NRI Buying Property in India: Key Rules, Documentation, and Taxation Requirements for NRIs

Many people ask, Can NRIs buy property in India? The answer is yes. NRIs are legally allowed to own/sell/rent a house, apartment, land or building in India. Clear rules under FEMA guide this process. While NRIs are permitted to purchase residential or commercial properties, plantation lands, agricultural lands and farmhouses are not allowed. All payments must be made in Indian currency through NRE or NRO bank accounts to ensure compliance with applicable regulations.

Along with the purchase price, buyers must also pay registration fees, stamp duty and later capital gain tax if they sell the property. Rental income earned is taxable in India. This guide explains NRI rules for buying property in India, making investment clear and safe.

NRI Property Purchase Essentials - Quick Reference

For overseas Indians, property investment is an attractive option; however, it is essential to follow the rules carefully. Below is a simple table to help understand in a better way:

What Property can an NRI buy in India?

According to the 2025 Foreign Exchange Management Regulations, NRIs are allowed to acquire property within India. India allows NRIs to invest in diverse residential and commercial real estate, with exceptions for agricultural properties such as farmhouses, agricultural land, and plantations. The Indian Government has placed no limits on the number of properties an NRI can procure. Nevertheless, sufficient capital in an NRI account is mandatory to acquire any property, and this includes funds received through inbound remittances.

Requirements for Purchase of Property by an NRI in India

NRIs can buy residential or commercial properties in India, but must follow FEMA rules, use Indian bank accounts, and comply with tax, payment and documentation requirements.

1. Document Requirements

The documents required for an NRI to buy property in India include identity, banking, and tax proof, ensuring smooth, legal, and hassle-free property transactions. Below are a few documents to keep in hand:

• Copy of Indian passport and a valid visa for identity and residency proof.
• Work permit from the country of residence confirming employment status.
• Recent income tax returns to verify tax compliance and financial standing.
• Last 6 months payslip as proof of a regular income source.
• Property paper including title deed, and No Objection Certificate (NOC) from the housing society.

2. Empowering Through Special Power of Attorney

A Power of Attorney (PoA) allows NRIs to authorise someone in India to manage property matters on their behalf, ensuring convenience, legal compliance and hassle-free transactions. The points below will help you understand it:

• NRIs unable to visit India can assign a trusted person through a Power of Attorney ( PoA) for property transactions.
•  The appointed representative can legally sign agreements, register property, and manage required paperwork on behalf of the NRI owner.
• To create a valid PoA, NRIs must visit the Indian Embassy or Consulate in their country of residence.
• Once attested, the PoA must be sent to India and adjudicated at the local sub registrar’s office for validity.

3. NRE and NRO Accounts for Financial Flexibility

NRO or NRO accounts help NRIs manage income earned abroad and in India separately, ensuring smooth money transfers, savings, and compliance with Indian banking and tax rules.

• An NRE account lets NRIs transfer foreign income to India with full repatriation of funds and tax-free interest earnings in India.
• An NRO account is used to manage income earned in India, such as rent, pension, or investment, with partial repatriation allowed.
• NRE accounts are best for bringing overseas earnings into India, while NRO accounts handle local Indian income securely and legally.
• Maintaining both accounts ensures financial flexibility, smooth property investments and compliance with FEMA and Indian taxation laws for NRIs 

Documentation that an NRI needs to Buy Property in India

The good part is that you don’t need to show too many documents when you are looking to buy a property. You’ll need a valid passport, proof of address, a Permanent Account Number (PAN) card, and a recent photograph.

Documents Required For NRI To Continue Ownership Of Property In India:

• Copy of the passport
• Copy of the PAN card
• Copy of the OCI/PIO card (if applicable)
• Copy of the sale deed or title deed of the property
• Copy of the latest property tax receipt
• Copy of the latest electricity bill or water bill
• A letter of authorization to a representative in India (if applicable)

Owning Properties in India as an NRI: Guidelines 

As an NRI, you might be worried about what happens to your properties in India after you move abroad. Well, the good news is that you can continue to own your properties in India even after becoming an NRI. However, there are certain rules and regulations that you need to be aware of.

Steps To Follow To Continue Ownership Of Property In India:

• Step 1- Get all the necessary documents ready.
• Step 2- Inform the builder or society about your NRI status and provide them with the required documents.
• Step 3- Appoint a representative in India, who can act on your behalf, in case of any legal matters related to the property.
• Step 4- Ensure that the property tax and utility bills are paid on time.
• Step 5- If you plan to sell the property, you need to be aware of the tax implications of the purchase of property by NRI in India.

Joint Ownership of Property in India

An NRI can buy property in their own name or jointly with any other NRI. The property cannot be in joint ownership with a resident Indian or with those who are otherwise not allowed to buy property in India.

NRI property tax for Indian Property

NRIs and resident Indians have different tax systems they have to follow. So, NRIs who buy property have to deduct Income Tax at 1% if the value of the property is more than 50 lakhs, and this amount has to be paid to the Income Tax Department. But, if you’re buying this property from another NRI, this rate is much higher. If the property is for self-use and is financed through a home loan, the interest paid on the loan is deductible from the NRI’s total taxable income. The deductible amount is capped at Rs 1.5 lakhs, and NRIs can also get tax deduction benefits on the repayment of the loan.

If the property is not for self-use but to earn rental income, then NRIs can also deduct the interest on the loan from their taxable income, but with no maximum limit of Rs 1.5 lakhs. NRIs can also use the house tax as a deduction on their taxes. It’s also important to note that 30% of rental income is allowed as a standard deduction for repairs, irrespective of whether the repairs were carried out.

Tax Implications For NRI Buying Property In India:

If you are an NRI and want to purchase a property in India, you need to be aware of the tax implications.

• As per the Income Tax Act, 1961, an NRI buying property in India is subject to TDS (Tax Deducted at Source) at the rate of 20%.
• The TDS is calculated on the total value of the property and includes the cost of amenities, parking, and any other charges.
• However, if the property value is less than Rs. 50 lakhs, the TDS rate is 1%.
• To avoid TDS for NRI buying property in India, you can apply for a certificate of lower deduction or exemption from TDS.

Tax Deductions for NRI Property Sales in India

It is essential to know how much TDS on the sale of property by NRI in India, where the calculation of TDS (or the tax deducted at source) is done at 20.6% on LTCG (long-term capital gains) and 30.9% on STCG (short-term capital gains). That said, the final rate for both Indian residents and NRIs will not be that dissimilar. For instance, an NRI with a lower tax slab will also be eligible to apply for a refund of the TDS, provided their income tax returns are filed to qualify. 

Funds Repatriation Back to Home Country Abroad

You should be aware of some guidelines in regards to funds repatriation back to your home country abroad if you are an NRI. As a person of Indian origin or PIO, you are allowed to repatriate the gains from any immovable property sale, given the conditions below are met:

• You should purchase the property as per FEMA’s directions that apply at the time of buying
• The amount that you will repatriate cannot be more than the amount that you originally paid for the property, in case the same was purchased through a foreign exchange or any funds that you may hold in an FCNR (B) or Foreign Currency Non-Resident (Bank) accounts

That said, you can repatriate a maximum of USD 1 million every fiscal year:

• If the property was bought from any INR source of funds
• If the property was received as a gift 
• If the property was an inheritance

Note that in all of these points, you will have to provide proof as prescribed by RBI guidelines and the Central Board of Direct Taxes CBDT.

How can NRIs pay for the Property they buy in India?

NRIs now have the option to secure a home loan for purchasing residential property in India. The RBI has granted approval to registered banks and housing finance institutions to provide these loans. All transactions must be conducted in Indian currency. The disbursed loan amount cannot be credited directly to the NRI's bank account but will be directed to the seller's or developer's account. Repayment can be facilitated through an NRI's NRO/NRE account or FCNR deposits.

If an NRI is making a part or full payment without a home loan, then they can do so by remitting the money through authorised banking channels from abroad. They can also use money in their NRE/NRO or FCNR accounts. Traveller’s cheques or foreign currency is not an acceptable means of payment. Home loans can be paid by using the funds in the NRO account, remitting money through banking channels, or even from the rent earned after subletting the property.

NoBroker Services for NRIs Looking to Buy Property in India

For NRIs, buying a property in India from abroad can be stressful. NoBroker makes it simple, safe, and affordable with end-to-end support. From property search to final registration, everything is smoothly handled, allowing you to invest with peace of mind. 

• Dedicated Relationship Manager: They find properties matching your needs and update you regularly through WhatsApp and email.
• Property Verification: NoBroker ensures the property has a clear title, approvals, and no legal disputes.
• Home Inspection: They inspect civil, plumbing, electrical, and safety aspects to identify and avoid hidden defects.
• Sales Deed Assistance: NoBroker gives full support in preparing and registering the sale deed legally.
• Affordable Services: NoBroker offers budget-friendly solutions that save time, money, and are stress-free.