE or NRO account or by inward remittance from abroad — not in cash. Loan terms broadly follow RBI guidelines, and your eligibility is assessed on income, much like a resident’s, though documentation requirements are heavier for non-residents.
Source: SBNRI · Sheokand Legal
Tax on Rental Income
If you let out your Indian property, the rent is taxable in India under ‘Income from House Property’. Because you are a non-resident, your tenant is required to deduct TDS before paying you — at a high rate of around 31.2% — and deposit it with the government. You are not stuck with that, however: you can claim the usual deductions (a 30% standard deduction on net annual value, plus home-loan interest), and if your actual tax liability is lower than the TDS deducted, you recover the difference by filing an Indian income-tax return (ITR-2). To avoid the cash-flow hit upfront, you or your tenant can apply for a lower-deduction certificate.
Source: Income Tax Department · Investmates
Tax When You Sell: Capital Gains and TDS
When you eventually sell, the profit is taxed in India. Property held for more than 24 months qualifies as long-term capital gains, taxed at 12.5% (without indexation, following the July 2024 change) plus surcharge and cess; property held for less is short-term, taxed at your slab rate.
The catch unique to NRIs is TDS. When you sell, the buyer must deduct TDS on the entire sale consideration — not just the gain — at the applicable capital-gains rate plus surcharge and cess, which is far higher than the 1% that applies when the seller is a resident. This usually exceeds your actual liability and locks up part of your money until you claim a refund. The fix is to apply for a Lower TDS Certificate (Form 13) from the Income Tax Department before the sale, so the buyer deducts closer to your real liability. You can also reduce or defer the gain by reinvesting under Section 54 (in another house) or Section 54EC (in specified bonds).
Source: Income Tax Department · TaxGarden · ClearTax
DTAA: Avoiding Double Taxation
India has Double Taxation Avoidance Agreements (DTAA) with over 90 countries, which ensure you are not taxed twice on the same income — either the income is taxed in only one country, or the tax paid in India is credited against your liability in your country of residence. To claim treaty benefits you generally need a Tax Residency Certificate (TRC) from your country and Form 10F. One important caveat: for immovable property, most DTAAs (including India–UAE, India–USA and India–UK) give India the primary taxing right — so a DTAA prevents double taxation but does not make your Indian property gains tax-free in India.
Source: Income Tax Department · TaxGarden
Repatriation: Moving Your Money Abroad
Repatriation — sending sale proceeds or rental income back overseas — is where many NRIs get caught out. The rules turn on how you originally paid:
In short: money brought from abroad can largely go back; Indian-income funds face the USD 1 million annual NRO ceiling. The sale proceeds of up to two residential properties can be repatriated up to the original foreign-currency investment; anything beyond that routes through the NRO limit. Your bank will not process the overseas transfer without Form 15CA and (above ₹5 lakh) a chartered accountant’s Form 15CB, and all taxes must be cleared first.
Source: Reserve Bank of India · Investmates · SBNRI
Common Mistakes to Avoid
- Buying agricultural land, a plantation or a farmhouse — prohibited, with penalties up to three times the amount.
- Paying in cash or foreign currency instead of through NRE/NRO/FCNR or inward remittance.
- Not applying for a Lower TDS Certificate before selling, and overpaying TDS on the full sale value.
- Missing DTAA benefits by failing to obtain a Tax Residency Certificate and filing Form 10F.
- Skipping the Indian ITR — it is how you claim TDS refunds and treaty relief.
- Forgetting Form 15CA/15CB, without which the bank will not remit funds abroad.
Source: BestTaxInfo · Assetly
Verified Key Facts
- NRIs/OCIs can buy unlimited residential & commercial property, but not agricultural land/plantation/farmhouse: Verified (RBI/FEMA; NoBroker).
- Property payments must use NRE/NRO/FCNR or inward remittance — no cash: Verified (RBI; Assetly).
- FEMA contraventions can attract penalties up to 3x the amount involved: Verified (Legiscore; Assetly).
- Rental income TDS for NRIs is around 31.2%, with a 30% standard deduction available: Verified (Investmates).
- LTCG on property held over 24 months is taxed at 12.5% (post-July 2024); buyer deducts TDS on full sale value: Verified (Income Tax Dept; TaxGarden).
- NRO repatriation is capped at USD 1 million per financial year with Form 15CA/15CB: Verified (RBI; SBNRI).
Frequently Asked Questions
Yes. Under FEMA, NRIs and OCI cardholders can buy unlimited residential and commercial property in India without RBI approval. They cannot buy agricultural land, plantations or farmhouses, except through inheritance or gift from a resident.
Only through formal banking channels — an NRE, NRO or FCNR(B) account, or a direct inward remittance from abroad. Cash, foreign-currency notes and traveller’s cheques are prohibited under FEMA, and violations carry heavy penalties.
An NRE account holds foreign income remitted to India and is freely repatriable; an NRO account holds Indian income such as rent and sale proceeds and is subject to the USD 1 million annual repatriation cap. You can buy using either, but rent and sale proceeds are credited to NRO.
Yes. Rental income is taxable in India, and the tenant deducts TDS (around 31.2%) before paying. You can claim a 30% standard deduction and home-loan interest, and recover excess TDS by filing an Indian income-tax return.
Long-term gains (property held over 24 months) are taxed at 12.5% plus surcharge and cess; short-term gains are taxed at slab rates. Exemptions under Section 54 (reinvest in a house) and Section 54EC (specified bonds) can reduce the tax.
The buyer must deduct TDS on the entire sale consideration at the applicable capital-gains rate plus surcharge and cess — far higher than the 1% for resident sellers. Apply for a Lower TDS Certificate (Form 13) before the sale to reduce it to closer to your actual liability.
Yes, subject to conditions. If you bought with NRE/FCNR funds, you can repatriate up to the original investment for up to two residential properties. NRO funds are capped at USD 1 million per financial year, with Form 15CA/15CB and taxes paid.
No. DTAA prevents double taxation, but for immovable property most treaties give India the primary taxing right. So your Indian property income and gains remain taxable in India — you simply avoid being taxed again in your home country, usually via a foreign tax credit.
Yes. Indian banks lend to NRIs for residential property, typically 75–90% of value. EMIs must be paid through your NRE/NRO account or inward remittance, not in cash.
A valid passport (and OCI card if applicable), PAN card, visa copy, overseas address proof, NRE/NRO statements, FIRC for remitted funds, and a Power of Attorney if buying remotely through a representative.
Yes. A registered Power of Attorney lets a trusted person in India sign and register the property on your behalf, which is common for NRIs who cannot travel. Remote PoA purchases may take longer due to document attestation.
FEMA contraventions can attract penalties of up to three times the amount involved, and the transaction can be voided or funds frozen. Buying prohibited property such as agricultural land, or paying in cash, are common triggers — so route every payment through approved banking channels and keep records.
Conclusion and Next Steps
Buying property in India as an NRI is entirely achievable — the country welcomes the investment — but it sits on three pillars you must respect: FEMA (what you buy and how you pay), tax (what you owe on rent and sale), and repatriation (how you bring money back). Stick to residential or commercial property, pay only through NRE/NRO/FCNR channels, file your Indian return, and plan your sale and repatriation in advance, and the process is smooth and rewarding.
Next step: confirm the property type is permitted, set up the right bank account for your funds, verify the project on the official RERA portal and its title, and engage a chartered accountant early to handle TDS, ITR and the Form 15CA/15CB repatriation paperwork.
Sources and References
- Reserve Bank of India — FEMA Master Directions on immovable property
- Income Tax Department — NRI taxation, capital gains & TDS
- ClearTax — income tax for NRIs (2026)
- SBNRI — NRI guide to buying property: rules, taxes & FEMA
- NoBroker — NRIs buying property in India
- Investmates — FEMA rules & TDS for NRIs
- TaxGarden — NRI capital gains, TDS & ITR guide
- Assetly — FEMA rules & NRI property capital gains
- BestTaxInfo — NRI buying property: rules, tax, documents & FEMA
- Legiscore — NRI property buying complete guide
Disclaimer
This article is for informational purposes only and does not constitute legal, financial or tax advice. FEMA rules, tax rates, TDS provisions, DTAA terms and repatriation limits are indicative as of June 2026, are complex, and change over time and by individual circumstance. Always verify the current position with the Reserve Bank of India and the Income Tax Department, verify any project on the official MahaRERA portal, and consult a qualified chartered accountant and legal advisor before transacting.
An NRI Exploring a Home in Andheri East?
NRIs can buy residential property in India, and 153 East by Dasadia Developers LLP is a MahaRERA-registered (PR1180002502968) residential project in J.B. Nagar, Andheri East — a well-connected micro-market close to business hubs and the metro — offering 1–4 BHK homes across a range of configurations. Get the brochure with floor plans and details, or arrange a site visit, and verify every approval on the official MahaRERA portal.
