“Synopsis”
Many Non-Resident Indians (NRIs) consider investing in real estate in India for financial returns or emotional ties to their homeland. But with evolving rules under FEMA (Foreign Exchange Management Act), it’s crucial to know what kind of property NRIs can legally buy in India. This blog breaks down the 2025 rules on NRI property purchase, covering what’s allowed, what’s restricted, and how to stay compliant.
Can NRIs Buy Property in India?
Yes, NRIs are allowed to buy property in India. Under FEMA guidelines, NRIs can legally purchase residential and commercial properties. However, there are restrictions on agricultural land, plantation property, and farmhouses.
What Properties Can NRIs Buy in 2025?
1. Residential Property
NRIs can purchase:
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Apartments
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Villas
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Independent houses
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Bungalows
There is no limit to the number of residential properties an NRI can buy.
2. Commercial Property
NRIs are also allowed to invest in:
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Office spaces
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Shops
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Commercial buildings
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Warehouses
This makes India an attractive location for NRI real estate investment in commercial segments.
What Properties Are NRIs Not Allowed to Buy?
As of 2025, NRIs cannot buy:
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Agricultural land
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Plantation land
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Farmhouses
This restriction is in place under FEMA regulations and applies regardless of the NRI’s country of residence.
Exception:
NRIs can inherit or receive such restricted land as a gift from a relative who is a resident Indian.
Mode of Payment for NRI Property Purchase
All payments must be made in Indian Rupees (INR) through:
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NRE Account
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NRO Account
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FCNR Account
Cash payments are not allowed under FEMA rules. The payment must come via banking channels, usually by wire transfer.
How Can NRIs Buy Property in India?
Step-by-step Process:
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Select the Property – Choose from approved projects with clear titles.
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Verify Legal Compliance – Ensure the seller is legally entitled to sell the property.
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Execute the Agreement – Use proper legal contracts and pay applicable stamp duty.
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Register the Property – Register the sale deed at the local sub-registrar office.
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Pay Taxes – NRIs must deduct TDS at 1% if buying from a resident seller for property over ₹50 lakhs.
Do NRIs Need RBI Approval to Buy Property?
No RBI approval is needed for buying residential or commercial property. But if the property is inherited or involves agricultural land, approval may be required.
Can NRIs Take Home Loans in India?
Yes, NRIs can take home loans from Indian banks for:
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Buying a house or apartment
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Constructing a home
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Renovation
Repayment must be made through NRE/NRO/FCNR accounts or from rental income.
What Documents Do NRIs Need to Buy Property?
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Passport and Visa Copy
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PAN Card
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OCI/PIO Card (if applicable)
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Indian Address Proof (if any)
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Power of Attorney (if buyer is abroad)
Can NRIs Rent Out Property in India?
Yes, NRIs can legally rent out residential or commercial properties. The rental income is taxable in India but can be repatriated after paying applicable taxes.
Tax Implications for NRIs in 2025
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Rental Income: Taxable at slab rates in India. TDS of 30% applies.
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Capital Gains: Long-term capital gains taxed at 20% with indexation.
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TDS: Deducted at the time of property sale or rent payments.
NRIs should file ITR in India to claim refunds and stay compliant.
Repatriation of Sale Proceeds
NRIs can repatriate the sale proceeds of two properties, subject to:
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The property was purchased in foreign currency
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The funds go through NRE/NRO accounts
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Compliance with Form 15CA and 15CB
Power of Attorney for NRIs
If an NRI is not physically present in India, they can appoint a Power of Attorney (PoA) to:
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Sign property agreements
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Register the deed
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Handle legal formalities
Ensure that the PoA is notarized and attested by the Indian embassy.
Conclusion
In 2025, India remains a strong market for NRI real estate investments. As long as NRIs stick to FEMA rules, use proper banking channels, and avoid restricted land types, they can safely invest in residential and commercial properties. Understanding the updated laws and preparing documentation in advance can ensure a smooth, compliant, and profitable investment experience.
