NRI Property Purchase in India: What Overseas Indians Can Buy, Legal Rules & Key Restrictions
New Delhi, May 20: From FEMA regulations and agricultural land restrictions to tax benefits and required documents, here's a complete guide for NRIs buying property in India.
What NRIs Can Buy
Under current FEMA rules, NRIs are permitted to buy residential properties, commercial properties, non-agricultural residential plots, and urban land for residential construction. There is no limit on the number of residential or commercial properties an NRI can own in India. Popular investments include apartments, luxury flats, villas, office spaces, retail shops, and warehouses.
What NRIs Cannot Purchase
NRIs are not allowed to directly purchase agricultural land, plantation property, or farmhouses. However, agricultural land can be acquired through inheritance from family members or as a gift from a resident Indian subject to legal compliance. Direct purchase using overseas funds is not permitted.
Documents Required
Essential documents include valid passport, visa or residence permit, overseas address proof, PAN card, salary slips or income proof, bank statements, and income tax returns. If the buyer cannot travel to India, a Power of Attorney (PoA) is required. The PoA must be properly notarised, signed before authorised officials abroad, and legally valid in India.
Tax Benefits Available
Under Section 24B, NRIs can claim deductions of up to ₹2 lakh on home loan interest for self-occupied properties. Under Section 80C, tax deductions of up to ₹1.5 lakh can be claimed on principal repayment, stamp duty, and registration charges. These benefits are similar to those available to resident Indian taxpayers.
Payment Methods and Key Checks
NRIs can make property payments through NRE accounts, NRO accounts, FCNR accounts, or inward bank remittances through official banking channels. Cash payments are not allowed. Before finalising a deal, NRIs should check builder reputation, clear ownership title, pending legal disputes, RERA approval status, land classification, and loan eligibility. Consulting a property lawyer and tax expert is strongly recommended.