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What you can buy
Residential and commercial property, paid for through normal banking channels (NRE / NRO / FCNR or inward remittance). Joint ownership with another NRI / OCI or a resident relative is permitted under standard FEMA rules.
Short answer. NRIs and OCIs can freely buy residential and commercial property in India. Agricultural land, plantation property and farmhouses cannot be purchased — they can only be acquired by inheritance, and even then with FEMA conditions on resale and remittance. Check the applicable rules and documentation before acting.
Last reviewed: · Reviewed by Regi Tom Antony, FCA
Residential and commercial property, paid for through normal banking channels (NRE / NRO / FCNR or inward remittance). Joint ownership with another NRI / OCI or a resident relative is permitted under standard FEMA rules.
Agricultural land, plantation property and farmhouses are off-limits for purchase by NRIs and OCIs. They can only be received by inheritance from a person who was eligible to hold them.
When an NRI / OCI sells Indian property, the buyer is required to deduct TDS at higher rates than for resident sellers. A Section 197 lower-deduction certificate is often the right tool to avoid over-withholding.
Sale proceeds normally route through NRO and follow the USD 1 million per year framework. Properties acquired in foreign currency on a repatriable basis can have proceeds repatriated more freely, capped at the original investment for up to two residential properties.
The purchase price must come through normal banking channels — inward remittance or NRE, FCNR or NRO funds. Payment by traveller's cheques or foreign currency notes is not allowed. Home loans from Indian banks are permitted, repaid from NRE or NRO accounts or by remittance. How you pay now decides how much of the sale proceeds you can later take out of India.
NRIs and OCIs can receive residential or commercial property as a gift from a relative who is resident in India or is another NRI or OCI. A gift from a relative is exempt from income tax, though stamp duty applies to the gift deed. Agricultural land, plantations and farmhouses cannot be received by gift — only by inheritance.
Rent from Indian property is Indian-source income credited to NRO, and a tenant paying rent to a non-resident must deduct tax under Section 195. The standard 30% deduction for repairs applies to rental income, and home-loan interest is deductible within the statutory limits. On sale, the buyer deducts TDS on the sale value, which a Section 197 certificate can reduce to tax on the actual gain.
If your situation involves money already moving, a sale already agreed, or a deadline already in your inbox, advisory only helps if it comes in early. Common situations we help with:
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