Can an NRI Buy Property in India? FEMA Rules, Taxes and Repatriation (2026)
NRIs and OCIs can buy residential or commercial property in India without RBI approval; here is the FEMA framework, TDS rates, repatriation cap and documentation checklist for 2026.
Yes, an NRI or OCI card holder can buy residential and commercial property in India without any approval from the Reserve Bank of India. The permission flows directly from the Foreign Exchange Management Act (FEMA), and you can hold as many such properties as you wish. The two things to get right are what you are buying and how you are funding it; everything else is paperwork.
The headline exception is clear. NRIs and OCIs cannot buy agricultural land, a farm house or plantation property anywhere in India. This applies even in your home state and even if the land is being sold by a close relative. The only legal way to end up owning such land is through inheritance from a resident Indian, which FEMA permits specifically. If a broker or seller suggests a workaround for agricultural land, walk away; the transaction is void and the land can be forfeited.
Funding is the second place deals go wrong. The purchase price must flow from the right source: inward remittance from your country of residence through normal banking channels, debits from your NRE or FCNR (B) account for fully repatriable funds, or debits from your NRO account for non-repatriable funds. Cash payment, foreign currency notes handed over in India and funds routed through third parties are not permitted. Keep every bank advice and foreign inward remittance certificate; you will need them when you eventually sell and repatriate.
All major Indian lenders, SBI, HDFC, ICICI, Axis Bank, Kotak and LIC Housing Finance, offer NRI home loans. Expect loan-to-value of up to 80% on under-construction property and typically 75% on ready inventory, with tenure of 15 to 20 years capped by your retirement age. EMIs must be serviced in Indian rupees from your NRE or NRO account, or by inward remittance; direct repayment from your overseas salary account is not allowed. Pre-approved loans matter in the Camellias, Magnolias and Aralias category of transactions, where sellers close quickly and expect a short money chain.
This is where NRI deals go wrong most often. When a resident sells property, the buyer deducts 1% TDS under Section 194-IA; when an NRI sells, Section 195 kicks in instead and the TDS is roughly 20% on long-term capital gain for holdings over two years, and about 30% on short-term gain, plus applicable surcharge and cess. Critically, the TDS applies to the entire sale consideration, not just the gain, unless the seller obtains a Lower Deduction Certificate from the Income Tax Department under Form 13. We insist on this certificate for every NRI seller we represent; the difference between 20% on the gain versus 20% on the sale price is often a crore or more.
Sale proceeds credited to your NRE account can be repatriated freely without a cap. Proceeds credited to your NRO account, which is the usual case when the original purchase was funded from Indian income, are capped at USD 1 million per financial year across all NRO balances. The repatriation requires Form 15CA filed online by you as the remitter, backed by a Form 15CB chartered accountant certificate confirming taxes have been paid. Plan the sale around a financial year boundary if the value is above the cap; splitting the remittance across two years is routine and fully legal.
Most NRI deals use a Power of Attorney because the buyer cannot be in India for every signature. A Specific POA, naming the exact property, the exact actions and the exact attorney, is far safer than a General POA, which some banks and sub-registrars increasingly refuse. The POA should be executed in your country of residence, attested by the Indian consulate there, and then adjudicated and stamped in India within three months. Give the attorney only the powers you need; do not sign a document that lets a cousin sell any property you own anywhere in India.
Keep a clean set of documents from day one: passport and valid visa or OCI card, PAN card (mandatory, non-negotiable), overseas and Indian address proof, six months of NRE or NRO bank statements, income proof from your employer or audited statements for business, and a notarised Specific POA if someone will sign on your behalf. For the property itself, insist on the mother deed, sanctioned plan, HRERA registration where applicable, the latest property tax receipt and a non-encumbrance certificate. We run every NRI file through our panel lawyer before registration; the small cost upfront saves large problems later.
A few recurring questions. OCI card holders have the same property rights as NRIs under FEMA, so the rules above apply identically. Property received by inheritance can include agricultural land and needs no RBI approval. A gift of residential or commercial property from a close relative, as defined in Section 56 of the Income Tax Act, is permitted and tax free in the recipient's hands. Joint ownership with another NRI, OCI or a resident Indian is allowed, provided the funds come from each co-owner's own permitted sources; a resident co-owner cannot be a mere name on paper funded entirely by the NRI, as that attracts benami implications. If your transaction sits anywhere near these edges, speak to us and your CA before you sign.