RBI regulates an NRI property purchase on two axes this guide's tables don't fully spell out: how you're allowed to pay (only through NRE/FCNR(B)/NRO banking channels, never cash or a traveller's cheque), and how much you can send back out (capped at one million US dollars per financial year, and to no more than two residential properties' worth of sale proceeds). Whether you count as an NRI, a PIO or an OCI cardholder changes which of RBI's rules apply to you — and the financing rule that caps how much a bank can lend against the property is the same rule that applies to a resident buyer, not a separate NRI-only ceiling.
NRI, PIO, OCI — three different definitions RBI uses
RBI's own FAQ defines the terms this guide's eligibility table assumes you already know: "A 'Non-resident Indian' (NRI) is a person resident outside India who is a citizen of India". A PIO (Person of Indian Origin) is a citizen of another country — excluding Bangladesh and Pakistan — who was a former Indian citizen, or belonged to a territory that became part of India after 15 August 1947, or is a descendant or spouse of such a person. An OCI (Overseas Citizen of India) cardholder resident outside India is folded into the PIO category for the purposes of this FAQ. The distinction matters in practice mainly for documentation: an OCI card or the specific lineage proof a PIO claim requires is what a bank or registrar will ask for, not just a foreign passport.
How you're allowed to pay — banking channels only
RBI's rules on immovable property purchase by NRIs are specific about the payment method, not just the amount: "Payment for immovable property has to be received in India through banking channels...NRE/FCNR(B)/NRO accounts", and explicitly not by traveller's cheque or foreign currency notes. RBI's separate Master Circular on acquisition of immovable property by NRIs restates the same requirement in its own words: funds must come "through normal banking channels by way of inward remittance from any place outside India or by debit to his NRE / FCNR(B) / NRO account". A cash payment, however small a portion of the total price, is outside RBI's permitted payment channels for an NRI buyer — this is a compliance issue independent of TDS, stamp duty, or any of the other costs this guide's tables cover.
Repatriating sale proceeds — the caps the existing table doesn't state
The repatriation table above states the one-million-per-year limit correctly, but RBI's rule carries a second cap this guide doesn't mention: repatriation of sale proceeds is restricted to "not more than two such properties" — RBI's Master Circular on immovable property confirms the same figure independently, capping remittance of inherited/legacy sale proceeds at capping remittance of such proceeds at one million US dollars per financial year. An NRI who has sold three or more residential properties in India cannot repatriate the proceeds of the third and beyond under this route, regardless of how far under the yearly ceiling they are — the two-property limit and the yearly ceiling are separate constraints, and both must be satisfied.
Which residency test decides whether you're taxed as an NRI at all
Before any of the TDS or capital-gains treatment in this guide's tables applies to you, you need to actually meet the non-resident test for the assessment year in question — it isn't a permanent label. The Income Tax Department's own AY 2026-27 guidance states the general residency test as presence in India of "fewer than 182 days in India during the financial year, or fewer than 60 days (with certain exceptions for citizens earning over ₹15 lakh)". An Indian citizen who spends more time in India in a given year than that test allows may file as a resident for that year even while holding NRI status for banking and property purposes — the same person can be a resident for one financial year's tax return and file the following year's as a non-resident, depending on their actual days in the country. The same guidance is explicit that NRIs are taxed under the same general individual slab structure as residents — there is no separate NRI-specific income tax rate table; what changes for an NRI is the residency test itself and the TDS mechanics on payments made to them, not a different underlying slab schedule.
Financing the purchase: the same LTV rule as any other buyer
An NRI home loan from an Indian bank is still a housing loan under RBI's general regulation, not a separate NRI product with its own LTV ceiling. RBI's Master Circular on housing finance sets the same loan-to-value bands for every borrower: up to 90% for loans up to ₹30 lakh, 80% up to ₹75 lakh, and 75% above that, with stamp duty and registration excluded from the property cost the LTV is measured against, except where the house costs ₹10 lakh or less. Nothing in RBI's published housing-finance rules carves out a different LTV ceiling for an NRI borrower specifically — a lender may apply its own tighter internal policy for NRI applicants, but that is bank policy, not an RBI-mandated NRI ceiling, and should be confirmed against the specific lender's own published NRI loan terms rather than assumed from the general circular.
Methodology
Definitions and payment-channel/repatriation rules are quoted directly from RBI's own FAQ and Master Circular text. The residency test and general slab-applicability statement are quoted from the Income Tax Department's AY 2026-27 guidance. LTV figures are the same RBI circular already cited elsewhere on this site. No TDS percentage or Section 195 mechanic beyond what is already stated is added here, since no registry source in this lane independently confirms the specific NRI-seller TDS rate.
Sources
- Reserve Bank of India — FAQs: Accounts in India by Non-residents (NRI/PIO/OCI definitions) — accessed 2026-09-21
- Reserve Bank of India — FAQs: Purchase of Immovable Property — accessed 2026-09-21
- Reserve Bank of India — Master Circular: Acquisition and Transfer of Immovable Property in India (NRIs/PIOs) — accessed 2026-09-21
- Income Tax Department — Non-Resident Individual for AY 2026-27 — accessed 2026-09-21
- Reserve Bank of India — Master Circular – Housing Finance (February 2022) — accessed 2026-09-21