How to purchase immovable property in India? A guide for NRIs
- Learn about the restrictions that apply to NRI buying property in India
- Understand the key steps involved in the process
- Understand the applicable tax implications
13 mins read
The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of May 15, 2026 basis the Union budget 2026-2027 and as per Income Tax Act, 2025 updates.
Purchasing an immovable property in India presents an opportunity for a Non-Resident Indian (NRI) and Overseas Citizen of India (OCI), to own real estate, make investments, etc. The process of acquiring property in India can be intricate and demands a comprehensive understanding of the steps involved. This article will guide you through crucial steps for you to make informed decisions ensuring your investment journey is a smooth and successful one.
The key steps involved in the purchasing of immovable property by an NRI/OCI in India include:
- Understanding the eligibility and restrictions applicable
- Identifying a suitable property and conducting due diligence
- Carrying out the valuation of the property
- Finalising the sale/transfer documents
- Payment of stamp duty
- Payment of consideration to the seller
- Registration of the property
- Getting relevant land records updated to reflect your name as the new owner of the property
Below are points you may consider with respect to some of the aforementioned steps:
1. Eligibility and restrictions: As an NRI/OCI, there are certain conditions with respect to the types of immovable property you may purchase in India as per the prevailing Foreign Exchange Management Act (FEMA) regulations*. In this regard, we encourage you to seek an expert’s guidance. An NRI can also buy property in India jointly with a resident Indian or another NRI, but they must adhere to certain conditions and regulations.
You may also refer to the table below, which broadly sets out the eligibility criteria, conditions and property types regarding NRIs buying property in India:
Please note, tables are best viewed on desktops or in landscape mode on mobile phones. On mobile phones, please swipe to view all content.
| Status | Eligibility/Conditions | Number of Properties |
|---|---|---|
| NRI and OCI | NRIs and OCIs can buy any immovable property (residential and commercial) other than agricultural land, plantation property and farmhouses in India. | There is no restriction on the number of permitted immovable properties (residential and commercial) that you can purchase in your own name. |
| A foreign citizen who is a spouse to an NRI/OCI | Foreign national resident outside India, can acquire one immovable property (other than agricultural land/ farm house/ plantation property) jointly with spouse who is NRI or OCI, subject to below conditions:
| May acquire one immovable property (residential and commercial) other than plantation property, agricultural land and farmhouse in India jointly with his/her NRI or OCI spouse. |
Note: Prohibition on acquisition of immovable property in India by citizens of certain countries:
However, one may note that, citizens of following countries are restricted from acquiring immovable property in India.
Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong or Democratic People’s Republic of Korea (DPRK) shall acquire immovable property in India, only after obtaining prior permission of RBI.
Subject to the applicable laws (including FEMA and rules and regulations thereunder), you may choose to retain, sell, transfer, or gift your immovable property in consultation with your legal and financial advisors. You can transfer (whether by sale, gift, or through Will) the immovable property purchased by you to an Indian resident or another NRI or an OCI. Keep in mind that in case the transfer is by way of a gift, the beneficiary should be a relative as defined in section 2(77) of the Companies Act, 2013**.
For more information on the key legal aspects to consider while selling real estate, read this article.
*Foreign Exchange Management (Non-Debt Instruments) Rules, 2019
**Relative is defined under section 2 (77) of the Companies Act, 2013 to mean with reference to any person, any one who is related to another, if (i) they are members of a Hindu Undivided Family, (ii) they are husband and wife, (iii) one person is related to another in such manner as prescribed under rule 4 of the Companies (Specification of definitions details) Rules, 2014.
2. Identification and due diligence: After identification of the property, it would be prudent to appoint a local lawyer who is well-versed in the subject matter to undertake a property due diligence exercise. This is to verify and ensure that, with respect to such identified property:
- All the necessary approvals, certificates, authorisations and permits are in place.
- The right, title and interest in relation to the property are in the possession of the seller and there are no encumbrances to such property.
- All payments required to be made by the seller in terms of the bills, dues and taxes have been duly made.
- There is no action that adversely affects the interest or right of the seller in the shortlisted property.
- If the property is purchased from member of the society, then obtain the NOC from society.
3. Valuation: You could undertake the valuation of the property through a qualified professional to ascertain the true market value of the property so that you do not pay a higher amount for the purchase. Additionally, the valuation would also help in calculating the appropriate stamp duty and registration charges.
4. Finalising the transfer documents, payment of stamp duty and registration:
- Documentation: Depending on the agreement between the buyer (you) and the seller, the parties may decide to first execute the agreement to sale, followed by the sale deed, or directly sign the sale deed/deed of conveyance. The transfer documents should include details of the parties to the transaction, a description of the property and other terms and conditions (commercial, legal and statutory).
The key differences between the two are:
Please note, tables are best viewed on desktops or in landscape mode on mobile phones. On mobile phones, please swipe to view all content.
| Agreement to sale | Sale deed/Deed of conveyance |
|---|---|
‘Buyer’ and the ‘seller’ enter into an agreement in relation to the transfer of ownership at a future date subject to the fulfilment of certain terms and conditions. | Property ownership is transferred from the seller to the buyer pursuant to the terms agreed between them in an agreement to sale or directly in this document. |
Precedes the execution of the sale deed. | Primary document is needed if no agreement to sale is executed. |
Does not in itself effect the transfer of ownership and must be followed by an execution of the sale deed/deed of conveyance. | Effects the transfer and acts as a buyer’s title document in relation to the property purchased. |
- Stamp Duty: Applicable stamp duty would be required to be paid on the relevant transfer document prior to its signing. Do note that the rate of stamp duty depends on various factors such as the location of the property, the relevant state-specific stamp act, the value of the property, and the amount paid as per the agreement.
- Registration: The Registration Act, 1908 inter-alia requires that any instrument which creates, declares, or assigns any right, title, or interest of the value of ₹100 and upwards, to or in immovable property, then registration of such document is compulsory. Therefore, you will have to register the transfer/sale documents with the relevant sub-registrar of assurances, to pay registration fees which may vary as per the applicable state-specific registration act.
You may consider granting a Power of Attorney (PoA) to an Indian resident if you are unable to be physically present in India to sign the transfer documents and undertake other formalities.
5. Payment: The payment for the purchase of immovable property can be made by an NRI/OCI in the following manner:
Please note, tables are best viewed on desktops or in landscape mode on mobile phones. On mobile phones, please swipe to view all content.
| Status | Modes of payment |
|---|---|
NRI and OCI | Currently, FEMA provides the following in relation to the payment of consideration for purchase of immovable property: a) Payment should be made from the funds received in India through banking channels by way of inward remittance from any place outside India; or b) Payment should be made from funds held in NRE account/NRO account/Foreign Currency Non-Resident Bank (FCNR (B)) account; and c) Payment cannot be made either by traveller’s cheque, foreign currency notes, or any other mode except as specified above |
Foreign citizen who is a spouse to an NRI/OCI | Same as above |
Subject to the applicable laws, you can seek a housing loan from an authorised dealer bank or housing finance institution in India* to acquire residential property in the country.
Additionally, an authorised dealer bank in India may grant a rupee loan to you, among others, against the security of immovable property (other than agricultural or plantation land or farmhouse) in accordance with the prevailing laws and conditions stipulated thereunder for meeting your personal requirements or for your own business purposes. Such immovable property can also be a property in India which is designated for commercial use.
*Provided that such institution is approved by National Housing Bank
Tax Implications
According to the laws, income tax (TDS) on property purchased by NRI is generally applicable in the same way as to resident Indians. Please note:
Property Purchase from Resident Seller:
- While purchasing a property worth more than ₹50 lakhs from a tax resident in India, you must deduct Tax Deducted at Source (TDS) at the rate of 1% of such sale consideration or the stamp duty value of such property, whichever is higher.
- Buyer is required to deduct TDS on every occasion of making payment to the Resident Seller and deposit the TDS amount with the Tax Department. The TDS on the immovable property has to be paid via challan cum return in Form 141 (erstwhile Form 26QB) within 30 days from the end of the month in which TDS was deducted
- In case of Joint ownership of property, ₹50 lakhs threshold applies to the total consideration paid for the property, irrespective of the individuals share of buyers or sellers
- In case the property has been purchased by NRI’s in a joint name, then both the joint owners have to deduct and pay the TDS as per the respective share of contribution made by them for purchase of property
Property Purchase from Non-Resident Seller
- If the property is purchased from a non-resident, The buyer has to apply and get a Tax Deduction and Collection Account Number (TAN). The Tax Department has now granted relaxation to resident individual buyers from obtaining a TAN, with a view to reducing their compliance burden. However, this relaxation has not been extended to non-resident buyers.
- TDS is deducted at 12.5% with an additional surcharge and cess as applicable n case the period of holding of the seller is more than 24 months. In case the period of holding of the seller is less than 24 months then the TDS is deducted at the maximum rate i.e., 30% with an additional surcharge and cess as applicable. Buyer is required to deduct TDS on every occasion of making payment to the NRI Seller and deposit the TDS amount with the Tax Department by the 7th day of the next month in which the payment is made to the Seller except for the month of March, for which the due date is April 30. Thereafter the buyer shall require to file the TDS return in Form 144 (erstwhile Form 27Q) within one month from the end of the quarter except for the quarter ending on March, for which the due date is May 31.
Rental Income on Property
- Further, any income generated from the property located in India is also subject to tax. So, if you let out the property, the rental income earned will be taxable after considering the standard deduction of 30% and the municipal taxes paid, if any. In case of any interest paid on loan borrowed for purchase of such property, the same can also be set-off against the rental income and balance net rental income will be subject to tax. Such net rental income will be taxed accordingly to the income tax slabs as applicable to the NRI.
- To read more about tax implications and repatriation rules for NRI, click here. If you face taxation for the same income in your resident country and India, check whether your country has signed a Double Taxation Avoidance Agreement (DTAA) with India. You may be able to avail benefits as per DTAA. It is advisable to consult a tax and legal professional to ensure complete understanding and compliance with the regulations.
Conclusion
The prospect of investing in Indian real estate is undoubtedly appealing. However, it necessitates a meticulous approach, adhering to the eligibility criteria and navigating the legal complexities. By understanding the key steps involved, conducting thorough due diligence and following documentation requirements, you can make legally compliant acquisitions, ensuring that your property investment in India yields fruitful results.
Disclaimer:
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