Purchasing a residential property in India for NRIs

July 26, 2023
Purchasing a residential property in India for NRIs

Introduction: Purchasing a residential property in India for NRIs

With India being an attractive destination for Non-Resident Indians (NRIs) to invest in residential properties, many are considering owning a piece of real estate in their homeland. However, purchasing property in India as an NRI involves certain regulations, processes, and considerations. 

In this comprehensive guide, we will explore the key aspects of Purchasing a residential property in India for NRIs, NRIs need to know when buying residential property in India.

Understanding NRI Status and Eligibility

Before diving into the property market, NRIs must understand their status and eligibility criteria. An NRI is an Indian citizen who resides outside India for employment, business, or other purposes, as specified by the Foreign Exchange Management Act (FEMA). Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs) also come under the NRI category.

RBI Regulations and Permissions

NRI property transactions are governed by the Reserve Bank of India (RBI). It’s crucial to know the RBI regulations and permissions on buying residential properties. These regulations govern aspects such as the number of properties an NRI can own, the type of property purchased, and the mode of payment for transactions.

NRI property buying guidelines from the RBI

  • NRIs purchasing property in India must adhere to guidelines set by the Reserve Bank of India (RBI).
  • The RBI governs the number of properties NRIs can own in India and the types of properties they are eligible to buy.
  • NRIs must conduct property transactions in Indian Rupees through their NRE/NRO bank accounts.
  • The repatriation of funds from property sales is subject to certain restrictions outlined by the RBI.
  • Staying informed about these guidelines ensures a smooth and compliant property-buying process for NRIs.

 Property types that NRIs can purchase

NRIs can invest in various residential properties in India. From apartments and villas to plots of land, the choices are vast. Understanding the differences and benefits of each property type is crucial to making an informed decision.

 Investing in real estate research

Conducting thorough research into India’s real estate market is vital before making investment decisions. Factors like property prices, market trends, and future prospects should be analyzed. Additionally, consulting with local real estate experts can provide valuable insights.

 Choosing the Right Location

The location of the property plays a significant role in determining its value and return on investment. NRIs must consider factors such as proximity to essential amenities, transportation, safety, and potential for development when selecting an ideal location.

Performing legal due diligence is of important to avoid any legal complications in the future. NRIs must ensure that all property documents are verified, and that the property has a clear title. Seeking assistance from a qualified lawyer can facilitate a smooth transaction.

 Financing options for NRIs

Foreign residents in India have various financing options available to them for purchasing residential properties in India. Understanding the interest rates, loan eligibility criteria, and repayment terms from different financial institutions can help you in making the right financial choice.

NRI property purchases in India and their tax implications

NRIs should know the tax implications of owning residential property in India. Understanding the tax laws in both India and their country of residence will help NRIs plan their investments more effectively.

  • NRIs buying property in India are liable to pay stamp duty and registration charges on the property purchase.
    If an NRI decides to sell the property, they may be subject to capital gains tax based on the property’s appreciation value.
  • Rental income earned from the property is also taxable for NRIs.
  • NRIs should be aware of the Double Taxation Avoidance Agreement (DTAA) between India and their country of residence to avoid double taxation.
  • Seeking advice from tax experts is essential to understand and comply with Indian tax laws.

 NRI-Friendly Developers and Projects

Choosing a reputable and NRI-friendly developer is crucial for a hassle-free property-buying experience. Researching the developer’s track record, customer reviews, and after-sales services can help NRIs make an informed decision.

 Property registration and documentation

Property registration in India involves legal formalities. NRIs should be well-informed about the required documents, registration fees, and the role of the sub registrar’s office in the process.

Documents required for NRI to buy property in India

  •  Valid passport and visa: NRIs need to provide a valid passport with a minimum six-month validity and a valid visa for their stay in the foreign country.
  •  Overseas address proof: NRIs must submit proof of their overseas residence, such as utility bills or bank statements.
  •  PAN card: NRIs should have a Permanent Account Number (PAN) card issued by the Indian Income Tax Department.
  •  Passport-sized photographs: Recent passport-sized photographs are required for the property purchase process.
  •  KYC documents: Know Your Customer (KYC) documents, including proof of identity and address, are essential for verification.
  •  Power of Attorney: NRIs may need to furnish a Power of Attorney to a trusted representative for property transactions in India.

 NRI Property Management Services

For NRIs who do not plan to reside on the property, hiring a reliable property management service can be beneficial. These services ensure the property is well-maintained, and rental income is managed efficiently.

 Understanding the repatriation process

NRIs may need to repatriate funds related to property transactions, such as rental income or sale proceeds. Knowing the repatriation process and the documents required is essential to avoid complications.


Purchasing a residential property in India for NRIs. However, it is essential to approach the process with caution and due diligence. By understanding the regulations, conducting thorough research, and seeking expert advice, NRIs can make informed decisions and secure their dream home in India.


1. In India, can NRIs acquire agricultural land?

A. No, NRIs are not allowed to purchase agricultural land in India, except in certain cases with RBI’s permission.

2. Are there any restrictions on NRI properties in India?

A. As per RBI regulations, NRIs can own unlimited residential properties in India.

3. Can NRIs get home loans in India?

A. Yes, various financial institutions offer home loans to NRIs for purchasing residential properties in India, subject to specific terms and conditions.

4. NRIs must physically be present during property registration?

A. No, NRIs can authorize someone through a Power of Attorney to represent them during the property registration process.

5. What are the tax benefits available to NRIs on property investments in India?

A. NRIs can avail of tax benefits on home loans, similar to resident Indians, and can also claim deductions on property taxes and home loan interest. However, tax laws are subject to change, so consult a tax expert. 

6. How many residential properties is an NRI allowed to purchase in India?

A. As per RBI guidelines, NRIs can purchase residential properties in India. NRIs can buy as many residential properties as they desire.

7. Does TDS have to be paid by NRIs when they buy properties?

A. Yes, NRIs must pay TDS (Tax Deducted at Source) on buying property in India. The TDS rate is generally 1% of the property’s value for properties over a certain threshold.

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