FEMA & RBI guidelines for NRIs buying property in India.
The regulatory framework — in plain English.
Who Can Buy?
NRIs (Non-Resident Indians holding Indian passport), OCIs (Overseas Citizens of India), and PIOs (Persons of Indian Origin) can all freely purchase residential and commercial property in India, without any RBI approval.
What Cannot Be Bought
Agricultural land, plantation property, and farmhouses cannot be purchased by NRIs / OCIs. However, these can be inherited.
How Payments Must Be Made
All purchase payments must be routed through NRE (Non-Resident External), NRO (Non-Resident Ordinary), or FCNR (Foreign Currency Non-Resident) accounts held with authorised Indian banks. Cash, traveller's cheques and foreign currency are not permitted.
Loan Provisions
Indian banks can extend home loans to NRIs up to 80% of the property value. EMIs must be paid from the same NRE / NRO account into which salary or remittances are credited.
Reporting to RBI
For purchases within India — no direct reporting by the NRI is required; the bank routing the funds handles regulatory intimation. For sale and repatriation of proceeds, Form 15CA + Form 15CB is required.
Number of Properties
There is no cap on the number of residential properties an NRI can own in India. However, repatriation of sale proceeds is limited to two residential properties in a lifetime.
Rental Income
NRIs can freely receive rental income into NRO accounts. Rent is fully repatriable through the NRO channel, subject to tax compliance.
Common Pitfalls
Do not fund the purchase from an overseas account into a random Indian resident's account — this violates FEMA. Do not sign a sale deed under general POA — insist on a Special POA for the specific property. Always retain the bank foreign inward remittance certificate (FIRC) for the transaction.