How NRIs Can Buy Property in India — Legal Guide 2026

NRIs often want to invest in Indian real estate — for family use, rental income, or retirement planning. The process is relatively straightforward for residential and commercial property, but comes with important FEMA rules, tax implications, and due diligence requirements. This guide covers everything you need to know about buying property in India as an NRI in 2026.

What Property Can NRIs Buy in India?

Under FEMA (Foreign Exchange Management Act, 1999) and RBI guidelines, NRIs can purchase:

• Residential property (flats, houses) — unlimited number
• Commercial property (shops, offices, warehouses)

NRIs cannot purchase:

• Agricultural land
• Plantation property
• Farmhouse

These restrictions can only be overcome if the agricultural/plantation land is inherited or gifted by a resident Indian family member — purchase by NRIs is not permitted.

How to Pay for Property — FEMA Rules

NRI property purchases must be funded through permissible channels:

• NRE (Non-Resident External) account: Fully repatriable; can be used for purchases. Interest is tax-free in India.
• NRO (Non-Resident Ordinary) account: Repatriation of up to USD 1 million per financial year subject to tax compliance
• FCNR (Foreign Currency Non-Resident) account: Fully repatriable; can be used for purchases
• Home loan from Indian bank (NRI home loan): Available from most major Indian banks and housing finance companies

Not permitted: Payment in foreign currency (cash or wire transfer directly from abroad to seller without going through Indian banking channels), or in traveller’s cheques.

Due Diligence — Critical Steps Before Purchase

Property fraud and title defects are common in India. Thorough due diligence is essential:

• Title search: Examine the chain of ownership for the past 30 years — all sale deeds, partition deeds, mortgage releases
• Encumbrance certificate: Confirms no outstanding mortgages or charges on the property
• Revenue records: Verify the seller’s name is in the current mutation/jamabandi
• Building plan approval: Check that construction is as per the approved plan; unauthorised construction can be demolished
• Occupancy certificate: Verify the building has obtained OC from the local authority
• RERA registration: For under-construction projects, verify RERA registration and check for complaints against the builder
• Litigation check: Search for any cases involving the property or the seller in the local courts

We conduct comprehensive due diligence for NRI property purchases and issue a written legal opinion on the title — the foundation for safe property investment.

Executing the Purchase from Abroad

If you cannot travel to India for the registration:

• Execute a Special Power of Attorney authorising your representative to execute the sale deed and complete registration
• The PoA must be notarised and apostilled in your country, then adjudicated and registered in India
• Ensure the PoA specifically authorises signing of the sale agreement, execution of the sale deed, payment, and registration

TDS on Property Purchase by NRI Buyer

When an NRI buys property from a resident Indian seller:

• TDS at 1% under Section 194IA if the purchase price exceeds ₹50 lakh
• File Form 26QB within 30 days; issue Form 16B to the seller

When an NRI buys from another NRI seller:

• TDS at the applicable capital gains rate (20% LTCG or income tax slab rate for STCG) under Section 195
• More complex — we advise on the exact TDS computation and compliance

Stamp Duty and Registration

Stamp duty and registration charges vary by state. In Punjab and Haryana:

• Stamp duty: 6–7% of circle rate/sale consideration (whichever is higher)
• Registration fee: 1% of consideration
• Registration must occur at the Sub-Registrar’s office in whose jurisdiction the property falls

Registration is mandatory for immovable property transactions above ₹100 — an unregistered sale deed for immovable property above ₹100 is not admissible as evidence of transfer of title.

Frequently Asked Questions

Can I buy property jointly with a resident Indian?
Yes — an NRI can be a joint owner with a resident Indian. The payment rules (NRE/NRO funds) apply to the NRI’s share of the consideration.

Do I need RBI permission to buy property?
No — for residential and commercial property, purchase is under the general permission of FEMA. You do not need prior RBI approval.

I want to buy a plot of land and build a house. Is this permitted?
Yes — purchase of a residential plot and construction thereon is permitted. Agricultural land remains prohibited.

Can I get a home loan as an NRI?
Yes. Most major banks (SBI, HDFC, ICICI, Axis) offer NRI home loans. Loan amount up to ₹10 crore and above is available. Repayment must be made through NRE/NRO accounts.

Need Expert NRI Legal Help?

NRI Legal Consultants is based in Chandigarh and handles NRI matters across Punjab, Haryana, and across all Indian High Courts. We work remotely with clients across USA, UK, Canada, UAE, Australia, Singapore, and Saudi Arabia.

Call / WhatsApp: +91-9501010009
Email: info@nrilegalconsultants.in