How An NRI Can Purchase A Residential Property In India

Buying residential property in India as an NRI has become one of the most common wealth-diversification moves for the Indian diaspora. The rules are clearer than they used to be, most banks offer NRI-specific home loans, and the rupee still works in your favour when you are earning in dollars, pounds, or dirhams. That said, the paperwork is real, the rules around repatriation have edges you need to understand, and the wrong documentation can hold up registration for months.

This guide covers how an NRI can purchase a residential property in India, laid out as the five practical steps most buyers actually work through: documentation, funding, joint ownership, taxes, and Power of Attorney. Each section is written for the questions NRI buyers keep coming back to, with the current rules under FEMA, the RBI’s Master Directions, and Income Tax Act provisions applicable in 2026.

Step 1 — Documentation: What You Must Have Ready

NRI property purchases hinge on documentation that proves two things: who you are and where your money comes from. Before you sign an agreement to sell, get these in order.

Identity and status proof: A valid Indian passport with visa page, PAN card (mandatory for property registration in India), and your OCI or PIO card if applicable. If you hold a foreign passport, carry both the foreign passport and the OCI card together at registration.

NRO / NRE / FCNR account: Any property transaction must be routed through one of these RBI-approved accounts. Cash payments are not permitted for NRI buyers under FEMA. Your NRE account is the cleanest route if you want the option to repatriate funds later.

Address proof: Recent overseas utility bill, rental agreement, or bank statement showing your foreign address, plus a permanent Indian address (parents’ home, for example) for correspondence with Indian authorities.

Income documents: Last two years of foreign tax returns, salary slips for the last six months, and your employment contract. Banks offering NRI home loans will ask for all three.

Property documents: Title deed, encumbrance certificate for the last 30 years, approved building plan, occupancy certificate for ready-to-move-in, and RERA registration for under-construction. Do not skip the encumbrance check, even if the developer has a strong brand.

Step 2 — Funding: How to Pay for the Property

Under FEMA, NRIs can buy residential or commercial property in India without prior RBI permission. The funding side has three legitimate channels, and mixing them incorrectly is the most common reason deals get delayed.

Inward remittance: The cleanest route. Transfer funds from your overseas account directly to the seller or the developer’s escrow account through normal banking channels. Keep the FIRC (Foreign Inward Remittance Certificate) from your bank, you will need it at registration and later for repatriation.

NRE / NRO / FCNR account balances: Money already parked in these accounts can be used for property payments. NRE and FCNR balances are fully repatriable. NRO balance repatriation is capped at USD 1 million per financial year.

NRI home loan: Most Indian banks, HDFC, SBI, ICICI, Axis, LIC Housing Finance, and others, offer NRI home loans up to 75 to 80 percent of the property value. Repayment has to happen through your NRE or NRO account. Loan tenures are typically 10 to 20 years, shorter than the 30-year tenures available to resident Indians.

What you cannot do: use foreign currency directly. All payments must be made in Indian rupees through a banking channel. The old rule allowing agricultural land or plantation purchases still stands: NRIs cannot buy agricultural land, farmhouses, or plantation property unless inherited.

Step 3 — How Joint Ownership Works for NRIs

Joint ownership is permitted and often smart. You can buy jointly with another NRI, a resident Indian relative, or your spouse. A few things matter here.

The co-owner must contribute financially, at least on paper, for the joint ownership to hold up under FEMA scrutiny and for income tax purposes. Each co-owner’s share should be reflected in the sale deed. For home loans, all co-owners are typically required to be co-applicants, which means each one’s income counts toward loan eligibility.

If you are buying with a resident Indian parent or sibling, the property can remain in their physical custody while you are abroad, which solves the caretaking problem without needing a formal Power of Attorney. Rental income, if any, gets split according to ownership share and is taxed in each owner’s hands separately.

Step 4 — Property Taxes and Income Tax for NRI Buyers

NRIs are liable for the same property-related taxes as resident Indians, with one key addition: TDS on the purchase.

TDS on purchase: If you buy from a resident Indian seller, you deduct 1 percent TDS (on property worth over INR 50 lakh) and deposit it with the Income Tax Department. If you buy from another NRI, TDS rates are higher, 20 percent on long-term capital gains and 30 percent on short-term, plus applicable surcharge and cess. Get a CA involved if the seller is an NRI.

Stamp duty and registration: Same rates as residents, typically 5 to 7 percent of the property value depending on the state. Telangana is currently at 6 percent (4 percent stamp duty plus 2 percent registration).

Annual property tax: Paid to the municipal body (GHMC in Hyderabad, for example). Usually a small fraction of the property value, paid annually.

Income tax on rental income: If you rent out the property, 30 percent TDS on the rent is deducted by the tenant before payment. You can claim this back or adjust against other tax liability while filing your Indian return.

Capital gains on sale: Long-term (held over 24 months) is taxed at 20 percent with indexation benefit. Short-term gets added to your income and taxed at slab rates.

Step 5 — Power of Attorney and Remote Execution

Most NRI buyers cannot be in India for every signature, site visit, and registration appointment. That is what a Power of Attorney is for.

Special Power of Attorney (SPA) is what you want, not a general one. An SPA gives a specific person the authority to perform specific acts: signing the agreement, appearing at the sub-registrar’s office, handling loan documentation. The acts should be spelled out tightly.

The SPA must be executed before an Indian consular officer in your country of residence (for example, the Consulate General of India in Dubai or the Indian High Commission in London), then attested and stamped in India after you receive it. Do not skip the attestation, property registrations have been rejected because the POA was signed overseas but never adjudicated in India.

Remote registration: Some states now allow registration via video link or through the POA holder alone. Check with the local sub-registrar before assuming. In Telangana, POA-based registration is accepted provided the POA has been adjudicated by the stamp office.

Choose your POA holder carefully. This person will be handling a multi-crore transaction on your behalf. Parents, siblings, and long-trusted family friends work. Lawyers can also hold POAs but typically charge 0.5 to 1 percent of the transaction value.

Where to Buy: Hyderabad as an NRI Destination

Hyderabad has become one of the strongest NRI buyer markets in India, second only to Bangalore in IT-linked residential demand. Price points in Kokapet, Nallagandla, and Kondapur are 30 to 45 percent lower than comparable Bangalore or Mumbai locations, RERA enforcement is tight, and rental absorption is strong because the tenant pool is continuous. For a deeper look at where the market is moving, our breakdown of the best areas to buy property in Hyderabad covers the shortlist most NRI buyers work with.

Official Resources & References: For verified information, visit RERA Telangana, RBI FEMA regulations.

Frequently Asked Questions