The short answer is yes, an NRI can buy residential and commercial property in India without special permission, under the framework set out by FEMA, the Foreign Exchange Management Act. The longer answer involves two categories of property that remain off-limits, and a few practical details that trip people up more often than the legal restriction itself.
Agricultural land, plantation property, and farmhouses cannot be purchased by an NRI under normal FEMA provisions. The only route into owning such property is inheritance, receiving it from a resident relative who already owned it, not direct purchase. This restriction surprises people who assume any property type is fair game once residential and commercial purchases are permitted.
Funding the purchase has its own rules. Payment must come through normal banking channels, either via an NRE, NRO, or FCNR account, or through inward remittance from abroad, and cannot be made in foreign currency directly or through cash. Home loans are available to NRIs from Indian banks, though the repayment structure and documentation required often differ from what a resident borrower faces.
Repatriating sale proceeds later has its own conditions attached. Generally, the sale proceeds of up to two residential properties can be repatriated, subject to conditions on how the original purchase was funded and applicable tax clearances, so it’s worth planning the exit before completing the entry. Advisors at Ashutosh Financial Services often see this step overlooked at purchase time, only to become a complication years later at sale.
TDS on the sale of property by an NRI is deducted at a rate meant for non-residents, generally higher than the seller’s actual tax liability, which means filing a return to claim the excess back is usually necessary rather than optional. Ashutosh Financial Services continues to walk NRI clients through this full purchase-to-eventual-sale cycle, since the rules that matter most often aren’t the ones asked about at the time of buying.
