What are the Rules for NRIs to Buy a Property in India?

NRIs can buy property in India, but there are some rules attached to the process. So those who are looking for buying a property in India should be aware of the regulations that govern the acquisition and sale of real estate before finalising any estate. 

Here is a list of all the regulations to help you: 

FEMA Rules


Foreign Exchange Management Act for NRI


All the real estate transactions fall under the purview of the Foreign Exchange Management Act (FEMA) The investors need not seek any permissions from the Reserve Bank of India. The RBI has permitted the NRIs to buy any residential or commercial property in India. There are no restrictions on the number of real estate properties an NRI wishes to purchase. 


The Indian Real Estate Market

The social infrastructure in most of the cosmopolitan Indian cities has improved. Top cities of India (Like Pune & Hyderabad) have ramped up their civil infrastructural development. It has given an immense rise in the standard of living with more hospitals, schools and shopping malls coming up and improving the connectivity.

An NRI can purchase the property, either as a single owner or jointly, with any other Non-Resident of India. The developers in India are offering good deals and benefits such as flexible payment plans and subvention schemes

Nature Of Property


FEMA & RBI rules and regulations for NRI


NRIs living in Singapore, Hong Kong, Sri Lanka, Bhutan, China, Thailand, Indonesia, etc. find India as one of the attractive options to make real estate investments.

It's a smart move, as the FEMA & RBI rules and regulations are too flexible and allow an easy flow of investments coming from NRIs. NRI Investors can buy all sorts of immovable properties in India other than agricultural land, farmhouses and plantation properties (Rules are different). 


Related Post -How can NRIs Buy Property in India?

Details of Documents

For all those who are planning to invest can rejoice. The best part is that not every document is needed. You'll need a valid passport, address proof, a Permanent Account Number (PAN card) and a recent photograph. 

Power Of Attorney

As the NRI does not reside in India, they can choose anyone from their relatives, colleagues, friends or trustworthy people. Make that person as a POA (Power of Attorney) for your rescue. In case, the NRI is not able to come to India to carry out any legal transactions. All the documents about the purchase can be executed hassle-free in the buyer's absence. The legal transactions can be handled on your behalf by your POA.

Click here to know more about NRI investment in Pune India.


Power Of Attorney - NRI investment

Tax Benefits

NRIs and residents of India have different tax systems and rules to follow. NRIs who buy a 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 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.


Related Post - Dos and Don’ts for NRI’s investing in Indian Realty


Loan Procedure

The RBI has granted permission to banks and housing finance institutions registered with the National Housing Bank to provide home loans for NRIs to buy real estate property in India. All the essential transactions have to be made in Indian currency. The loan cannot be credited directly to the bank account of an NRI. It will be disbursed to either the seller's or the developer's bank account directly.

The loan can be repaid using funds in an NRI's NRO(Non-Residential Ordinary) / NRE(Non-Resident External) account or FCNR (Fixed Deposit Foreign Currency account) deposits. Traveller's cheques or foreign currency is not an acceptable means of payment.

Home loan procedure for NRI

Repatriation Of Funds

There are specific guidelines for the repatriation of funds for the NRIs for the sale of immovable property in India. The property has to be purchased concerning FEMA guidelines. The amount repatriated cannot exceed the original amount paid for the property.

In the case of a residential property, repatriation of sale proceeds is restricted to less than or equal to two properties. Citizens of Pakistan, Bangladesh, Thailand, Singapore, Sri Lanka, Hong Kong, Indonesia, China, Afghanistan and Iran must seek specific approval from the RBI for repatriation of sale proceeds.


Related Post - FAQs for NRIs Investing In Indian Property



Young couple signing financial contrat on digital tablet


NRIs should strictly verify points, such as the track record and brand visibility of the developer, the social and civic infrastructure available in the location, the amenities in the project and the timelines for possession, in the case of under-construction projects.

Enquire and read about how NRIs can invest in Indian real estate to understand all the legal requirements.


Note: All the information has been sourced from femaonline.com

Disclaimer: Information has been edited for easy understanding of readers. 



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