NRI Property Buying Guide India 2026 — FEMA, TDS & Repatriation
NRIs buying property in India navigate a different ruleset — higher TDS (22.88% when seller is NRI, not 1%), FEMA restrictions on repatriation, and loan rates 1–1.5% above resident rates. This guide covers every rule — with 2026 numbers.
What property can NRIs buy in India?
NRI Property Purchase Eligibility
| Property type | NRI/OCI eligible? | Restrictions |
|---|---|---|
| Residential apartment / flat | Yes — unlimited | No RBI approval needed |
| Independent house / villa | Yes — unlimited | No RBI approval needed |
| Commercial property (office, shop) | Yes — unlimited | No RBI approval needed |
| Agricultural land | No (purchase) | Can INHERIT, cannot BUY |
| Plantation property | No (purchase) | RBI permission required to buy |
| Farmhouse | No (purchase) | RBI permission required to buy |
TDS comparison — buying from resident vs NRI seller
TDS Rates — NRI vs Resident Seller
| Seller type | TDS rate | Form | Notes |
|---|---|---|---|
| Resident Indian — property >₹50L | 1% of sale price | Form 26QB | Standard Section 194-IA |
| NRI seller — LTCG (held >2 years) | ~22.88% (20% + surcharge + cess) | Form 27Q | Section 195 |
| NRI seller — STCG (held ≤2 years) | Slab rate + cess (up to ~34%) | Form 27Q | Section 195 |
| NRI seller with Lower Ded. Certificate | Rate specified in certificate | Form 27Q | Apply via Form 13 — significant savings |
NRI seller TDS — the most missed obligation
If you buy a ₹1 crore flat from an NRI seller without their Lower Deduction Certificate, you must deduct ₹22.88 lakh in TDS and pay only ₹77.12 lakh to the seller. If you don't deduct TDS, you are liable for the full TDS amount plus interest and penalty. Ask every seller for their PAN and residency status before signing.
Repatriation of sale proceeds
NRI Property Repatriation Rules
| Scenario | Repatriation limit | Requirements |
|---|---|---|
| NRE account purchase, any amount | Full amount freely repatriable | No Form 15CA/CB needed |
| NRO account purchase | USD 1M/year limit | Form 15CA/15CB from CA required |
| Mix of NRE + NRO | NRE portion free; NRO portion limited | Separate accounting needed |
| After paying capital gains tax | Balance after tax can be repatriated | Tax clearance needed |
Frequently asked questions
What property can NRIs buy in India?
NRIs (and OCI/PIO cardholders) can buy: Residential properties (apartments, villas, houses) — no restriction on number. Commercial properties (offices, shops, warehouses) — no restriction. NRIs CANNOT buy: Agricultural land, plantation property, or farmhouses without RBI permission. If an NRI inherits agricultural land, they can hold it but cannot purchase it.
What is the TDS rate when buying property from an NRI in India?
If the property seller is an NRI (Non-Resident Indian), the buyer must deduct TDS under Section 195 at: Long-Term Capital Gains (held >2 years): 20% + 10% surcharge (if applicable) + 4% HEC = approximately 22.88% effective rate. Short-Term Capital Gains (held ≤2 years): applicable income tax slab rate of the NRI seller. This is very different from the 1% TDS for resident sellers. The NRI seller can apply for a Lower Deduction Certificate (Form 13) from the Income Tax Department if their actual tax liability is less than 22.88%.
How does an NRI repatriate property sale proceeds to their home country?
NRI repatriation rules under FEMA: (1) Limit: USD 1 million per financial year from all sources (not just property). (2) Allowed repatriation: Amount originally invested in foreign currency + capital gains in proportion. (3) If purchased with NRE funds: full amount including profits can be repatriated freely. (4) If purchased with NRO funds (Indian rupee income): limited to USD 1M/year, requires Form 15CA/15CB from CA. (5) All capital gains taxes must be paid before repatriation. (6) Property must have been purchased through proper banking channels (no cash).
What documents does an NRI need to buy property in India?
Documents required for NRI property purchase: Valid Indian passport (OCI/PIO card if applicable). Overseas address proof (utility bill, bank statement abroad). Indian address proof for NRE/NRO account. PAN card (mandatory for registration and TDS). NRE or NRO bank account statement (last 6 months). If applying for home loan: last 2–3 years' income tax returns (foreign country), employment contract/letter, salary slips (last 3–6 months), and bank statements. Power of Attorney (notarized and apostilled) if not able to be present in India for signing.
Disclaimer: FEMA rules and tax rates for NRIs are complex and frequently updated. Consult a FEMA-specialist CA or lawyer before making investment decisions. This guide is for educational purposes only.