Yes — under FEMA (Foreign Exchange Management Act) regulations, NRIs and OCIs (Overseas Citizens of India) can freely purchase residential and commercial property in India without seeking special RBI approval. The one meaningful restriction is that NRIs cannot purchase agricultural land, farmhouses, or plantation property — these can only be inherited or gifted, not directly purchased.
Beyond that restriction, an NRI buyer goes through largely the same process as a resident Indian buyer: RERA verification, Agreement for Sale, registration, and (if financing the purchase) a home loan from an Indian lender, several of which have NRI-specific loan products.
In addition to the standard documents a resident buyer needs, NRIs typically must provide a valid passport and visa/OCI card, PAN card (mandatory for any property transaction in India), and proof of overseas address and income if applying for a home loan. A Power of Attorney is often necessary if you can't be physically present for parts of the transaction — covered in more detail below.
Banks financing NRI purchases will also typically require proof of overseas employment or income continuity, since loan eligibility and tenure calculations for NRIs sometimes differ slightly from resident applicants.
All payments toward an Indian property purchase must move through proper banking channels — paying in cash, foreign currency directly, or via traveller's cheques is a FEMA violation, regardless of intent. NRIs typically fund purchases through an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account, or through direct inward remittance from abroad.
An NRE account holds foreign earnings, and both the principal and interest are fully and freely repatriable, with interest earned being tax-free in India. An NRO account holds India-sourced income (rent, dividends, local salary) and permits repatriation of up to USD 1 million per financial year, subject to applicable tax compliance and documentation. Which account you fund the purchase from also affects how freely you can repatriate the sale proceeds later — worth planning at the time of purchase, not just at the time of sale.
Since NRIs often can't be present in India for every step of a purchase, a registered Power of Attorney (PoA) — typically given to a trusted family member, or in some cases a lawyer — is commonly used to sign documents, complete registration, and handle possession-related formalities on the buyer's behalf.
A PoA executed abroad needs to be notarized and, depending on the country, attested by the Indian consulate or apostilled, then adjudicated with the relevant stamp authority in India before it can be used for a registration. Because a PoA grants real legal authority, it should be drafted narrowly for the specific transaction and given only to someone you trust completely — overly broad PoAs have been a source of disputes in the past.
When an NRI buys property from a resident seller, standard TDS rules apply based on the seller's status and capital gains. When an NRI buyer purchases from an NRI seller (or in other applicable scenarios) and the transaction value exceeds ₹50 lakh, the buyer is required to deduct TDS at the applicable rate under Section 194-IA and deposit it with the Income Tax Department — this obligation sits with the buyer, not just the seller, so it's a step NRI buyers specifically need to be aware of.
Rental income earned in India by an NRI is taxable in India regardless of the owner's residency status, and is typically subject to TDS deduction by the tenant. NRIs should also check the Double Taxation Avoidance Agreement (DTAA) between India and their country of residence, since it can affect how the same income is taxed in both jurisdictions.
If you eventually sell the property, repatriation rules depend partly on how the original purchase was funded. If the property was bought using funds from an NRE account or direct foreign inward remittance, the sale proceeds — up to the original investment amount — can generally be repatriated freely, subject to the overall cap of USD 1 million per financial year (inclusive of all repatriations from NRO-type sources) and completion of standard tax compliance.
Repatriation requires submission of Form 15CA and Form 15CB (a chartered accountant's certificate confirming applicable taxes have been paid or provided for) to your bank before the funds can be wired abroad. It's worth engaging a CA experienced with NRI transactions early — ideally before the sale, not after — since the paperwork can otherwise delay the transfer by weeks.