TheNRIGuide — Your Complete Guide to Life as an NRI

India remains one of the most attractive real estate markets for NRIs, driven by strong returns in metro cities, emotional ties to the homeland, and a desire to maintain a foothold for eventual return. In 2026, Budget 2026 removed the TAN requirement for NRI property transactions, simplifying the process. But important FEMA rules still govern what NRIs can and cannot buy.

Can NRIs Buy Property in India?

Yes. Under the Foreign Exchange Management Act (FEMA), NRIs have an automatic right to purchase certain types of immovable property in India — no prior RBI approval required.

What Property Can NRIs Buy?

NRIs CAN purchase:

Residential apartments and houses
Commercial properties (offices, shops, retail spaces)
Plots approved for residential or commercial construction
Under-construction properties from RERA-registered developers

NRIs CANNOT purchase (without RBI special permission):

Agricultural land
Plantation properties (tea, coffee, rubber estates)
Farmhouses

Inherited agricultural land: Can be held but sale proceeds are non-repatriable — they must stay in India.

OCI cardholders have the same property rights as NRIs under FEMA.

Budget 2026 Change: No More TAN for NRI Property Transactions

From April 1, 2026, NRIs and OCI cardholders no longer need a Tax Deduction Account Number (TAN) for property transactions. PAN-based TDS payment via Form 26QB is now sufficient — the same simplified process used for resident Indian property transactions.

This removes 2–4 weeks of delay previously caused by TAN registration.

TDS on NRI Property Purchase

When an Indian resident buys property from an NRI seller, TDS is mandatory under Section 195 of the Income Tax Act:

| Type of Gain | TDS Rate (2026) | |---|---| | Long-term capital gains (held >2 years) | 12.5% of full sale consideration | | Short-term capital gains (held ≤2 years) | 30% of full sale consideration | | Health and Education Cess | Additional 4% |

TDS applies to the full sale consideration, not just the profit. NRIs who believe actual tax will be less can apply for a Lower Deduction Certificate under Section 197 — file 30–60 days before the transaction.

Repatriation of Sale Proceeds

From NRO account (property purchased using NRO funds or inherited):

Repatriable up to USD 1 million per financial year (April–March)
Requires Form 15CA + Form 15CB (Chartered Accountant certificate)
Maximum 2 residential properties can be repatriated at the NRE-equivalent limit

From NRE account (property purchased using NRE funds):

Fully repatriable without the USD 1 million limit

Step-by-Step Guide to Buying Property as an NRI

Step 1: Obtain a PAN Card

Mandatory for property transactions above ₹50 lakh and for TDS compliance. Apply online via NSDL or UTI portals from abroad.

Step 2: Open NRE or NRO Bank Account

All payments must flow through NRE (foreign earnings, fully repatriable) or NRO (India-sourced income, repatriation limited to USD 1M/year) accounts.

Step 3: Due Diligence

Title search: Verify clear, marketable title (hire independent lawyer)
Encumbrance certificate: No loans or claims on the property
RERA registration: Mandatory for under-construction projects — verify at state RERA portal
Approved building plan: Construction as per municipal approval
Khata records: Critical in South Indian cities like Bengaluru

Step 4: Sign Agreement to Sale

Typically 10% advance/token payment
Specifies price, payment schedule, possession date, penalty clauses
NRIs can sign via Power of Attorney (PoA), apostilled/notarized signature abroad, or in-person during a visit

Step 5: Home Loan (If Needed)

NRIs are eligible for home loans from Indian banks:

Loan amount: Up to 80% of property value
Tenure: Up to 20–25 years
EMI paid from NRE/NRO account
Interest rates (2026): ~8.5%–10% per annum

Major NRI home loan lenders: SBI, HDFC Ltd, ICICI Bank, Axis Bank, PNB Housing Finance

Step 6: Register the Sale Deed

Execute and register the Sale Deed at the Sub-Registrar office:

Pay stamp duty (2%–8% depending on state)
Pay registration fees (0.5%–1%)
NRI can appear in person or through PoA holder

Stamp duty in major cities (2026):

Mumbai: 5% (men), 4% (women) + 1% metro cess
Delhi: 6% (men), 4% (women)
Bengaluru: 5.6%
Hyderabad: 4%
Chennai: 7%

Step 7: Mutation of Property Records

After registration, get property mutated in municipality records to establish new ownership for civic purposes.

Capital Gains Tax When NRIs Sell Property

| Holding Period | Tax Type | Rate | |---|---|---| | More than 24 months | LTCG | 12.5% (no indexation — changed in Budget 2024) | | 24 months or less | STCG | Income tax slab rate |

Budget 2024 change: Indexation benefit removed for LTCG on property. NRIs now pay 12.5% flat on property held over 2 years.

Cost of Improvement: Renovation costs added to cost basis reduce taxable gains — keep all invoices.

NRI Property Rental Income

30% standard deduction from rental income (irrespective of actual expenses)
Net rental income taxed at NRI slab rates (20%–30% under new tax regime)
TDS by tenant: If annual rent exceeds ₹2.4 lakh, tenant must deduct TDS at 30%
Rental income credited to NRO account; repatriable within USD 1M annual limit

Tips for Buying Remotely

Hire an independent local lawyer (not the developer's lawyer) for title verification
RERA check is non-negotiable for under-construction property
Video walkthroughs before payment
Avoid cash components: Illegal and puts your remittance documentation at risk
Draft a specific limited PoA (not general) to minimize risk

Frequently Asked Questions

Q: Can an NRI buy property jointly with a resident Indian?

Yes. Joint ownership with a resident Indian family member is common and helps with local administration.

Q: Can an NRI buy property in India without visiting India?

Yes. Through a registered Power of Attorney granted to a trusted family member or legal representative, the entire process can be completed remotely.

Q: Is TDS applicable when an NRI buys property from a resident Indian?

No. When an NRI buys from a resident, standard Section 194IA applies (1% TDS for property above ₹50 lakh), deducted by the NRI buyer.

Q: How many properties can an NRI own in India?

No limit. NRIs can own any number of residential and commercial properties. Repatriation limits apply to proceeds sent abroad, not to ownership.

Q: Can an NRI inherit agricultural land in India?

Yes. Agricultural land can be inherited but not purchased. Sale proceeds from inherited agricultural land are non-repatriable.

Q: What is RERA and why is it important for NRI buyers?

RERA (Real Estate Regulatory Authority) regulates the real estate sector in India. For NRIs buying under-construction property, RERA registration ensures the developer is accountable for delays and specifications. Never buy unregistered under-construction projects.

NRI Buying Property in India: Complete Step-by-Step Guide 2026