Many Indians living abroad buy a flat back home, to live in later, for their parents, or to rent out. Non-resident Indians (NRIs) and Overseas Citizens of India (OCI cardholders) can buy most property in India without any special permission, but the money has to come in a particular way, registration needs either a visit or a power of attorney, and tax works differently when you rent or sell. This guide covers each step.
What NRIs and OCIs can and cannot buy
| Type of property | Can you buy it? |
|---|---|
| Flats, villas, residential plots | Yes, any number, no RBI permission needed |
| Offices, shops and other commercial property | Yes, no RBI permission needed |
| Agricultural land, plantations, farmhouses | No (only by inheritance) |
| Any property by inheritance or gift from a relative | Yes (agricultural land by inheritance only) |
These rules come from the Foreign Exchange Management Act (FEMA) and its rules on non-debt instruments. Foreign citizens who are not OCI cardholders are under stricter rules and generally need RBI approval, so this guide is for NRIs and OCIs.
How to pay
The payment for the property must come through normal banking channels. You can pay from:
- Money sent from abroad into India through a bank (an inward remittance).
- Your NRE or FCNR(B) account, which holds money earned abroad.
- Your NRO account, which holds money earned in India, such as rent or dividends.
You cannot pay in foreign currency notes or traveller’s cheques, or from a bank account outside India directly to the developer. Keep the bank advice for every remittance (the foreign inward remittance certificate or a bank statement showing it). It is your proof of where the money came from, and you will need it if you sell and want to send the money back abroad.
Stamp duty and registration charges are the same as for a resident; see stamp duty and registration charges in Pune. If you buy from a resident seller or a developer and the price is ₹50 lakh or more, you deduct 1% TDS just like a resident buyer.
Home loans for NRIs
Most Indian banks and housing finance companies lend to NRIs. The loan is in rupees and is repaid from your NRE or NRO account or by remittances from abroad, not in cash.
- How much: the same limits as for residents, up to 75–90% of the property value depending on the loan size. Stamp duty and registration are paid from your own money.
- What banks ask for: your passport and visa or OCI card, overseas work contract or business proof, recent salary slips and bank statements, sometimes an overseas credit report, and your PAN.
- A co-applicant in India (often a parent or spouse) or a power of attorney holder makes the paperwork easier, because the bank needs someone to sign and deal with it locally.
- Term: often shorter than for residents, depending on your age and the type of work you do abroad.
Our guide to home loan EMI and eligibility shows how banks work out how much you can borrow.
Buying without flying in: power of attorney
The agreement for sale has to be registered at the sub-registrar’s office, with photographs and fingerprints of the parties. If you cannot come to India for that, you can give a trusted person, usually a family member, a power of attorney (PoA) to sign and register for you.
- Make it specific. A special power of attorney that names the flat, the project and what the holder can do (sign, pay, register, take possession) is safer than a general one, and banks and sub-registrars accept it more easily.
- Sign it in front of the right official. Sign before an Indian embassy or consulate officer, or before a local notary and then have it apostilled if the country is part of the Hague Apostille Convention.
- Get it stamped in India. A PoA signed abroad has to be stamped (adjudicated) in India within three months of reaching India. In Pune, that is done at the office of the Collector of Stamps.
- Cancel it when the work is done, in writing, so it can’t be misused later.
Checks you still have to do
From abroad it is harder to visit the site and meet the developer, so the checks matter more:
- Check the RERA registration and the project’s progress reports. RERA protects NRIs exactly as it protects residents, and you can file a complaint online. See how to check a MahaRERA registration number.
- Get a video site visit, or ask someone you trust to visit. Our site visit checklist lists what they should look at.
- Read the agreement before you or your PoA holder sign it. See clauses to check in the agreement for sale.
- Pay only to the project’s bank account named in the agreement, never to an individual.
Tax while you own the flat
- Rent is taxed in India. A tenant who pays rent to an NRI must deduct TDS (about 31% including cess) before paying you, unless you get a lower deduction certificate from the Income Tax Department. You can claim the TDS back when you file your Indian return.
- Home loan deductions are available to NRIs under the old tax regime, on the same terms as residents. See home loan tax benefits.
- Tax where you live. Your country of residence may also tax the rent. A double taxation avoidance agreement (DTAA) usually lets you claim credit for the Indian tax.
Tax when you sell
If you sell after holding the property for more than 24 months, the gain is long-term and is taxed at 12.5% plus surcharge and cess. If you sell earlier, the gain is short-term and is taxed at your slab rate.
When the seller is an NRI, the buyer must deduct TDS on the capital gain at the rates above, not the 1% that applies to a resident seller. The buyer needs a TAN for this. Because buyers often deduct on the whole price to be safe, sellers usually apply to the Income Tax Department for a lower deduction certificate before the sale, so that TDS is taken only on the actual gain.
Sending the money back abroad
- Up to what you paid in foreign exchange: the sale money of up to two residential properties can be sent back, up to the amount you originally paid from abroad or from your NRE/FCNR account (including loan EMIs paid that way).
- Anything more goes to your NRO account. From the NRO account you can send up to USD 1 million a financial year abroad, after tax, with Forms 15CA and 15CB filed through your bank and a chartered accountant.
This is why the remittance records from when you bought matter: they decide how much you can send back easily.
FAQs
Do NRIs need RBI permission to buy a flat in India?
No. NRIs and OCI cardholders can buy residential and commercial property without RBI permission. Only agricultural land, plantations and farmhouses are off limits, except by inheritance.
Can an NRI buy a flat jointly with a resident?
Yes. The money for the purchase still has to come through the routes above.
Can I pay the developer from my bank account abroad?
No. Send the money to India first, or pay from your NRE, FCNR or NRO account.
Do I need a PAN?
Yes, in practice. It is needed for registration above certain values, for a home loan, for TDS and for filing a tax return on rent or a sale.
This guide is general information based on the rules as we understand them in October 2026, not legal or tax advice. FEMA and tax rules change, and your country of residence has its own rules. Check your case with a chartered accountant and a property lawyer before you buy or sell.
Cover photo: Pune Airport Front View 2025 by Sreedit, CC0, via Wikimedia Commons. Cropped, with text added.