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A Complete Guide For NRIs Buying Property In India – Rules, Documents & Tax Tips
Posted by Admin on June, 03, 2025
Can NRIs Buy Property in India?
Yes! Non-Resident Indians (NRIs) are permitted to buy residential and commercial properties in India under the FEMA (Foreign Exchange Management Act). However, they cannot purchase agricultural land, farmhouses, or plantation property, unless it's inherited or specially approved by the RBI.
How NRIs Can Fund Property Purchases
NRIs can use two main sources to fund their property purchase:
- From Abroad: The funds must be routed through an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account via recognized Indian banking channels. It’s essential to keep the transaction records or bank statements as documentary proof—particularly if the NRI plans to repatriate the sale proceeds later.
- From Indian Income: If NRIs already have income in India, they can use their domestic savings account. NRIs are also eligible for home loans from Indian banks and NBFCs, with repayments done via NRE/NRO accounts.
Documents Required for NRIs to Buy Property in India
- Valid Passport or OCI/PIO card
- PAN Card (for taxation purposes)
- Address Proof (Indian and overseas)
- Power of Attorney (PoA) if not present in India
- Passport-sized photographs
Income Tax & TDS Rules for NRIs
- TDS Deduction: 1% if buying from a resident and value exceeds ₹50 lakhs.
- ITR Filing: NRIs should file annual tax returns in India, even if rental income is below taxable limits.
- Home Loan Benefits: 1) Section 80C: Deduction on principal repayment. 2) Section 24(b): Deduction on interest payment
Maintaining a tax history can ease future resale or repatriation processes.
New US Remittance Tax
NRIs residing in the United States are subject to a 3.5% excise tax on funds remitted abroad, which adds to the overall cost of sending money to India for property purchases. This is charged by the US and not claimable in India. NRIs should consider this when transferring funds, and keep records of remittance details.
Important Due Diligence Tips for NRIs
- Choose a RERA-registered and reputed developer
- Verify the property title and check for legal encumbrances
- Make sure the property has all necessary legal approvals and government clearances in place before finalizing the deal.
- Consult a real estate lawyer
Buying a home in India as an NRI is a rewarding decision—whether it’s for investment or returning home in the future. With the right planning, documentation, and guidance from experts like 11squarefeet, NRIs can make smart, safe, and profitable real estate choices.
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