Buying Property in India as NRI — Complete Guide 2026

NRIs (Non-Resident Indians) and OCIs (Overseas Citizens of India) can buy most types of property in India without RBI approval. Permitted: residential property (any number — no limit on how many you can buy), commercial property (offices, shops, commercial complexes). Restricted or prohibited without RBI permission: agricultural land, plantation property, farmhouse. These categories require specific RBI approval and are generally not granted. OCI vs NRI distinction for property: OCIs have the same property purchase rights as NRIs. PIOs (Persons of Indian Origin) who are not OCI holders: same rights as NRIs for property purchase. Foreign nationals (non-NRI, non-OCI): generally cannot buy property in India without FEMA approval (except specific categories like spouse of Indian citizen). Holding limit: no restriction on number of residential or commercial properties NRIs can hold. Multiple properties allowed.

NRI property funding options under FEMA: (1) NRE account (Non-Resident External): funds originating from foreign income remitted to India. Can be used for property purchase. Property bought with NRE funds can be repatriated (principal + capital gains) without limit after tax compliance. Most preferred funding route for clean repatriation. (2) NRO account (Non-Resident Ordinary): India-sourced income (rent, dividends, pension, etc.). Can be used for property purchase but repatriation of NRO-funded investment is capped at USD 1 million per year per NRI. (3) Home loan from Indian bank: NRIs can take home loans from Indian banks (SBI NRI Home Loan, HDFC NRI Loan, ICICI NRI Mortgage). EMI repayment via NRO/NRE account or through foreign inward remittance. (4) Loan from NRI home country: some NRIs take loans in their country of residence and remit to India. Requires RBI compliance if above thresholds. Cannot use: foreign currency directly for property purchase — must route through NRE or NRO account. Cannot use: traveler cheques or foreign cash — must be bank-to-bank transfer.

NRI property purchase process: Step 1 — Choose property: identify property (residential or commercial). Verify RERA registration at state portal. Check encumbrance certificate from sub-registrar. Confirm developer is not blacklisted. Step 2 — Due diligence: engage a local property lawyer. Verify title chain (last 30 years). Check: no pending court cases, no agricultural land classification, no government acquisition notice. Step 3 — Agreement to Sell: sign preliminary agreement (if under-construction: initial booking amount). Token amount via NRE or NRO account bank transfer only. Step 4 — Home loan (if required): apply to Indian bank NRI home loan division. Documentation: passport, OCI card, employment proof from abroad, salary/income statements in foreign currency, Indian credit history (CIBIL if available). Step 5 — Stamp duty and registration: pay stamp duty (varies 4-8% by state). Register at sub-registrar. If NRI not present: send through registered POA holder. Step 6 — Mutation: update revenue records with your name as owner at local municipal office. NRI does not need to be physically present if a POA holder handles registration.

NRI property purchase — tax considerations: (1) TDS on purchase from resident seller: NRI buyer must deduct TDS at 1% if purchase price above Rs50L (same as resident buyer rule under Section 194-IA). (2) TDS if buying from another NRI: higher TDS applies (Section 195 — 20% of sale value if LTCG property). Typically handled by the NRI seller side. (3) Stamp duty: same as for resident buyers in each state. No special NRI rate. (4) Rental income tax: once NRI owns property, rental income from India is taxable in India. Tenant deducts 31.2% TDS on rent paid to NRI (Section 194-IB/195). NRI can claim refund if actual tax is lower. (5) Capital gains at sale: when NRI sells, buyer deducts 20% TDS (if LTCG) on full sale value. NRI files ITR, claims Section 54 exemption if reinvesting, gets excess TDS refunded. (6) DTAA: rental income and capital gains may also be taxable in country of residence. DTAA between India and NRI country provides tax credit for India tax paid — avoiding full double taxation.

NRI home loan options in India 2026: Eligible banks: SBI (SBI NRI Home Loan), HDFC (HDFC NRI Home Loan), ICICI (ICICI NRI Home Loan), Axis Bank, Bank of Baroda, and most scheduled commercial banks. Eligibility: NRI or OCI, age 21-65, stable foreign income (salaried or self-employed). Minimum employment abroad: 1-2 years. Loan amount: up to Rs5-20 crore depending on bank. LTV: up to 80% of property value (similar to resident). Interest rate: NRI home loan rates are typically 0.25-0.50% higher than resident rates. Example: resident rate 8.75%, NRI rate 9.0-9.25%. Repayment: EMI via NRO or NRE account (both permitted). Or through fresh NRI remittance from abroad. Loan tenure: up to 20-30 years depending on bank and remaining working years abroad. Documentation: passport, OCI/PIO card, overseas employment contract or 2 years foreign tax returns (for self-employed), foreign bank statements (6-12 months), Indian address proof, property documents. POA: most banks require NRI to either visit India for loan signing or execute POA for an authorised representative. Video KYC available at some banks for initial documentation.