NRI Property Investment in India: Rules, Tax and Repatriation
Short answer: NRIs can buy any residential or commercial property in India without RBI approval, but not agricultural land, plantations or farmhouses. The complications are operational — TDS, repatriation limits, power of attorney and dual-country taxation.
Annual repatriation limit per financial year
USD 1M
LTCG rate on property
12.5%
TDS on resident purchase above ₹50L
1%
Residential properties repatriable on sale
2
What the data says
Purchase must be funded through NRE, NRO or FCNR accounts or inward remittance — cash and foreign-currency payment are not permitted.
Sale proceeds of up to two residential properties are repatriable, within the USD 1 million per financial year limit from NRO balances.
Buyers purchasing from an NRI must deduct TDS at the applicable higher rate, which frequently trips up transactions at closing.
A properly executed, apostilled and registered power of attorney is essential where the NRI cannot attend registration in person.
How EstateVeda executes this
Structure funding through the correct account type before any payment is made.
Execute and register a specific-purpose POA, avoiding broad general powers.
Apply for a lower or nil TDS certificate before sale where the actual gain is smaller than the deduction implies.
Coordinate DTAA relief between India and the country of residence to avoid double taxation.
Risks we underwrite against
Generic general POAs create fraud exposure and are frequently misused.
Failing to obtain a lower-deduction certificate locks up substantial capital until the return is processed.
Buying agricultural land or a farmhouse is not permitted and cannot be regularised afterwards.
EstateVeda verdict
NRI purchase is straightforward on rules and difficult on execution. Get the account structure, POA and TDS certificate right before the transaction, not after.
Frequently asked questions
Can an NRI buy property in India?
Yes — any residential or commercial property, without RBI approval. Agricultural land, plantation property and farmhouses cannot be purchased, only inherited.
How much can an NRI repatriate from a property sale?
Up to USD 1 million per financial year from NRO balances, with sale proceeds of up to two residential properties eligible subject to conditions and tax clearance.
What TDS applies when an NRI sells property?
The buyer must deduct TDS at the rate applicable to non-residents on the sale consideration. NRIs can apply for a lower or nil deduction certificate where the actual gain is lower.