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8 Things All NRIs Should Remember Before Buying Property in India

When you are an NRI and want to buy property in India, there are some things that you should always keep in mind before finalizing any deal. There are some important factors that you must take into consideration before making the purchase of any property in India, whether it’s your first property or not. Let’s have a look at those factors –

if you plan to buy a property in India as a non-resident, you need to follow certain steps to stay away from all the troubles. Currency rates have also made buying a property in India more lucrative.
Foreign exchange management act (FEMA) allows Indian citizens living abroad to invest in Indian real estate. You are able to purchase agricultural land, plantation property, or a farmhouse. Whether you purchase a property for self-use, rental, or investment determines your liability and taxes.

Things to Remember while NRIs buying property in India

Buying a property in India as an NRI has some special rules and regulations to be aware of. Buying properties in India is possible, but the tax liability will vary depending on the type. You should consider these 8 things before buying a property in India as an NRI.

1. Nature of Property

It is normal for NRIs to be able to buy all types of properties in India, except agricultural land, farmhouses, and other kinds of plantation property. Indian government and RBI approval is required to acquire agricultural land or a farmhouse.

2. Taxation

NRIs selling a property in India are subject to the TDS (Tax Deducted at Source) calculation at the rate of 20.6%. Your short-term capital gains will be taxed at 30.9 percent which is very similar to the tax rate for Indians living in India. Refunds of TDS are available to NRIs who fall under lower tax brackets.

3. Number of Properties NRIs Can Buy

It is important to know that NRIs in India are allowed to buy up to three properties at a time. It is important to consider that the property is purchased for their own use or for investment. you can earn high rents from renting out new flats for sale in India as an investment.

4. Taking Home Loan

NRIs can buy residential properties in India through the National Housing Bank, which has been permitted by the RBI. It is necessary to repay the loan in Indian currency. Based on the regulations, the amount of the loan will be determined. The loan money cannot be credited to the bank account of an NRI. The money must be disbursed to the account of the seller or developer. Alternatively, funds from the NRI's NRO/NRE account or FCNR deposit can be used to repay the loan.

5. Power of Attorney

Non-residents who live abroad can give power of attorney to people residing in India who can complete the property purchase process. Non-resident Indians can use one of two power-of-attorney rights: general or specific. The representative they appoint can take advantage of these rights as they see fit.

6. Tax Liability (Self-Use VS Rental Income)

If you are an NRI looking to invest in property in India, the first question that might come to your mind is: will my tax liability be any different if I invest in co-working or co-living space? Generally, when one buys a home for commercial purposes, it will have to pay higher property taxes than if one purchased the home for residential purposes. It is done so under the federal Income Tax Act, which cites the idea that commercial property may be receiving more tax benefits than those available for residential homes. If you purchase a house to live in it and live in it, you do not have to pay a notional rent. If the property is bought for commercial purposes, rental income will be its own taxable revenue for the NRIs. The taxes for the property rental income will be the same as those listed above.

7. Repatriation of Funds

In order to repatriate funds, NRIs must follow several guidelines. To sell their property, they must follow the same procedure as Indian citizens. In this section, we will list some conditions:
● When purchasing the property, it is important to keep in mind the FEMA directives.
● The repatriated amount will not exceed what you paid for the property.
● You can buy this property in foreign currency or with the help of a banking channel or with the funds in your FCNR account Though there are situations where an NRI must repatriate up to one million annually.
● If you receive a property as a gift, you will have to open an NRO account for the sales proceedings
● Often the property is inherited by the owner themselves and money goes back to India with help from an appropriate document.
● For Non-Resident Indians from Bangladesh, Srilanka, or China, they need RBI approval.

8. Return on Investment

An NRI looking to purchase a property in India needs to consider some important factors. New flats for sale in Chennai are available at affordable prices.
The return on investment will differ based on the type of property. Luxury and ultra-luxury residential properties can yield around 3-5% returns on investment. Commercial properties typically yield returns of 10-12 percent.


Buying a new property in India can be a difficult task for NRIs. But if you keep these points in mind, you will find it easier. There are no limits on how many properties you can purchase. If you're an NRI and you need some professional assistance in acquiring property, call our team of experts today.
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