Nri guide to buying property in india

Introduction

The Indian real estate market has always been a top investment destination for NRIs (Non-Resident Indians). With the growing demand for housing and commercial spaces, along with favorable policies from the Indian government, it's a great time for NRIs to invest back home. However, buying property in India as an NRI involves specific legalities and procedures. This blog is your complete step-by-step NRI guide to buying property in India — covering eligibility, documentation, financing, and key regulations.

1. Who Can Buy Property in India?

According to RBI (Reserve Bank of India) guidelines, the following categories of NRIs are eligible to purchase immovable property in India:

Indian citizens residing outside India (NRI)
Persons of Indian Origin (PIO) and Overseas Citizens of India (OCI)

What Property Can NRIs Buy?

Residential Property
Commercial Property

**What Property Can NRIs Not Buy?**

Agricultural land
Farmhouses
Plantation property

Note: These require special permissions from the RBI.

2. Documents Required for NRIs to Buy Property in India

Having the correct documents is crucial for smooth property transactions. Here’s what you need:

Valid Indian Passport or OCI/PIO Card
PAN (Permanent Account Number) Card
Overseas address proof
Indian address proof (if available)
Power of Attorney (POA), if you are authorizing someone in India to act on your behalf
Passport-size photographs

3. Funding the Purchase: Payment and Loans

Payment Rules for NRIs:

All transactions must be done in Indian currency (INR).
Payment should be made through banking channels only – no cash is allowed.
You can use:
- NRE (Non-Resident External) Account
- NRO (Non-Resident Ordinary) Account
- FCNR (Foreign Currency Non-Resident) Account

Home Loans for NRIs:

NRIs can avail home loans from Indian banks like HDFC, ICICI, SBI, etc. Requirements include:

Proof of income (salary slips, bank statements)
Good credit history
Loan tenure typically ranges between 5 to 20 years
EMI payment via NRE/NRO account

4. Power of Attorney (POA)

If you cannot travel to India for the registration or legal formalities, you can assign Power of Attorney to a trusted relative, lawyer, or associate. This allows them to:

Register the property
Sign legal documents
Handle loan paperwork on your behalf

Make sure the POA is notarized and attested by the Indian Embassy or Consulate in your country.

5. Legal Due Diligence

NRIs must perform proper due diligence before making any property investment. Here’s what you should verify:

Property title and ownership documents
Encumbrance certificate (to ensure no legal dues)
Approvals from local municipal authorities
Check for any litigation or disputes on the property
Builder’s reputation, RERA registration (for under-construction projects)

It is highly recommended to hire a property lawyer for verification.

6. Registration Stamp Duty

After finalizing the property, it must be registered with the Sub-Registrar of Assurances in India. You’ll need:

Sale deed
Buyer seller ID proofs
PAN card
Payment receipts

Stamp Duty and Registration Charges vary by state but typically range from 5% to 8% of the property value.

7. Tax Implications for NRIs

Here’s what NRIs need to know:

NRIs must pay TDS (Tax Deducted at Source) at 20% on the purchase of property (if the property is worth more than ₹50 lakhs).
Rental income from Indian property is taxable in India.
Capital gains tax applies if the property is sold in the future.

You should also file an Income Tax Return (ITR) in India annually if you earn from Indian property.

8. Repatriation of Funds

NRIs can repatriate the sale proceeds of their Indian property, subject to certain conditions:

Property must be purchased using foreign exchange
Repatriation is limited to $1 million per financial year
Proper documentation and certification from a Chartered Accountant is needed

9. Key Tips for NRIs Before Buying Property

Always invest in RERA-registered projects to avoid fraud.
Visit the property at least once before finalizing.
Stay updated on changing RBI and FEMA regulations.
Compare property prices across different cities and builders.
Seek professional help from real estate consultants and lawyers.

Conclusion

Buying property in India as an NRI is a rewarding long-term investment, but it requires careful planning and understanding of the legal and financial process. From selecting the right property to handling legal compliance and taxes, every step matters.