What an NRI can legally buy

Under FEMA (Foreign Exchange Management Act) regulations and RBI guidelines, an NRI may purchase:

And what they cannot purchase:

NRIs may inherit agricultural land, plantation property, or farmhouses. They may also receive them as gifts from a person resident in India who is a relative. But direct purchase is prohibited.

State-specific restrictions to know

Beyond FEMA, several Indian states have additional restrictions. Himachal Pradesh restricts non-Himachalis (including NRIs originally from outside HP). Uttarakhand has a 2025 Bhu Kanoon that limits outsiders to 250 sq m residential land. Goa has specific RBI clearance requirements. Check state laws carefully before signing anything.

How NRIs can pay for property

Payment must come through proper banking channels:

Cash payments are not permitted. Travellers cheques, foreign currency notes, and any non-banking instruments are prohibited. Violating this isn't just illegal — it makes the entire transaction vulnerable to challenge.

Home loans for NRIs

NRIs can take home loans from Indian banks and NBFCs. Most lenders offer NRI-specific products with these typical features:

You will need to provide proof of NRI status, employment abroad, income (recent payslips, employer letter, tax returns), and existing assets. A power of attorney holder in India often handles the documentation logistics.

The NRI-specific frauds you need to know

Fake power of attorney

The single most common NRI property fraud: a fraudster forges a power of attorney appearing to be from the NRI owner, and uses it to sell the property to an unwitting buyer (or even back to themselves through a shell company). NRIs living abroad often discover years later that their inherited Kerala or Punjab property has been sold without their knowledge.

Mitigation: register a Specific Power of Attorney (not General Power of Attorney), limit its scope to specific transactions only, and have a trusted family member or lawyer physically verify any document claiming POA from you.

Builder default on under-construction properties

NRIs are particularly vulnerable to builder fraud because they cannot easily visit construction sites. Dehradun's Pushpanjali / Orchid Park case (₹50 crore+ in alleged cheating of flat buyers) included many NRI victims. Mumbai, Bengaluru, and NCR have similar serial cases.

Mitigation: only buy from RERA-registered projects, verify the builder's MCA21 status, check delivery history of previous projects, ideally talk to existing residents of other completed projects by the same builder before signing.

The "trusted relative" scam

A relative offers to "handle the property" for you — collecting rent, managing tenants, paying property tax. Years later, the relative has either sold the property, mortgaged it, or had the title transferred. Family disputes over NRI properties in inheritance can stretch for decades.

Mitigation: even with family, use formal contracts. Don't grant general POA. Visit India periodically to verify property status independently. Hire a separate, neutral party (lawyer or property manager) to do annual checks.

Price inflation specifically for NRIs

Brokers often quote NRIs prices 15–25% above local market rates, assuming foreign income means inflated budgets. The seller and broker split the premium.

Mitigation: always obtain independent comparable sales analysis before agreeing to a price. Don't reveal you are an NRI in initial negotiations.

The complete NRI verification checklist

Before you sign anything, verify each of the following:

Property and ownership

Seller verification

NRI-specific requirements

Physical verification

Hazard and infrastructure

Financial verification

The taxation reality for NRIs

NRI property transactions have specific tax implications:

When buying

If you are buying from another NRI, you must deduct TDS at 20% (plus surcharge and cess) on the sale value and deposit it with the government. If buying from a resident Indian, TDS is 1% for transactions above ₹50 lakh.

When selling later

Long-term capital gains (property held more than 24 months) are taxed at 20% with indexation. Short-term gains are taxed at applicable slab rates.

Repatriation

Sale proceeds from up to two residential properties can be repatriated, subject to limits ($1 million per financial year cap on most transactions). For repatriation, you must have purchased the property using foreign exchange or NRE/FCNR funds — properties purchased with NRO funds have more limited repatriation rights.

Consult a chartered accountant familiar with FEMA and NRI taxation before any significant transaction.

The propxpraman approach for NRI buyers

Our NRI Concierge tier is specifically built for the verification challenges NRIs face. We run all the above checks automatically — ownership chain, EC analysis, eCourts scan, MCA21 verification, identity matching, flood and seismic risk overlay, comparable sales analysis. We add a physical site visit by our local team, a video walkthrough with you, lawyer review of our verdict, vetted local lawyer introduction, and power-of-attorney drafting guidance. The entire report is delivered to suit your timezone — most clients receive it the day after submission, regardless of where they are in the world.