NRIs buying property in India: what is allowed

Who is an NRI under these rules

The RBI defines a Non-resident Indian as “a person resident outside India who is a citizen of India”. An OCI cardholder is a foreign citizen of Indian origin and has the same property rights as an NRI, as the OCI Services FAQ states (purchase or sale of immovable property other than agricultural land, farmhouse or plantation property). Note that FEMA residence (used here) is not the same as tax residence under section 6 of the Income-tax Act, 2025. A Canadian permanent resident who holds an Indian passport is an NRI for FEMA; whether the same person is a non-resident for income tax depends on days spent in India.

What you may do

The RBI’s Master Direction (para 3) and FAQ set out these routes:

• Purchase. An NRI or OCI can buy any immovable property other than agricultural land, plantation property or a farmhouse (para 3.1.1). Residential and commercial property are both open.
• Gift. You may receive a gift from a resident, or from an NRI or OCI who is a “relative” as defined in section 2(77) of the Companies Act, 2013 (para 3.1.2).
• Inheritance. You may inherit any immovable property from a person resident in India or from a person resident outside India (paras 3.1.3 and 3.1.4). The RBI FAQ lists inheritance as covering any immovable property, which includes agricultural land.
• Sale. You may sell a property to a resident. For property other than agricultural land you may also sell to an NRI or an OCI. Agricultural land can be sold only to a resident (FAQ, question 1).
• Joint purchase with a foreign-resident spouse. A spouse who is neither an NRI nor an OCI may acquire one property (not agricultural) jointly with the NRI or OCI spouse. The marriage must have been registered and have lasted at least two years (para 4.3).

How to pay

The Master Direction says an NRI or OCI may pay “out of funds received in India” through banking channels, by inward remittance or by debit to an NRE, FCNR(B) or NRO account. Payment “cannot be made either by traveller’s cheque or by foreign currency notes”. The choice of account matters later, when you sell and want to send money abroad: see paying for property from NRE and NRO accounts and repatriating sale proceeds.

Tax points on a purchase

These rules are central and apply everywhere:

• TDS when the seller is a resident. Section 393(1), Table Sl. No. 3(i) of the Income-tax Act, 2025 requires the buyer to deduct 1% of the higher of the consideration and the stamp duty value, when that value is ₹50 lakh or more. The payer is “any person”, so an NRI buyer is covered. The old form 26QB is replaced by Form 141, Schedule B, filed with a PAN login. See TDS on property purchase.
• PAN. Section 397(2) of the Act sets a minimum 20% deduction where the person entitled to the payment has no PAN. Get a PAN before you sign.
• GST. A flat in an under-construction project attracts GST on the agreement price; see GST on under-construction property.

What differs by state

The general steps are in buying a home in India. If you cannot attend the registration in person, read power of attorney from abroad.

Which professional to consult

A property lawyer (advocate) enrolled with the State Bar Council can read the title documents and the agreement; see property lawyer. A registered valuer gives a value opinion (registered valuer). Your authorised dealer bank handles the foreign exchange side. A chartered accountant can advise on Indian and Canadian tax.