NRI Buying Property in India — Complete FEMA, Tax & Legal Guide (2026)

By CA Mayank Wadhera (CA | CS | CMA | IBBI Registered Valuer) Founder, MKW Advisors | Legal Suvidha | DigiComply

Last Updated: March 2026

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Buying property in India while living abroad is one of the most significant financial decisions an NRI can make. Whether you are planning for retirement, building a rental income stream, or simply maintaining roots back home, the process involves navigating a complex web of FEMA regulations, income tax provisions, banking requirements, and state-level property laws.

This guide covers every aspect of the property purchase journey for NRIs, OCIs, and PIOs — from what you can legally buy, how to pay for it, the tax implications at every stage, and the compliance requirements that cannot be overlooked. Every section reflects the regulatory position as of March 2026, including the changes introduced by Union Budget 2026.

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Table of Contents

1. Who Qualifies as an NRI for Property Purchase
2. What NRIs Can and Cannot Buy in India
3. OCI and PIO Rules for Immovable Property
4. Foreign Nationals — Restricted Categories
5. Payment Rules — How NRIs Must Pay for Property
6. Home Loans for NRIs from Indian Banks
7. Power of Attorney — GPA vs SPA
8. TDS on Purchase from an NRI Seller
9. Budget 2026 Update — TAN No Longer Required for Buyers
10. Stamp Duty and Registration
11. Joint Purchase with a Resident Spouse
12. RERA Protection for NRIs Buying Under-Construction Property
13. Rental Income Taxation for NRIs
14. Capital Gains When an NRI Sells Property
15. Repatriation of Sale Proceeds — Form 15CA/15CB
16. FEMA Compliance and RBI Reporting
17. Common Mistakes NRIs Must Avoid
18. Step-by-Step Checklist for NRI Property Purchase
19. FAQs — NRI Buying Property in India

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Who Qualifies as an NRI for Property Purchase

For property purchase purposes, the definition of "NRI" follows the Foreign Exchange Management Act (FEMA), 1999 — not the Income Tax Act. Under FEMA, an NRI is an Indian citizen who resides outside India. A Person of Indian Origin (PIO) is a foreign citizen who held an Indian passport at any time, or whose parents or grandparents were Indian citizens.

Since 2015, the PIO category has been merged into the Overseas Citizen of India (OCI) cardholder category. For all practical purposes related to immovable property in India, OCI cardholders are treated at par with NRIs — with one critical exception discussed below.

Key Distinction: The Income Tax Act definition of NRI (based on 182 days of stay) determines your tax treatment on rental income and capital gains. The FEMA definition (based on intention and purpose of stay outside India) determines what property you can buy and how you can pay for it.

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What NRIs Can and Cannot Buy in India

Under Regulation 4 of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 read with the original FEMA (Acquisition and Transfer of Immovable Property in India) Regulations, an NRI is permitted to purchase the following types of immovable property in India:

Allowed

• Residential property — flats, apartments, independent houses, villas, builder floors
• Commercial property — office spaces, shops, commercial plots, warehouses, industrial units

There is no limit on the number of residential or commercial properties an NRI can purchase. You can buy one property or twenty — FEMA places no cap on acquisition.

Not Allowed

• Agricultural land
• Farmhouse
• Plantation property

This restriction applies regardless of the state where the property is located. An NRI cannot purchase agricultural land even if they intend to convert it to residential or commercial use after purchase. The restriction is on the nature of the land at the time of acquisition.

The only exception: An NRI can acquire agricultural land, farmhouse, or plantation property through inheritance from a person resident in India. They can also receive such property as a gift from a relative who is an Indian resident, an NRI, or an OCI cardholder. However, they cannot purchase it through a sale transaction.

Practical Tip: Many NRIs are offered "farmhouse plots" on the outskirts of cities. Before committing, verify the land classification in revenue records. If the land is classified as agricultural in the land revenue records, an NRI cannot purchase it — regardless of what the developer calls it.

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OCI and PIO Rules for Immovable Property

OCI cardholders enjoy the same rights as NRIs when it comes to purchasing immovable property in India:

• Can buy: Residential and commercial property
• Cannot buy: Agricultural land, farmhouse, plantation property

The acquisition rules, payment channels, and tax treatment are identical to those applicable to NRIs. OCI cardholders can also take home loans from Indian banks and hold property jointly with Indian residents.

Important: An OCI cardholder can receive agricultural land through inheritance but cannot receive it as a gift. This is a subtle but critical difference from the NRI position.

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Foreign Nationals — Restricted Categories

A foreign national who is not an NRI or OCI cardholder faces significant restrictions. Under FEMA, a foreign national of non-Indian origin can acquire immovable property in India only if:

1. They are a resident of India (living and working in India on a valid visa)
2. They acquire the property for residential purposes and with RBI approval in specific cases

Foreign nationals who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan face additional restrictions and generally require specific RBI approval before acquiring any immovable property.

Foreign-owned companies and entities registered outside India are governed by separate FDI regulations and cannot freely acquire immovable property.

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Payment Rules — How NRIs Must Pay for Property

This is where many NRI property transactions go wrong. FEMA imposes strict rules on how the purchase consideration must be paid:

Permitted Payment Methods

Strictly Prohibited

• Cash payments — No part of the purchase consideration can be paid in cash
• Foreign currency — You cannot hand over US dollars, British pounds, or any foreign currency to the seller
• Traveller's cheques — Not permitted for property transactions
• Third-party payments — Payment must come from the NRI buyer's own account (not a friend's or relative's account abroad)

Every rupee of the purchase price must flow through banking channels. This is non-negotiable. Any deviation is a FEMA violation that can attract penalties up to three times the amount involved.

Critical Warning: Some sellers or agents may ask you to pay a portion "in cash" or "in dollars." Refuse outright. Apart from being a FEMA violation, such transactions create problems during future sale, repatriation, and income tax assessment.

Documentation Trail

Maintain clear records of:

• Bank statements showing the source of funds
• Remittance certificates for inward transfers
• Foreign Inward Remittance Certificates (FIRCs) for all transfers from abroad
• NRE/NRO/FCNR account statements for the relevant period

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Home Loans for NRIs from Indian Banks

NRIs are eligible for home loans from Indian banks and housing finance companies. Several major banks — SBI, HDFC, ICICI Bank, Axis Bank, Bank of Baroda, and others — have dedicated NRI home loan programs.

Key Parameters (2026)

Documents Typically Required

Identity and Status:

• Valid Indian passport and visa copy of the country of residence
• OCI/PIO card (if applicable)
• Proof of overseas address

Income and Employment:

• Employment contract or appointment letter from foreign employer
• Last 6 months' salary slips
• Last 2-3 years' income tax returns (Indian and/or foreign)
• Bank statements for the last 6-12 months (overseas and Indian)
• For self-employed NRIs: business registration, audited financials, CA certificate

Property Documents:

• Sale agreement or allotment letter
• Title documents and chain of title
• Approved building plan and occupation certificate (for completed properties)
• RERA registration certificate (for under-construction properties)
• Property valuation report

Tax Benefits on Home Loan

NRIs are eligible for the same income tax deductions as residents:

• Section 24(b): Deduction of up to INR 2 lakh per year on interest paid for a self-occupied property. No limit on interest deduction for let-out property (subject to set-off restrictions).
• Section 80C: Deduction of up to INR 1.5 lakh per year on principal repayment.

These deductions are available only if the NRI files an income tax return in India.

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Power of Attorney — GPA vs SPA

Since NRIs cannot always be physically present in India for every step of the property purchase, executing a Power of Attorney (PoA) is common practice.

General Power of Attorney (GPA)

A GPA grants broad authority to the attorney (the person you appoint) to act on your behalf across a wide range of matters. For property transactions, a GPA might authorize the attorney to negotiate price, execute agreements, make payments, appear before the sub-registrar, and handle all documentation.

Risk: A GPA gives extensive powers. If misused, the consequences can be severe. Property frauds through misuse of GPA are among the most common real estate disputes in India.

Special Power of Attorney (SPA)

An SPA is limited to specific acts — for example, authorizing someone to execute the sale deed for a particular property, at a specific price, with a named seller. The scope is narrow and defined.

Recommendation: Always use an SPA for property transactions. Define the specific property (with survey number, address, and area), the specific transaction, the price range, and the timeline. This protects you from misuse.

Registration Requirements

• If executed in India: The PoA must be executed on appropriate stamp paper and registered at the sub-registrar's office.
• If executed outside India: The PoA must be notarized by a notary public in the country of residence, then authenticated/apostilled (for Hague Convention countries) or attested by the Indian Embassy/Consulate. Upon receipt in India, it must be adjudicated for stamp duty within the prescribed timeframe (usually 3 months).

Important Update: Following the Supreme Court judgment in Suraj Lamp & Industries vs State of Haryana, a GPA cannot be used as a mode of transfer of property. A GPA only authorizes someone to act on your behalf — it does not transfer ownership. The actual sale deed must be executed and registered.

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TDS on Purchase from an NRI Seller

When you are buying property from an NRI seller (as opposed to a resident seller), special TDS obligations apply under Section 195 of the Income Tax Act.

Buyer's Obligations

If the seller is an NRI, the buyer must:

1. Deduct TDS at 20% of the total sale consideration for long-term capital gains (property held for more than 2 years). For short-term capital gains (property held for 2 years or less), TDS is deducted at applicable slab rates, which could be up to 30%.
2. Deposit the TDS with the government within 30 days from the end of the month in which the deduction was made.
3. Issue Form 16A (TDS certificate) to the NRI seller within 15 days from the due date of filing the TDS return.
4. File quarterly TDS returns in Form 27Q.

The 20% TDS Problem — and the Section 197 Solution

Deducting TDS at 20% of the sale price (not the capital gain) often results in a TDS amount that far exceeds the actual tax liability. For example, if an NRI sells property worth INR 1 crore that was purchased for INR 70 lakh, the capital gain might be INR 10-15 lakh after indexation. But TDS at 20% of sale price would be INR 20 lakh — far more than the actual tax.

Solution: The NRI seller should apply for a Lower Deduction Certificate under Section 197 from the Assessing Officer. This certificate specifies a lower TDS rate or amount based on the estimated actual tax liability. As a buyer, you should insist that the NRI seller obtains this certificate before completing the transaction. It protects both parties.

Contrast with Resident Seller

When buying from a resident Indian seller, TDS under Section 194-IA is only 1% of the sale consideration (for properties exceeding INR 50 lakh). The difference is substantial — and it is a common point of confusion.

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Budget 2026 Update — TAN No Longer Required for Buyers

One of the notable procedural simplifications introduced in Union Budget 2026 is the removal of the mandatory requirement for buyers to obtain a Tax Deduction Account Number (TAN) when deducting TDS on property purchases.

What Changed

Previously, any buyer who was required to deduct TDS on a property transaction (whether under Section 194-IA for resident sellers or Section 195 for NRI sellers) needed to first obtain a TAN. This added a bureaucratic step that could delay transactions, particularly for individual buyers unfamiliar with the process.

From the assessment year applicable to Budget 2026 provisions, buyers can now use their PAN (Permanent Account Number) directly for TDS deduction and deposit on property transactions. The TDS payment can be made using Form 26QB (for purchases from residents) or the corresponding challan for Section 195 deductions, using only the buyer's PAN.

Practical Impact for NRI Transactions

This change is particularly helpful in NRI-to-NRI transactions or when an NRI is buying from another NRI. Earlier, the buying NRI had to obtain a TAN in India — a process that required physical paperwork or an authorized representative. Now, the process is streamlined:

1. Deduct TDS at the applicable rate
2. Deposit using PAN-based challan
3. File the TDS return
4. Issue Form 16A to the seller

No separate TAN application is needed.

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Stamp Duty and Registration

NRIs Pay the Same as Residents

There is no separate or additional stamp duty for NRIs. You pay the same stamp duty and registration charges as any Indian resident purchasing property in the same state and locality.

Stamp Duty Varies by State

Stamp duty is a state subject and varies significantly:

Note: Several states offer concessions for female buyers (typically 1-2% lower stamp duty). If buying jointly with a spouse, having the wife as the first holder can result in stamp duty savings.

Payment of Stamp Duty

Stamp duty must be paid through banking channels — demand draft, pay order, or online payment. Some states now mandate e-stamping. NRIs can pay stamp duty from their NRE or NRO account.

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Joint Purchase with a Resident Spouse

NRIs are permitted to purchase property jointly with a resident Indian spouse. This is one of the most common arrangements and is fully compliant with FEMA, provided:

1. The NRI's share of the payment comes from NRE/NRO/FCNR account or inward remittance
2. The resident spouse's share comes from their own resident bank account
3. Source of funds for both parties is clearly documented

Benefits of Joint Ownership

• Stamp duty savings: In states offering concessions for female buyers, having the wife as the first holder (with a larger ownership share) can reduce stamp duty
• Tax efficiency: Rental income can be split in proportion to ownership, potentially resulting in lower overall tax
• Succession planning: Joint ownership with right of survivorship simplifies property transfer
• Home loan eligibility: Joint application with a working spouse can increase loan eligibility

Important Consideration

The resident spouse can contribute from their own funds without any FEMA implications. However, if the NRI is funding the entire purchase and adding the spouse as a co-owner, it could be treated as a gift from the NRI to the resident. While gifts between spouses are not taxable, the clubbing provisions under Section 64 of the Income Tax Act would apply — meaning any income from the gifted share would be taxed in the hands of the NRI.

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RERA Protection for NRIs Buying Under-Construction Property

The Real Estate (Regulation and Development) Act, 2016 (RERA) provides significant protection to all property buyers, including NRIs. If you are purchasing an under-construction property, RERA offers the following safeguards:

Key Protections

1. Mandatory Registration: Every real estate project (above a specified size threshold) must be registered with the state RERA authority before advertising or selling. No developer can sell without RERA registration.

2. Project Timeline Guarantee: The developer must complete the project within the timeline disclosed at registration. Delays beyond the committed date entitle the buyer to interest on the amount paid or a full refund with interest.

3. 70% Escrow Rule: Developers must deposit at least 70% of the amount collected from buyers in a separate escrow account, to be used only for construction of that specific project. This prevents fund diversion.

4. Carpet Area Clarity: The developer must sell on the basis of carpet area (not super built-up area), and any variation in area beyond a permitted threshold entitles the buyer to a proportionate refund.

5. Defect Liability: The developer is liable for structural defects or deficiency in workmanship for a period of 5 years from the date of possession. Rectification must be done within 30 days of a complaint, at no cost to the buyer.

6. Complaint Mechanism: NRIs can file complaints with the state RERA authority or the RERA appellate tribunal. Many states allow online complaint filing, making it accessible from abroad.

NRI-Specific RERA Tips

• Verify RERA registration on the state RERA website before making any payment. Cross-check the registration number, project details, and completion timeline.
• Read the RERA-registered agreement carefully. Developers cannot deviate from the model agreement format prescribed by RERA.
• Appoint a reliable local representative to inspect construction progress, attend RERA meetings if needed, and manage documentation.
• Keep all payment receipts and correspondence — these are critical evidence in any RERA complaint.

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Rental Income Taxation for NRIs

If your property in India is let out, the rental income is taxable in India. The tax treatment for NRIs is largely similar to that for residents, with some differences in TDS and filing requirements.

How Rental Income Is Taxed

1. Gross Annual Value (GAV): The higher of actual rent received or fair rental value
2. Less: Municipal taxes actually paid by the owner during the year
3. Less: Standard deduction of 30% of Net Annual Value (automatic, no documentation needed)
4. Less: Interest on home loan (Section 24(b) deduction, no limit for let-out property)
5. = Taxable Income from House Property

This taxable income is then added to the NRI's total Indian income and taxed at applicable slab rates.

TDS on Rent Paid to NRI

Under Section 195, any person (tenant) paying rent to an NRI landlord is required to deduct TDS at 30% plus applicable surcharge and cess on the rent amount before making the payment. This is a significant rate, and NRIs often find that the TDS deducted exceeds their actual tax liability.

Solution: The NRI landlord can apply for a Lower Deduction Certificate under Section 197 to reduce the TDS rate based on estimated actual income and tax liability.

DTAA Benefits

If you are a tax resident of a country with which India has a Double Taxation Avoidance Agreement (DTAA), you can claim credit for the tax paid in India against your tax liability in the country of residence. This prevents double taxation of the same rental income.

Common DTAA countries: USA, UK, Canada, Australia, UAE, Singapore, Germany, and many others.

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Capital Gains When an NRI Sells Property

When an NRI eventually sells property in India, the capital gains are taxable in India. The tax treatment depends on the holding period.

Short-Term Capital Gains (STCG)

• Holding period: Less than or equal to 2 years
• Computation: Sale price minus cost of acquisition minus improvement cost minus transfer expenses
• Tax rate: Added to total income and taxed at applicable slab rates (up to 30% plus surcharge and cess)

Long-Term Capital Gains (LTCG)

• Holding period: More than 2 years
• Computation: Sale price minus indexed cost of acquisition minus indexed cost of improvement minus transfer expenses
• Tax rate: 12.5% (without indexation benefit, as per the revised regime applicable from AY 2025-26 onwards)

Exemptions Available to NRIs

NRIs can claim the following exemptions to reduce or eliminate capital gains tax:

TDS on Sale by NRI

The buyer is required to deduct TDS at 12.5% for LTCG or at slab rates for STCG from the sale consideration. As discussed earlier, a Section 197 certificate can bring this down to the actual tax liability.

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Repatriation of Sale Proceeds — Form 15CA/15CB

One of the most important aspects of NRI property ownership is the ability to repatriate (send abroad) the sale proceeds when you eventually sell the property. This is governed by FEMA and requires specific compliance.

Repatriation Limits

• Property purchased in foreign exchange (through NRE account or inward remittance): Sale proceeds are freely repatriable, subject to the condition that the amount repatriated does not exceed the foreign exchange originally brought into India for the purchase. Any amount above this (representing capital appreciation) can be repatriated up to USD 1 million per financial year out of NRO account balances.

• Property purchased from NRO account (Indian income sources): Sale proceeds are credited to NRO account. Repatriation is permitted up to USD 1 million per financial year under the RBI's liberalized remittance scheme for NRO accounts.

• Inherited property: Sale proceeds can be repatriated up to USD 1 million per financial year.

Forms 15CA and 15CB

Before remitting funds abroad from the sale of property, the following compliance steps are mandatory:

Form 15CB — A certificate issued by a Chartered Accountant certifying:

• The nature of the remittance
• The tax liability on the transaction
• That all applicable taxes have been paid or provided for
• DTAA applicability, if any
• The amount eligible for remittance

Form 15CA — An online declaration filed by the remitter (the NRI or their bank) on the Income Tax e-filing portal. This form has four parts (A, B, C, D), and the applicable part depends on the amount of remittance and whether a CA certificate (Form 15CB) is required.

For property sale proceeds, Form 15CB from a CA is mandatory, and the corresponding Form 15CA Part C must be filed online before the bank processes the remittance.

Documents Required for Repatriation

• Sale deed (registered)
• Purchase deed (original, showing source of funds)
• CA certificate in Form 15CB
• Form 15CA acknowledgment
• ITR acknowledgment showing capital gains reported and tax paid
• TDS certificates (Form 16A)
• Bank statements showing receipt of sale proceeds in NRO account
• Proof of tax payment (challans)

Planning Ahead: If your expected sale proceeds exceed USD 1 million, plan the repatriation across two financial years to stay within the annual limit. Alternatively, consult a CA to explore whether the NRE purchase route allows higher repatriation.

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FEMA Compliance and RBI Reporting

No RBI Reporting Required for Purchase

Under current FEMA regulations, an NRI purchasing residential or commercial property in India is not required to report the acquisition to the Reserve Bank of India. This is a general permission under FEMA — no prior approval or post-purchase reporting is needed, provided:

1. The property is residential or commercial (not agricultural)
2. Payment is made through permitted banking channels (NRE/NRO/FCNR/inward remittance)
3. The buyer is a valid NRI or OCI cardholder

Note on the "2 property" reference: Under the earlier FEMA regulations, there was a limit of 2 residential properties for certain categories. Under the current FEMA (Non-Debt Instruments) Rules, 2019, there is no explicit limit on the number of residential or commercial properties an NRI can acquire. However, for the purpose of repatriation of sale proceeds, the original purchase funding source and documentation become important. Maintaining clean documentation for each property is essential.

Compliance Checklist

• Ensure NRI/OCI status is valid at the time of purchase
• Use only permitted payment channels
• Retain FIRCs, bank statements, and remittance proof
• File Indian income tax returns if you have taxable income from the property (rental income, capital gains)
• Comply with TDS provisions if applicable
• Maintain property documents in a safe, accessible location

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Common Mistakes NRIs Must Avoid

Years of advising NRI clients on property transactions have revealed a pattern of recurring mistakes. Avoiding these can save you from penalties, litigation, and financial loss.

1. Paying Any Portion in Cash

This is the single most common and most damaging mistake. Any cash component in a property transaction is a FEMA violation (penalty up to 3x the amount), an Income Tax violation (Section 269SS/269T, penalty equal to the cash amount), and potentially a PMLA (anti-money laundering) violation. There is no safe way to make cash payments in a property transaction as an NRI.

2. Not Converting Funds to NRO Before Purchase

If you have Indian income (from earlier employment, FDs, or other sources) sitting in a resident savings account that was not converted to NRO when you became an NRI, using those funds for a property purchase creates FEMA complications. Convert your resident accounts to NRO status as soon as you become an NRI.

3. Attempting to Buy Agricultural Land

No matter how attractive the deal, NRIs cannot purchase agricultural land. Even if the seller promises "conversion after purchase" or the land is in an area likely to be reclassified, the restriction is on the nature of the land at the time of purchase. Violation can result in the transaction being void and FEMA penalties.

4. Relying on a General Power of Attorney as Title

A GPA is not a valid mode of property transfer. If someone offers to sell you property "through GPA," walk away. Insist on a registered sale deed.

5. Not Verifying Clear Title

Engage an independent lawyer to conduct a title search going back at least 30 years. Check for encumbrances, litigation, pending dues, and proper chain of ownership. Never rely solely on the seller's or builder's lawyer.

6. Ignoring TDS Obligations

If you are buying from an NRI seller and fail to deduct TDS, you become personally liable for the tax amount plus interest and penalties. Ensure compliance before releasing payment.

7. Not Filing Indian Income Tax Returns

If you earn rental income or sell property in India, you must file an Indian income tax return — even if you have no other Indian income. Non-filing can lead to notices, penalties, and complications during repatriation.

8. Overlooking DTAA Benefits

Many NRIs pay tax in India and then again in their country of residence on the same income, simply because they did not claim DTAA benefits. Consult a cross-border tax advisor to optimize your position.

9. Using an Unregistered or Expired Power of Attorney

A PoA executed abroad must be properly notarized, apostilled/attested, and adjudicated in India within the prescribed period. An improperly executed PoA can render the entire transaction voidable.

10. Not Planning Repatriation at the Time of Purchase

The documentation you maintain at the time of purchase directly affects your ability to repatriate sale proceeds later. Keep FIRCs, bank statements, and purchase deeds in perfect order from day one.

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Step-by-Step Checklist for NRI Property Purchase

Use this as your operational guide:

• Confirm your NRI/OCI status under FEMA
• Identify property (residential or commercial only)
• Verify RERA registration (for under-construction property)
• Engage independent lawyer for title verification
• Arrange funds in NRE/NRO/FCNR account or set up inward remittance
• Execute Special Power of Attorney if you cannot be present (notarize, apostille, adjudicate)
• Negotiate and sign Agreement to Sell
• Apply for home loan if needed (allow 4-6 weeks for processing)
• Pay stamp duty and get sale deed drafted
• Execute and register sale deed at sub-registrar's office
• Deduct and deposit TDS if seller is NRI (use PAN, no TAN needed from 2026)
• Obtain possession and occupancy certificate
• Retain all documents — sale deed, payment proof, FIRCs, bank statements, loan sanction letter
• File Indian income tax return reporting the property acquisition
• If renting out, ensure tenant deducts TDS and file returns annually
• When selling, plan capital gains tax and repatriation well in advance

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FAQs — NRI Buying Property in India

1. Can an NRI buy property in India?

Yes. An NRI (Indian citizen residing outside India) can buy any number of residential and commercial properties in India. Agricultural land, farmhouse, and plantation property cannot be purchased — they can only be inherited.

2. Can an OCI cardholder buy property in India?

Yes, OCI cardholders have the same property acquisition rights as NRIs. They can buy residential and commercial property but cannot buy agricultural land, farmhouse, or plantation property. Note: OCIs can inherit agricultural land but cannot receive it as a gift.

3. Can an NRI buy property in India using a foreign bank account?

No. The payment must be routed through proper banking channels — NRE account, NRO account, FCNR account, or inward remittance to India. Direct payment from a foreign bank account to a seller's Indian account without going through NRE/NRO channels is not the prescribed route.

4. Is there a limit on the number of properties an NRI can buy in India?

Under current FEMA (Non-Debt Instruments) Rules, 2019, there is no explicit limit on the number of residential or commercial properties an NRI can purchase.

5. What is the TDS rate when buying property from an NRI seller?

For long-term capital gains (property held over 2 years), TDS is deducted at 12.5% of the sale consideration. For short-term capital gains, TDS is at applicable slab rates (up to 30% plus surcharge and cess). The NRI seller can obtain a Lower Deduction Certificate under Section 197 to reduce the TDS to the actual tax liability.

6. Do I need a TAN to deduct TDS on property purchase in 2026?

No. Union Budget 2026 has removed the mandatory TAN requirement for TDS on property purchases. Buyers can now use their PAN directly for TDS deduction and deposit.

7. Can an NRI take a home loan from an Indian bank?

Yes. Major Indian banks offer home loans to NRIs. The loan-to-value ratio is typically 75-80%, tenure up to 15-25 years, and interest rates range from approximately 8.75% to 10.50%. EMIs must be repaid from an NRE or NRO account.

8. Can an NRI buy property jointly with a resident Indian spouse?

Yes. Joint purchase with a resident Indian spouse is permitted. The NRI's contribution must come from NRE/NRO/FCNR accounts or inward remittance, and the resident spouse's contribution must come from their resident bank account. Clubbing provisions under Section 64 may apply if the NRI is funding the entire purchase.

9. How can an NRI repatriate sale proceeds from property sold in India?

Sale proceeds credited to the NRO account can be repatriated up to USD 1 million per financial year after obtaining a CA certificate in Form 15CB and filing Form 15CA on the income tax portal. All applicable taxes must be paid before repatriation.

10. Does an NRI need to file an income tax return in India for property?

Yes, if the NRI earns any taxable income from the property (rental income) or realizes capital gains on sale, filing an Indian income tax return is mandatory. Even if TDS has been deducted, filing a return is necessary to claim refunds, report income correctly, and maintain compliance.

11. What happens if an NRI becomes a resident Indian after buying property?

There is no impact on property ownership. The property continues in your name. However, your tax treatment changes — you will be taxed as a resident on global income, and the FEMA provisions for NRIs will no longer apply. Your NRE account must be redesignated as a resident account.

12. Can an NRI buy property through an NRI housing scheme?

Several state governments and development authorities offer NRI-specific housing schemes. These are legitimate and often come with simplified processes. However, verify the scheme's credentials, RERA registration, and the developer's track record before investing.

13. Is stamp duty higher for NRIs?

No. NRIs pay the same stamp duty and registration charges as resident Indians in every state. There is no NRI surcharge on stamp duty.

14. What is the penalty for FEMA violation in property purchase?

Under FEMA, the penalty for contravention can be up to three times the sum involved in the violation, or INR 2 lakh where the amount is not quantifiable. Additionally, a daily penalty of INR 5,000 can be imposed for continuing violations.

15. Can an NRI gift property in India to a relative?

Yes. An NRI can gift residential or commercial property in India to a person resident in India, another NRI, or an OCI cardholder. The gift must be made through a registered gift deed. Gift of agricultural land by an NRI is subject to restrictions.

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Expert Guidance for Your NRI Property Transaction

Navigating the intersection of FEMA regulations, income tax provisions, state property laws, and banking requirements demands professional expertise. A single compliance gap can result in penalties, transaction delays, or the inability to repatriate funds when you need them most.

At MKW Advisors, we provide end-to-end advisory for NRI property transactions — from pre-purchase structuring to post-sale repatriation, including:

• FEMA compliance review and structuring
• Title due diligence coordination
• TDS computation and Section 197 certificate assistance
• Capital gains planning and exemption optimization
• Form 15CA/15CB certification for repatriation
• Income tax return filing for NRI property income
• DTAA benefit optimization across jurisdictions

Book a Consultation

Online: Schedule a consultation at mkwadvisors.com/client

WhatsApp: +91-96677 44073 — Send us your query directly

Email: [email protected]

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Disclaimer: This article is for informational purposes and does not constitute legal or tax advice. Tax laws and FEMA regulations are subject to change. Readers are advised to consult a qualified Chartered Accountant or legal professional before making property purchase decisions. The information reflects the regulatory position as understood in March 2026.

Copyright 2026, MKW Advisors. All rights reserved.