Want to Buy a Property in India? Here’s Help for NRIs.

POSTED BY: NRI Legal World | 24 July - 2018

Want to Buy a Property in India? Here’s Help for NRIs.

Non-residents often get puzzled about how to make a property investment in India. As they are unaware of the rules and methods related to buying a property in India, they tend to get worried about the results of such investments.

But, RBI regulations for NRIs buying a property in India are actually easy and it does not require any prior permission from the authorities. The rules for property related matters fall under the provision of Foreign Exchange Management Act (FEMA).

Here is the study of the laws applicable on NRIs and the procedure to a buy property in India:

  • Provision valid for NRIs

RBI has issued a report that grants the general permission to NRIs who want to purchase certain immovable property in India. So, Indian Citizens who became NRIs, as per FEMA guidelines, can acquire certain immovable property in India without specific permission from RBI.

  • Types of properties where NRIs can invest

However, RBI has given general permission to NRIs to buy immovable properties in India, but this doesn’t mean they can acquire any or every property in India. They are only allowed to buy commercial or residential property. They are not eligible to acquire any agricultural land or plantation property or farmhouse in India, except in case of inheritance.

  • Funding the Purchase by NRIs

NRIs that have Non-Resident External (NRE) or Non-Resident Ordinary (NRO) bank accounts are eligible to purchase property in India by issuing checks from such accounts. The money for the purchase of the properties has to be transferred only through these bank accounts to complete the purchase process. NRIs can also use Foreign Currency Non-resident (FCNR) accounts for the investment.

  • Home Loans for NRIs

Under the general permission granted by RBI, banks and housing finance companies registered with National Housing Bank can offer loans to NRIs for investing in residential properties in India. The repayment of the loan should be in Indian rupee. Still, according to the regulations, the loan amount can’t be straightaway credited in the NRI bank account, it needs to be disbursed to either the real estate developer’s or the seller’s account.

Moreover, NRIs can also take loans against deposits kept in their FCNR or NRE account up to an amount of INR 1 crore for home loans.

  • Issuing a POA

If an NRI is buying an under-construction property, the real estate executives may ask for Power for Attorney in support of them. This is not something new and it would not speed up or ease your documentation process. The role of POA is to execute contracts, deeds as well as mortgage, lease or even sell the property on behalf of the NRIs. So you need to choose a trustworthy person or a reliable legal firm like NRI Legal World who have expert lawyers and help NRIs in preparing POA, Wills, and resolving administrative issues, etc.

Moreover, the POA must be signed by the NRI in the presence of a notary or Consulate Officer in the country of his residence. Once you send the POA document to India, the POA holder will have to sign all the relevant documents within the three months from the date of handing over the power at the Registrar’s Office. In this way, the POA is legally given to the concerned person.

  • Tax implications for NRIs

Whenever an NRI sells his/her property in India, TDS (tax deducted at source) of 20.6% is deducted on long-term capital gains and for short-term capital gains, 30.9% is deducted. Yet, the final taxation for NRIs is similar to Indian citizens.  If an NRI is applicable for lower tax slab, he/she can apply for a refund of the TDS by filing income tax return.


So from the above-mentioned points, it becomes clear that buying a residential or commercial property in India for NRIs is not very challenging.

However, in some situations, you may require legal advice from an expert. Feel free to contact NRI Legal World, a one-stop solution for all your legal and administrative issues. We help NRIs buy property in India and take care of all the paperwork on their behalf. Call at: +91 85-85-85-71-71 or email at info@nrilegalworld.com for a free legal consult.

Related Article: How NRIs Can Protect their Indian Property from Illegal Possession?

By : NRI Legal World

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