NRI Real Estate in India

Here's everything you need to know about buying, owning, and selling property in India as an NRI.

You can buy any number of residential properties in India. Flats, independent houses, penthouses, studio apartments — all fair game. No limit on how many.

You can buy commercial properties too. Office spaces, retail shops, warehouses, co-working units. Again, no cap on the number.

You can also buy one residential plot. Just one. The land needs to be in an urban area, and you must construct a house on it within five years. If you don't build, you need RBI approval to keep holding it.

Here's what this means for you: if you want to park money in Indian real estate, buy built properties or buy one plot and actually build on it.

Agricultural land is off-limits. Farmhouses are off-limits. Plantation property is off-limits.

This is a hard legal restriction under FEMA (Foreign Exchange Management Act). No exceptions, no RBI approvals, no loopholes.

If your uncle calls and says he found a "heritage farmhouse" outside Lonavala for a steal, you cannot legally buy it. If you somehow do, the transaction is void and you'll face penalties.

What about that mango plantation in Ratnagiri your college friend is selling? Also no.

Here's the thing: Indian law treats NRIs exactly like foreigners when it comes to agricultural property. The government wants to prevent foreign ownership of farming land.

You need a PAN (Permanent Account Number) to buy property in India. Not "advisable" — mandatory.

Every property registration office will ask for it. Every bank processing your home loan will ask for it. The Income Tax Department will reject your TDS filings without it.

If you don't have a PAN yet, apply online at https://www.incometax.gov.in/iec/foportal/. Use Form 49AA (the NRI version). You'll need your passport, a foreign address proof, and a photograph. Processing takes 15-20 days.

If you already have a PAN from your resident days but your address is outdated, update it using the same portal. This matters because all tax notices will go to your registered PAN address.

So what does this mean for you? Get your PAN sorted before you even start property hunting. It's the first blocker you'll hit.

You cannot hand over a suitcase of cash. You cannot wire money from your Bank of America account directly to the seller. You cannot use hawala.

You must pay from one of these three accounts:

NRE Account (Non-Resident External): This is your tax-free foreign income account in India. You fund it by transferring dollars from your US/UK/UAE salary account. Banks convert it to rupees at the prevailing rate (say, ₹85 per dollar today). Money in this account is freely repatriable — you can move it back out anytime.

NRO Account (Non-Resident Ordinary): This is where your India-earned income sits — rent, dividends, freelance payments from Indian clients. It's taxed in India. You can repatriate up to $1 million per financial year after paying tax, but you need a CA certificate and bank paperwork.

FCNR Account (Foreign Currency Non-Resident): This is a foreign-currency fixed deposit. You keep dollars/pounds/euros in a term deposit with an Indian bank. If you break it to buy property, the bank converts it to rupees. Also fully repatriable.

Most NRIs buying property use NRE accounts because that's where their salary lands and the funds are clean for repatriation later.

Picture this: you're buying a ₹1 crore flat in Hyderabad. You transfer $120,000 from your Chase account to your ICICI NRE account. ICICI converts it at ₹83.33 per dollar (hypothetical rate), credits ₹1 crore to your NRE account. You then wire that ₹1 crore to the builder's account from your NRE account. Transaction complete, fully legal, fully documented.

Here's what this means for you: open an NRE or NRO account before you commit to any deal. ICICI, HDFC, SBI, Axis — all major banks offer these. You can open them online with your passport and visa copy.

Indian banks will lend to you. The process is more paperwork-heavy than for residents, but it's absolutely doable.

Loan-to-Value (LTV) Ratios: Most banks lend up to 80% of the property value if the property costs below ₹75 lakh. For properties above ₹75 lakh, LTV drops to 75%. So if you're buying a ₹1 crore apartment, expect to borrow ₹75 lakh maximum and bring ₹25 lakh as your down payment.

Interest Rates: NRI home loan rates are typically 0.25% to 0.5% higher than resident rates. As of early 2025, expect rates between 9% and 10% depending on the bank and your credit profile. HDFC, SBI, ICICI, Axis, and LIC Housing Finance are the big lenders in this space.

Documentation: You'll need six months of salary slips, bank statements from your foreign account showing salary credits, your employment contract, passport and visa copies, PAN card, and proof of your Indian address (often a relative's address where notices can be sent).

Repayment: You typically repay via auto-debit from your NRE or NRO account. Some banks let you make payments from abroad, but that's rare and involves forex conversion headaches every month.

Tax Benefit: You can claim deduction on both principal (up to ₹1.5 lakh under Section 80C) and interest (up to ₹2 lakh under Section 24) when you file your India tax return. If you have any India-sourced income, this reduces your tax liability.

Now, this is where it gets interesting: if you take a loan, you have skin in the game but you're also leveraging India's real estate appreciation with someone else's money. If Bangalore property appreciates 8% a year and your loan costs 9.5%, you're paying 1.5% net for leverage — but you're holding an appreciating asset and claiming tax deductions. Run the math for your specific situation.

Let's say you're buying a resale flat from another NRI. The seller lives in Dubai, you live in London, and the flat is in Mumbai.

Before you pay the seller, you must deduct 20% TDS (plus applicable surcharge and cess — works out to about 20.8% effective) from the sale price and deposit it with the Income Tax Department.

If the flat costs ₹80 lakh, you deduct ₹16.64 lakh as TDS, pay the seller ₹63.36 lakh, and deposit the ₹16.64 lakh to the government using Form 27Q within 30 days.

If you're buying from a resident Indian seller, TDS is 1% of the sale value (if the property costs more than ₹50 lakh).

If the seller is an NRI and you don't deduct TDS, you're personally liable for the tax, plus interest and penalties. The Income Tax Department will come after you, not the seller.

Here's the exact process: get a TAN (Tax Deduction Account Number) if you don't have one. File Form 27Q online at https://www.tdscpc.gov.in/. Pay the TDS using Challan 26QB. Issue Form 16A (TDS certificate) to the seller within 15 days so they can claim credit when filing their India tax return.

So what does this mean for you? Budget for this. If the deal is ₹80 lakh and the seller is an NRI, you need ₹80 lakh in your account — ₹63.36 lakh goes to the seller, ₹16.64 lakh goes to the tax department. You cannot negotiate the seller down to ₹63.36 lakh and skip TDS. That's tax evasion.

You bought a flat in 2020 for ₹60 lakh. You sell it in 2025 for ₹90 lakh. You have a capital gain of ₹30 lakh. Now the tax bill arrives.

Short-Term Capital Gains (holding period less than 2 years): Taxed at your income tax slab rate. If you're in the 30% bracket, you pay 30% plus surcharge and cess on the ₹30 lakh gain. Works out to about ₹9.36 lakh in tax.

Long-Term Capital Gains (holding period 2 years or more): Taxed at 20% with indexation benefit, or 12.5% without indexation (you pick the lower tax). Indexation adjusts your purchase price for inflation using the Cost Inflation Index published by the Income Tax Department.

Let me put this in perspective with real numbers: you bought in 2020 for ₹60 lakh. The Cost Inflation Index for 2020-21 was 301. For 2025-26, assume it's 363. Your indexed cost becomes ₹60 lakh × (363 ÷ 301) = ₹72.36 lakh. Your taxable gain is ₹90 lakh - ₹72.36 lakh = ₹17.64 lakh. Tax at 20% = ₹3.53 lakh (plus surcharge and cess, roughly ₹3.67 lakh total).

Without indexation, your gain is ₹30 lakh, tax at 12.5% = ₹3.75 lakh. In this case, indexation saves you money.

Exemptions: You can save tax under Section 54 if you reinvest the sale proceeds in another residential property in India within 2 years (or use it to construct within 3 years). You can also invest capital gains in specified bonds (54EC bonds, currently only REC and NHAI) within 6 months to save tax.

Here's the thing: if you sell your Mumbai flat and immediately buy a Pune flat with the proceeds, and file the paperwork correctly, you pay zero capital gains tax. But the Pune property is now locked — if you sell that without reinvesting, the tax comes due.

So what does this mean for you? Plan your exit before you buy. If this is a 3-year flip, you'll pay short-term capital gains tax at slab rates. If you hold for 5+ years and reinvest, you can exit tax-free.

You sold your Bangalore apartment for ₹1.2 crore. The money is sitting in your NRO account. You want to move it to your US bank account. Can you?

Yes, but with a cap: you can repatriate the sale proceeds of up to two residential properties in your lifetime. Not two per year — two total, ever.

For each repatriation, the limit is $1 million per financial year (April to March). If your property sale proceeds exceed $1 million, you'll need to stagger the repatriation across two financial years.

Documents Required: Sale deed, proof that you bought the property with funds from an NRE/NRO account or with funds remitted from abroad, a CA certificate (Form 15CA/15CB) confirming tax compliance, your bank's approval.

Process: Submit the documents to your bank. The bank's compliance team verifies everything, especially that you've paid all applicable capital gains tax. Once cleared, they transfer the funds to your foreign account.

Original Purchase Matters: If you bought the property before you became an NRI (back when you were a resident), you can still repatriate the sale proceeds, but the calculation is trickier. You can only repatriate the appreciated value, not the full amount. The bank will ask for valuation reports.

Picture this: you bought a Delhi flat in 2015 for ₹50 lakh when you lived in India. You became an NRI in 2018. You sell the flat in 2025 for ₹95 lakh. You can repatriate approximately ₹45 lakh (the appreciation), not ₹95 lakh. The ₹50 lakh original capital is considered domestic and typically stays in your NRO account. RBI rules here are complex; get a CA to certify the calculation.

Here's what this means for you: if you plan to buy, hold, and eventually move the money back to your foreign account, buy only two properties max and document everything meticulously from day one.

You're in Toronto, the property registration is in Chennai, and you cannot take two weeks off work. You need a Power of Attorney (PoA).

A PoA lets you authorize someone in India (usually a family member or a lawyer) to sign documents, pay stamp duty, register the property, and collect keys on your behalf.

How to Execute a PoA: Get the PoA document drafted by a lawyer in India (they'll email you the draft). Print it, sign it in front of a Notary Public in Canada (or wherever you are). Get it apostilled (if India and your country of residence are both signatories to the Hague Apostille Convention) or attested by the Indian Consulate. Send the original PoA document by courier to your attorney in India.

Specific vs. General PoA: Use a specific PoA limited to one transaction. "I authorize my brother Ramesh Kumar to purchase Flat 5B in XYZ Apartments, Pune, bearing registration number ABC123, and to execute all related documents." Do not give general PoA that lets someone sell your properties without your consent.

Registrar Acceptance: Some sub-registrar offices in India are picky about accepting PoAs executed abroad. Check with a local lawyer before you finalize the PoA. In Mumbai, Bangalore, and Delhi, apostilled PoAs are routinely accepted. In smaller towns, you might face bureaucratic resistance.

Now, this is where it gets interesting: if the deal is above ₹50 lakh and you want to claim a home loan, some banks insist you be physically present for at least the loan agreement signing. You can use PoA for the property registration but not the loan paperwork. Confirm this with your bank upfront.

Before you pay a single rupee to a builder, verify the project's RERA (Real Estate Regulatory Authority) registration.

Every real estate project in India must be registered with the state RERA. The registration number should be on every advertisement, every brochure, every builder's website.

How to Check: Go to your state's RERA website. Maharashtra is https://maharera.mahaonline.gov.in/. Karnataka is https://rera.karnataka.gov.in/. Search for the project by name or registration number. You'll see the project details, builder details, completion timeline, approved plans, and any complaints filed.

What You're Looking For: Completion date (is it realistic?), builder's track record (do they have other delayed projects?), project financials (are funds being used for this project or diverted?), and legal clearances (does the builder actually own the land?).

If a project is not RERA-registered and the builder gives you excuses ("registration is in process", "we're a small project, exempted"), walk away. Unregistered projects are illegal to sell. If the builder vanishes, you have zero legal recourse.

So what does this mean for you? Spend one hour on the RERA website before you spend ₹25 lakh on a down payment. It's the simplest due diligence that most NRIs skip.

You've decided to buy a 2BHK in a Pune tower. Here's the exact sequence.

Step 1: Finalize the Property
Visit (or send a trusted family member to visit) the site. Check construction quality, location, amenities. Negotiate price with the builder or seller.

Step 2: Verify RERA Registration
Go to https://maharera.mahaonline.gov.in/, search for the project, download the registration certificate. If it's resale, verify the seller's ownership by checking the 7/12 extract (rural property) or property card (urban property) from the local municipal office.

Step 3: Open NRE/NRO Account
If you don't have one, open it now. ICICI and HDFC let you do this entirely online from abroad. You'll upload passport, visa, address proof, and a photograph. Account opens in 7-10 days.

Step 4: Transfer Funds to India
Wire money from your foreign account to your NRE account. The bank will convert dollars to rupees. If you're taking a home loan, transfer only the down payment (20-25% of property value).

Step 5: Apply for Home Loan (If Needed)
Submit loan application to HDFC/ICICI/SBI with salary slips, bank statements, employment letter, passport, PAN. Loan approval takes 2-3 weeks. The bank will value the property and sanction the loan amount.

Step 6: Sign the Sale Agreement
Builder/seller provides the draft agreement. Get a lawyer to review it. Key clauses: possession date, penalty for delay, payment schedule, specifications (fittings, flooring, etc.), and dispute resolution. Sign the agreement. Pay 10-20% of the property value as advance (adjusted against total price later).

Step 7: Execute Power of Attorney (If Not Traveling to India)
Draft PoA, get it notarized and apostilled abroad, courier it to your representative in India.

Step 8: Pay Stamp Duty and Registration Fee
Stamp duty varies by state (4-7% of property value in most states). Registration fee is about 1%. For a ₹1 crore flat in Pune, expect to pay ₹6-7 lakh in stamp duty and registration. Payment happens at the sub-registrar's office on registration day.

Step 9: Deduct TDS (If Seller is NRI)
If the seller is an NRI, deduct 20% TDS before paying the final amount. File Form 27Q and Challan 26QB within 30 days. Issue Form 16A to the seller.

Step 10: Register the Property
Go to the sub-registrar's office (or your PoA holder goes). Submit sale deed, PAN cards of buyer and seller, identity proofs, approved building plan, NOC from society, and stamp duty payment receipt. The registrar will verify, register the property in your name, and hand over the registered sale deed.

Step 11: Update Your Records
Get a copy of the registered sale deed. Update the property tax records with the municipal corporation (now you're responsible for annual property tax). Inform your bank (if you took a loan) that registration is complete; they'll disburse the loan to the builder.

Step 12: Take Possession
Coordinate with the builder to inspect the flat, collect keys, verify that all promised fittings and fixtures are in place. Sign the possession letter.

Step 13: File Your India Tax Return
Even if you have no other India income, owning property makes you liable to file. Use Form ITR-2. Declare the property, claim home loan deductions if applicable, and file by July 31 of the assessment year.

Here's what this means for you: the process takes 2-3 months if everything goes smoothly. Budget an extra month for bureaucratic delays. Start the NRE account and PAN card process at least 60 days before you want to close the deal.

One Final Thing

Indian real estate is not passive. Tenants will call you at 2 AM California time because the geyser stopped working. Society maintenance bills will land in your NRO account every quarter. Property tax notices will arrive at your India address. You need someone on the ground — a family member, a property manager, or a lawyer — to handle the operational chaos.

If you're buying as an investment and you live 8,000 miles away, factor in 5-10% of annual rental income as management cost. If you're buying because your parents need a place to stay, factor in your time and mental bandwidth.

Real estate in India can build serious wealth. It can also become a bureaucratic nightmare if you don't document everything and follow the rules exactly. The government is strict about FEMA compliance, the tax authorities are strict about TDS, and the registration offices are strict about paperwork.

Do it right, and you'll own an appreciating asset in a growing economy. Do it wrong, and you'll spend years trying to repatriate your money while paying penalties.

Now you know what you can buy, how to pay for it, how to finance it, and how to eventually get your money out. The next move is yours.

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