NRI Guide to Buying a Flat in Mumbai (2026): FEMA, Tax & Step-by-Step
Dasadia Editorial Team · Updated July 2026
For millions of Non-Resident Indians, owning a home in Mumbai is both an emotional anchor and a smart investment — but buying from abroad means navigating an extra layer of rules that residents never face. FEMA governs how you pay, banking rules dictate which accounts you use, a Power of Attorney lets you buy without flying home, and several taxes apply at purchase, while you rent, and when you sell. Get these right and the process is smooth; get them wrong and penalties can be steep. This 2026 guide walks you through all of it — the FEMA rules, the tax, and the step-by-step process — clearly.
Key takeaways
- NRIs and OCI cardholders can freely buy residential and commercial property in India — but not agricultural land or farmhouses.
- No RBI approval is needed; the permission is general under FEMA, with no limit on how many properties you own.
- Payment must flow through an NRE, NRO or FCNR account, in rupees — cash and foreign currency are prohibited.
- NRI home loans run up to 75-80% of value, over 20 years, usually with a resident Indian co-applicant.
- A Power of Attorney lets a trusted person in India buy on your behalf if you cannot travel.
- Taxes apply at three stages: buying (TDS, stamp duty, GST), renting (30% TDS), and selling (capital gains).
- You can repatriate NRE and FCNR funds freely, and up to USD 1 million a year from an NRO account with Forms 15CA and 15CB.
- FEMA breaches can attract penalties of up to three times the transaction value, so compliance is essential.
Source: Assetly · BestTaxInfo
Can NRIs buy property in India?
The good news first: yes, NRIs and OCI cardholders can freely buy residential and commercial property in India, with no prior approval from the Reserve Bank of India needed — this is granted as a general permission under FEMA, the Foreign Exchange Management Act. There is no limit on the number or value of homes or offices you may own. The one firm restriction is on land: NRIs cannot purchase agricultural land, plantation property or a farmhouse — these can only be acquired through inheritance or gift. FEMA is, in fact, surprisingly NRI-friendly; its purpose is not to block you from owning property but to ensure the money trail is clean, the property type is permitted, and the taxes are paid. Fall foul of it, though, and penalties can reach three times the transaction value, so compliance matters.
Paying for it: bank accounts and home loans
How you pay is where most NRIs slip up, because FEMA is strict about it: every rupee must flow through Indian banking channels, in Indian rupees, and cash, foreign-currency notes or traveller’s cheques are simply not allowed — a violation regardless of the amount. In practice, you pay from one of three accounts. An NRE (Non-Resident External) account holds money you send from abroad and is fully repatriable — money can go back out freely. An NRO (Non-Resident Ordinary) account holds your Indian income, such as rent, and repatriation from it is capped at USD 1 million a year. An FCNR account is a foreign-currency fixed deposit, also fully repatriable. A home loan is very much an option: major banks such as SBI, HDFC and ICICI lend to NRIs at up to 75-80% of the property value, for tenures up to 20 years, at interest rates similar to residents — though they often require a resident Indian co-applicant. Which account funds the purchase matters, as it shapes how easily you can repatriate the money later.
The documents you'll need — including Power of Attorney
Paperwork is the other common stumbling block, where missing one document can stall everything. The core set is straightforward: a valid Indian passport (or OCI card), a visa or residence permit for your country of stay, a PAN card — mandatory for registration and tax — proof of your overseas address, your NRE or NRO account statements, and a Foreign Inward Remittance Certificate for money sent from abroad. The instrument that makes remote buying possible is the Power of Attorney. If you cannot be physically present at the sub-registrar’s office to sign, a PoA lets a trusted relative or friend in India act for you — signing the agreement, completing registration, and collecting possession. It must be executed carefully: notarised in your country of residence, then attested or apostilled at the Indian embassy or consulate, and finally adjudicated and stamped in India. Because it grants real power over a valuable asset, choose your attorney wisely and keep the PoA specific and time-bound.
Source: Raheja Universal · BestTaxInfo
The step-by-step buying process
With the rules understood, the purchase itself follows a clear sequence. Here are the eight steps, from confirming eligibility to collecting your keys.
Source: BestTaxInfo · Raheja Universal
The tax you'll pay: buying, renting and selling
Tax meets an NRI buyer at three stages, and it helps to see them together. When you buy, you deduct TDS from the seller — 1% if they are a resident and the property exceeds ₹50 lakh, but a much higher 12.5% (or slab rates) if the seller is themselves an NRI — and you pay Mumbai’s stamp duty of 6% for men or 5% for women, registration of 1%, and, on an under-construction flat, 5% GST (nothing on a ready home with its Occupancy Certificate). While you own and let the property, your tenant must deduct 30% TDS on the rent under Section 195, though you can claim the 30% standard deduction and recover any excess by filing an Indian tax return. When you eventually sell, long-term gains — on a property held more than 24 months — are taxed at 12.5%, and short-term gains at your slab rate, with the buyer again deducting TDS on the full sale value. Crucially, India has tax treaties with more than 90 countries, so a double-taxation agreement usually ensures you are not taxed twice on the same income.
Source: Kalpataru · Raheja Universal
Repatriating your money: the USD 1 million rule
Getting your money back out of India is, for many NRIs, the whole point — and it follows clear rules. Funds in an NRE or FCNR account are fully repatriable, with no limit. From an NRO account, you can repatriate up to USD 1 million per financial year, once applicable taxes are paid and you have filed Forms 15CA (your declaration) and 15CB (a chartered accountant’s certificate). How you funded the purchase matters here: if you bought using NRE or inward-remitted funds, you can send the sale proceeds back up to the amount you originally brought in, for up to two residential properties in your lifetime; any capital gain beyond that goes into your NRO account and follows the USD 1 million rule. So plan repatriation before you buy — funding the purchase from your NRE account keeps the exit far simpler. Skipping the 15CA and 15CB filings carries a penalty and can see your bank block the transfer.
Why Mumbai and Andheri East suit NRI buyers
Mumbai remains a magnet for NRI buyers, and for good reasons: decadal-high property registrations, new metro lines halving commute times, deep rental demand and unmatched liquidity when it comes time to sell. Within the city, the eastern suburbs — Andheri East, Powai and the Bandra-Kurla belt — are perennial NRI favourites, prized for their rental yields and connectivity. Andheri East is especially well suited to an overseas buyer: it sits minutes from the international airport, a genuine convenience for frequent flyers; it is ringed by job hubs like SEEPZ, MIDC and BKC that keep tenant demand strong and vacancy low; and the new Metro Line 3 has further improved connectivity. For an NRI wanting a well-connected, income-generating asset in a liquid market, it is a natural fit — and a MahaRERA-registered project there offers the legal protection every remote buyer needs.
Source: Raheja Universal · BestTaxInfo
The bottom line
Buying a flat in Mumbai as an NRI is entirely achievable, provided you respect the extra rules that come with an overseas address. Under FEMA you may freely buy residential or commercial property — just not farmland — as long as you pay through your NRE, NRO or FCNR account and never in cash. Set up the right account, prepare your documents, execute a watertight Power of Attorney if you can’t travel, verify the project on MahaRERA, and budget for stamp duty, GST and TDS. Think about repatriation before you buy, lean on the tax treaty with your country to avoid double taxation, and keep every record for years. It is more paperwork than a resident faces, but none of it is difficult with good advice — and given the stakes, a property lawyer and a chartered accountant are investments, not costs.
Frequently asked questions
Yes. NRIs and OCI cardholders can freely buy residential and commercial property in India without RBI approval, under FEMA’s general permission. They cannot buy agricultural land, plantations or farmhouses, except by inheritance.
Only through Indian banking channels — an NRE, NRO or FCNR account, or inward remittance, in Indian rupees. Cash, foreign-currency notes and traveller’s cheques are prohibited under FEMA.
An NRE account holds money sent from abroad and is fully repatriable; an NRO account holds Indian income like rent, with repatriation capped at USD 1 million a year. Sale proceeds land in the NRO account first.
Yes. Major banks lend to NRIs at up to 75-80% of the property value, for tenures up to 20 years, at rates similar to residents, usually with a resident co-applicant, repaid through an NRE or NRO account.
No. A Power of Attorney lets a trusted person in India sign the agreement, register the property and take possession on your behalf. It must be notarised, apostilled or attested at the Indian consulate, and stamped in India.
A passport or OCI card, visa, PAN card, overseas address proof, NRE/NRO account statements, a Foreign Inward Remittance Certificate, and a Power of Attorney if buying remotely.
Stamp duty (6% for men, 5% for women in Mumbai), 1% registration, 5% GST on under-construction property, and TDS deducted from the seller — 1% for a resident seller, more for an NRI seller.
The tenant deducts 30% TDS under Section 195, but the NRI can claim the 30% standard deduction and recover any excess by filing an Indian tax return.
Long-term gains (held over 24 months) at 12.5%, short-term at slab rates. The buyer deducts TDS on the full sale value; the NRI can obtain a lower-TDS certificate to reduce it.
NRE and FCNR funds are fully repatriable. From an NRO account, up to USD 1 million per financial year, after taxes and Forms 15CA and 15CB. Proceeds from NRE-funded purchases are repatriable up to the amount originally brought in, for two properties.
Usually yes. India has tax treaties with over 90 countries, so the double-taxation avoidance agreement with your country of residence typically prevents you being taxed twice on the same income.
Penalties can reach three times the transaction value, and the property may be attached or repatriation blocked. Using the wrong payment channel or an improperly executed PoA are common pitfalls.
Verified — key facts
- NRIs and OCI cardholders can buy residential and commercial property in India without RBI approval (FEMA general permission); agricultural land, plantations and farmhouses are barred except by inheritance.
- Payment must be via NRE, NRO or FCNR accounts or inward remittance, in rupees; cash, foreign currency and traveller's cheques are prohibited; FEMA breaches attract penalties up to 3× the transaction value.
- Accounts: NRE (foreign income, fully repatriable), NRO (Indian income, USD 1 million/year repatriation cap), FCNR (foreign-currency deposit, fully repatriable).
- NRI home loans: up to 75-80% LTV, tenures up to 20 years, rates similar to residents, often needing a resident co-applicant.
- A Power of Attorney (notarised, apostilled/attested at the Indian consulate, and stamped in India) allows remote buying; core documents include passport/OCI card, visa, PAN, overseas address proof and FIRC.
- Tax: 1% TDS buying from a resident (12.5%/slab from an NRI); Mumbai stamp duty 6%/5% + 1% registration; 5% GST on under-construction; 30% TDS on rent (Section 195); LTCG 12.5% / STCG slab on sale.
- Repatriation: NRE/FCNR unlimited; NRO up to USD 1 million/year with Forms 15CA and 15CB; NRE-funded purchases repatriable up to the amount brought in, for up to 2 residential properties; DTAAs with 90+ countries avoid double taxation.
Disclaimer: This article is for informational purposes only and is not legal, tax or financial advice. FEMA rules, RBI regulations, account and repatriation limits, loan terms, tax rates and documentation requirements are set by law, can change (including under the Income-tax Act, 2025 and RBI circulars), and depend on your specific circumstances and country of residence. Cross-border property transactions are complex. Always verify current rules with the RBI and Income Tax Department, and consult a qualified property lawyer and chartered accountant, before buying, remitting funds, or filing.
An NRI looking to buy in Andheri East?
Explore 153 East by Dasadia Developers LLP — a freehold, MahaRERA-registered residential address in J.B. Nagar, Andheri East, minutes from the metro, Western Express Highway and the international airport, in a pocket with strong, salary-driven rental demand. MahaRERA registration no. PR1180002502968. Get the brochure with floor plans, pricing and amenities, or book a site visit with our team.
