NRI's Guide For Purchasing Property In India

Buying a house or investing in real estate has been on the checklist of almost every Indian. India is one of the fastest developing economies, and the aspiration for a better lifestyle is also steadily increasing among the new generation. Luxury homes and lavish apartments are becoming more attainable since the purchasing power of people is growing phenomenally. People are actively investing in real estate properties to seek the long-term benefits that real estate as an investment instrument offers. This NRI guide for purchasing property in India help you to gain knowledge about real estate. 

The residents as well as the Non-Residents of India (NRIs) are continuously looking to purchase and acquire an ideal property in India that yields them the highest benefits. The percentage of NRIs who wish to buy a property in India has significantly increased post the Covid-19 pandemic. According to a survey conducted by Financial Express, almost 71 per cent of NRIs consider investment in the Indian real estate market as one of the best investments, which is higher than the 55 per cent number seen during the pre-Covid edition of the survey. The sentiments of Indians owning their own house in India remain a key reason that prompts the NRIs to buy a property in India along with the reason being that the value of USD is constantly getting stronger against the Indian currency making it an ideal deal for the NRIs to invest in Indian real estate.

As an NRI, one must know the important elements of purchasing a real estate property in India. To help, here is a quick NRI guide for purchasing property in India.

Restrictions for NRIs purchasing property in India

The acquisition and transfer of properties in India are regulated by the Foreign Exchange Management Act 1999 (FEMA). Every NRI can own a property in India and they do not require any specific permits from anyone to do so. However, as per the FEMA and Reserve Bank of India (RBI), there is no limit to the number of properties that an NRI can purchase in India.

But the transactions made for purchasing these properties have to be done in Indian Rupees. The NRIs can use an NRE/NRO or FCNR account for the purpose. The NRIs can purchase any kind of commercial or residential property in India but they are not permitted to buy properties like agricultural lands, plantations, or farmhouses that are directly used for agricultural purposes.

Documents an NRI's needed for to purchase a property.  

NRI Guide For Purchasing Property In India

The crucial documents required to be presented by the NRIs purchasing property or residential properties in India are generally a copy of the Followings

  • Passport and visa or OCI card,
  • Pan card
  • POA certificate
  • Address proof
  • Passport-size photographs.

Power of Attorney

The power of attorney is an important document for the NRIs who want to purchase property in India. The PoA means that you are giving authority to another person to represent you in your absence to take all the important decisions and carry out the further dealings of the property. The specified person in the PoA could be a family member (any blood relative) who can sign the important documents in case you’re not physically present in India. Choosing PoA wisely is crucial as it needs to be someone who you can trust enough to give them the power to take the right decisions on your behalf. Also, PoA is crucial for the smooth purchase and sale of the property, especially if you are buying the property through a home loan since most lenders demand a PoA.

Charges and Taxes to be Paid

NRI's Guide For Purchasing Property In India

When an NRI buys a property in India, taxes including GST, stamp duty charges, and registration fees are to be paid the same as residents of India. The NRI buying a property in India are liable to pay property taxes which are calculated the same as it is calculated for a resident Indian. The property, if rented would be taxed as per the rental income generated from the property. The Indian Income Tax Act offers tax benefits and exemptions to NRIs for tax filing, as per sections such as Section 54, Section 54 EC, and Section 54F, provided they meet the eligibility criteria.

Cities In India That Attracts The Highest NRI Real-Estate Investments

The top states in India that are attracting an increased number of NRIs for buying property are reportedly Bangalore, Mumbai, Chennai, and Pune along with Delhi NCR. The IT hub of India, Bangalore, also referred to as the “Silicon Valley of India” has been grabbing more and more attention from the NRIs due to its rich atmosphere, constant development in the IT sector and top-notch infrastructure. Within India, the economy of Bangalore is growing at a faster pace, and the stability and growth in real estate due to the flourishing IT sector is an added advantage to the NRIs investing in the city.


1. Can an NRI purchase property in India by taking a loan?

Yes, an NRI can take a loan from an Indian bank to buy a real estate property in India. Conditions provided that the loan will be sanctioned in Indian Rupees and has to be repaid in INR as well.

2. What is the process of buying a property in India for an NRI?

The property buying process for Non-Resident Indians is the same as it is for the residents of India. However, there are additional documents like Passport and visa copies that you need to submit while purchasing the property.

3. Can I buy any kind of property in India?

The NRIs can buy any residential or commercial property in India apart from the properties that are used for agricultural practices like agricultural land, plantations, and farmhouses.

4. What factors should NRIs consider, while purchasing a property in India?
  • Location/micro markets- Emerging micro markets in peripheral areas with proposed development like new airports, highways, tech hubs, etc. 
  • Developer- It is always advisable to invest in properties by Established developers with a good delivery track record. Typically, they take care of legal due diligence, compliance, quality of construction, etc. 
  • Configuration- If the purpose is a pure investment, then it’s advisable to invest in rent-worthy configurations. For eg. It's easy to find cohorts for a standard 2 BHK/3 BHK over a larger/luxury property. 
  • Stage of construction- Depending on financial objectives, a decision between ready-to-move-in or under-construction property can be made.

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