Table of Contents
Why This Guide Matters for NRIs & HNIs
For many NRIs and High Net-Worth Individuals (HNIs), buying property in India is more than an investment—it’s a mix of emotional connection, wealth preservation, and financial growth. But here’s the catch: RBI and FEMA rules aren’t just formalities.
Buy the wrong type of property or use the wrong payment route, and you could face:
Penalties under FEMA (Foreign Exchange Management Act)
Funds stuck in India without repatriation rights
RBI scrutiny that delays or blocks your transaction
Why RBI Rules Matter for NRI Property Investments
RBI guidelines protect India’s foreign exchange system and ensure transparent property transactions for NRIs. Ignoring them can result in:
Invalid property ownership
Frozen accounts or blocked repatriation
Unnecessary tax liabilities
Pain Point: Many NRIs learn these rules only after investing—making fixes costly and stressful.
Who Qualifies as an NRI, OCI, or PIO Under RBI Rules
Before you invest, check your status:
NRI (Non-Resident Indian): Indian citizen living abroad for >182 days in a financial year.
OCI (Overseas Citizen of India): Foreign passport holder of Indian origin with OCI card.
PIO (Person of Indian Origin): Now merged under OCI rules.
✅ Rights are similar for NRIs, OCIs, and PIOs, but all must follow RBI & FEMA compliance.
Types of Property NRIs Can and Cannot Buy
Allowed:
Residential property (apartments, villas, bungalows)
Commercial property (shops, offices, warehouses)
Not Allowed:
Agricultural land
Plantation property
Farmhouses
🔹 Tip: You can inherit agricultural or plantation property, but cannot purchase it outright.
Top Reasons NRIs Are Investing in Indian Real Estate
Long-Term Capital Appreciation
Rental Income Potential
Exchange Rate Advantage
Improved Transparency via RERA
Portfolio Diversification
Emotional Ties
Growth in Commercial Real Estate
RBI Compliance Checklist Before You Buy
Open NRE/NRO Account – Route all payments through these accounts.
Ensure Inward Remittance – Funds via banking channels or NRE/NRO account.
Complete KYC with RBI-authorized bank.
FEMA Declarations – Keep ready before purchase.
Power of Attorney (PoA) – If buying from abroad, appoint someone in India.
Cities & Locations Where NRIs Are Investing
Metros: Bangalore, Gurgaon, Mumbai, Pune, Hyderabad
Growth Corridors: Greater Noida (boosted by Jewar Airport), Navi Mumbai
Emerging Tier-2: Jaipur, Kochi, Chandigarh
Commercial Hotspots: IT hubs, office spaces, warehousing
Financing Options for NRIs
Home Loans: Up to 80% of property value from Indian banks
Loan Disbursement: Paid directly to seller/developer
Repayment: Through NRE/NRO accounts or inward remittance
Taxation Rules for NRI Property Buyers
TDS: 1% if buying from resident seller (>₹50 lakh), 20%+ if from NRI seller
Capital Gains Tax:
Short-term (<2 years): slab rate
Long-term (>2 years): 20% with indexation
DTAA: Avoids double taxation
Repatriation of Sale Proceeds – RBI Rules
Limit: USD 1 million/year per person
Conditions: Property purchased with foreign exchange via banking channels
Documentation:
Sale & purchase agreements
Bank statements
CA certificate
Legal Framework: RBI, FEMA, and RERA
FEMA: Defines permissible property types and payment modes
RBI: Governs property purchase, sale, and fund repatriation for NRIs
RERA: Ensures transparency and buyer protection
Risks & Challenges for NRIs
Liquidity risk – property may take time to sell
Regulatory risk – missing filings can block repatriation
Market risk – overpaying in overheated markets
Tax changes – Budget amendments can impact gains
6 Tips for a Successful NRI Property Investment
Choose infrastructure-growth locations
Buy from reputed developers
Always use NRE/NRO accounts
Understand DTAA and home country’s tax rules
Keep compliance documents ready
Let Jubilant Realtech handle compliance and documentation
How Jubilant Realtech Helps NRIs Invest with Confidence
Due Diligence on property and seller/developer
FEMA & RBI Compliance checks
Legal Documentation preparation
Bank Coordination for fund transfers
End-to-End Support till repatriation
📞 Contact Jubilant Realtech for a compliance-first property investment experience
FAQs – RBI Regulations for NRI Property Purchase
NRIs can buy residential and commercial property, not agricultural land, plantations, or farmhouses.
No specific form for purchase, but FEMA requires KYC, PoA, and source of funds declaration.
FEMA mandates compliant payment channels and prohibits certain property types.
Up to USD 1 million/year with proof of purchase, sale, and tax clearance.
If buying restricted property or joint ownership outside general permissions.
By managing due diligence, compliance, legal paperwork, and fund transfers.
