NRI Real Estate
An NRI's Practical Guide to Buying Property in India
The rules are simpler than most NRIs assume — the execution is harder. This is the sequence we take clients through.
99Habitat Editorial · 25 Aug 2026 · 7 min read
In short
NRIs and OCIs may buy residential and commercial property in India without approval, but not agricultural land, plantations or farmhouses. Payment must move through banking channels (NRE, NRO or FCNR accounts), sale proceeds attract capital gains tax and TDS, and repatriation is permitted within the limits set by the Reserve Bank of India — so the exit should be planned at the time of purchase.
What you may and may not own
An NRI or OCI can acquire residential and commercial property in India freely, without any special permission. The restriction is narrow but absolute: agricultural land, plantation property and farmhouses cannot be purchased, though they can be inherited.
This single distinction causes more aborted transactions than any other. Land that is marketed as a 'villa plot' may still be classified as agricultural in revenue records, and conversion may be incomplete. The classification in the record, not the brochure, decides whether you can legally buy.
How the money must move
Payment has to travel through normal banking channels — an inward remittance, or funds held in an NRE, NRO or FCNR account. Cash and traveller's cheques are not permitted, and third-party payments create problems later when you try to establish the source of funds for repatriation.
Keep the paper trail intact from the first instalment. The bank statements that show how the property was funded are the same documents your chartered accountant will need years later when you sell.
Tax and repatriation on exit
On sale, gains are taxed as short- or long-term capital gains depending on the holding period, and the buyer is obliged to deduct tax at source. Because TDS on an NRI seller is deducted on the sale value rather than the gain, most sellers should apply for a lower-deduction certificate before completing the transaction rather than waiting for a refund.
Repatriation of sale proceeds is permitted within the annual limits prescribed by the Reserve Bank of India, supported by the appropriate certification from a chartered accountant. Sequence matters: the certificate, then the remittance.
What actually goes wrong
In our experience, the failures are procedural, not financial. A power of attorney drafted too narrowly to complete registration. A builder demand letter paid from the wrong account. Possession accepted before the occupancy certificate is issued.
For a buyer sitting in Dubai, London or Singapore, the value of representation is not negotiation alone — it is having someone physically present who verifies each of these before money moves.
References
This article is general information, not investment, tax or legal advice. Rules change — confirm current requirements with qualified counsel before you transact.
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