TL;DR
- NRIs and OCIs can buy residential and commercial property in India freely (no RBI approval) but cannot buy agricultural land, plantations, or farmhouses; funds must move through NRE, NRO, or FCNR accounts or by inward remittance, never cash. Before booking, verify the project's RERA registration and the seller's title from source records, and if you cannot fly in, transact through a properly attested, registered Specific Power of Attorney.
- For an under-construction unit, the single most important pre-booking check is RERA registration plus the approved plan, encumbrance certificate, and (for ready units) the Occupancy Certificate.
- For resale or land, the diligence is the same as for any buyer: a 30-year title chain, encumbrance certificate, tax/khata records, and litigation search; the difference is you are doing it remotely, so source-linked evidence matters more.
- NRIs face two elevated risks: Power of Attorney misuse and inheritance/co-owner disputes. Both are controllable with the right document hygiene and a lawyer's sign-off.
- When you sell, the buyer must deduct TDS under Section 195 (a reduced long-term rate since July 2024, plus surcharge and cess) — plan for it and for a lower-deduction certificate.
Can an NRI legally buy property in India?
Yes. Under the Foreign Exchange Management Act (FEMA) 1999 and RBI regulations, a Non-Resident Indian (NRI) or an Overseas Citizen of India (OCI) cardholder can acquire residential and commercial immovable property in India without any prior approval from the RBI, and without any cap on the number of such properties.
The crucial exception: an NRI or OCI cannot purchase agricultural land, plantation property, or a farmhouse. They can only acquire such land by inheritance or, in limited cases, by gift from a resident relative. This is a hard FEMA prohibition, not a paperwork hurdle — a sale deed for agricultural land in favour of an NRI is void, and an unauthorised acquisition can attract heavy penalties. (We cover the nuances, including the "agricultural land that has been legally converted" question, in our guide to whether an NRI can buy agricultural land under FEMA.)
NRI vs OCI: does it change what you can buy?
For property purchase, the rules are effectively the same for NRIs and OCIs — both can buy residential and commercial property and both are barred from agricultural land. A foreign national who is not of Indian origin generally cannot buy property in India at all (only lease for up to five years) without RBI permission. So the threshold question is your status, not your passport colour.
How payment must flow
This is where NRIs trip up. The purchase price must be paid:
- out of funds remitted to India through normal banking channels, or
- from the balance in your NRE (Non-Resident External), NRO (Non-Resident Ordinary), or FCNR (Foreign Currency Non-Resident) account.
No part of the consideration may be paid in cash, by traveller's cheque, or in foreign currency in India. Home loans from Indian banks and NBFCs are available to NRIs, with repayment routed through the same accounts. Keep every remittance advice and bank statement — you will want them both for repatriation later and as proof the transaction was FEMA-compliant.
What is the legal due-diligence checklist for NRIs buying property in India?
The short answer: the checklist is the same four pillars every buyer must clear — Ownership, Land, Encumbrance, Litigation — but you must complete it from abroad, on source documents, before you part with money or sign a Power of Attorney. A Title Search Report is the document that consolidates all four. Here is how each pillar applies to an NRI purchase.
Pillar 1 — Ownership (the title chain)
Confirm the seller actually owns what they are selling, with an unbroken chain of title.
- Obtain the mother deed and a 30-year chain of registered title documents (sale deeds, gift deeds, partition deeds, wills with probate where relevant).
- Trace the chain forward to the current owner and check that every link is registered and stamped, and that the registered sale deed — not an agreement to sell — is what actually transfers title.
- Cross-check ownership against revenue records. In Karnataka, that means the Bhoomi RTC/Pahani for revenue land. Remember that the khata or mutation entry shows who pays tax, not who owns — a mutation does not, by itself, prove ownership.
- For urban property in Bangalore, check the khata — and know the difference between A-khata, B-khata, and the new e-khata, because a B-khata property carries real constraints on loans and transfer.
Pillar 2 — Land (use, zoning, and approvals)
Confirm the land can lawfully be used and built upon as advertised.
- Check the land's classification and that any conversion from agricultural to non-agricultural use was validly done.
- For a built unit, obtain the sanctioned/approved building plan and confirm what was built matches what was sanctioned.
- Insist on the Occupancy Certificate. An OC is the local authority's certification that the building is fit for occupation and complies with the approved plan; a Completion Certificate is not a substitute. See OC vs CC — buying a flat without an OC is a common, avoidable mistake.
Pillar 3 — Encumbrance (is the property mortgaged or charged?)
Confirm the property is free of mortgages, liens, and undisclosed charges.
- Pull the Encumbrance Certificate (EC) for the longest period available. In Karnataka the EC and registered deeds come from Kaveri Online 2.0.
- Check CERSAI for registered security interests — a property can be mortgaged to a bank even if the EC looks clean for a given window.
- If the seller is a company, that adds NCLT/insolvency and charge-registry checks.
Pillar 4 — Litigation (is the property in dispute?)
Confirm no live case clouds the title.
- Search eCourts, the relevant State High Court, and (for corporate sellers) NCLT for pending suits, injunctions, or attachments naming the seller, the property, or prior owners.
- Watch specifically for partition suits and succession disputes — the exact category of risk NRIs are most exposed to.
For a deeper, developer-grade version of these four pillars, see the full property due-diligence checklist so you know what each pillar is screening for.
Under-construction vs ready vs resale: what to prioritise
| Property type | Verify first | Also check |
|---|---|---|
| Under-construction (builder) | RERA registration number and project page; approved plan; builder's title to the land | EC on the land; agreement-to-sell terms; construction-linked payment plan |
| Ready-to-move (builder) | Occupancy Certificate; RERA; conveyance of land/UDS to society | Khata transfer; property-tax paid-up status; maintenance dues |
| Resale flat or land | 30-year title chain; EC; current khata/RTC; litigation search | OC of the building; society no-objection; outstanding loan on the unit |
For any RERA-registered project, look up the registration on your state RERA portal before you book — it shows the approved plans, the promoter's track record, the encumbrance the promoter has declared, and the committed completion date. Booking before this check is the most common NRI regret.
How can an NRI buy property remotely with a Power of Attorney?
If you cannot be physically present to sign and register, you execute a Power of Attorney (PoA) in favour of a trusted person in India — and how you draft and attest it is the single biggest controllable risk in an NRI purchase.
Two rules matter most:
- Use a Specific (Special) PoA, not a General PoA. A Specific PoA names the exact property and the exact acts authorised (for example, signing and registering the sale deed for one named flat). A broad General PoA that lets the holder "deal with all my properties" is how PoA fraud happens — it can be misused to sell or mortgage assets you never intended to touch.
- Attest and adjudicate it correctly. A PoA executed abroad should be signed before, and attested by, the Indian Embassy or Consulate in your country of residence (or apostilled where the destination accepts apostille). Once it reaches India, it typically must be adjudicated/stamped within the prescribed period (commonly three months from receipt in India) and, for acts like sale registration, registered with the sub-registrar. An improperly attested or unstamped PoA can stall registration entirely.
Other PoA hygiene that protects NRIs:
- Give the PoA to a family member or a vetted professional, never to the seller, the seller's agent, or the builder.
- Limit its scope and, where possible, its validity period; revoke it in writing once the transaction closes and intimate the sub-registrar.
- Keep the PoA acts auditable — the attorney should send you the registered sale deed, the receipt, and the EC reflecting the new entry.
What a PoA does not do
A PoA does not cure a bad title. If the seller's title is defective, registering the sale through your attorney simply transfers a defective title to you. The PoA is a logistics tool for signing; it is not a substitute for the four-pillar diligence above. Do the title work first, then send the PoA.
What taxes and TDS apply — especially when an NRI sells?
When buying, an NRI pays the same stamp duty and registration charges as any buyer (these vary by state and are typically a percentage of the higher of consideration or guidance value). The tax that surprises NRIs comes at sale.
When an NRI sells property in India, the buyer is legally required to deduct TDS under Section 195 of the Income-tax Act before paying — and the deduction is on the sale consideration, not just the gain, unless the seller obtains a certificate. Current position:
| Situation | Indicative TDS treatment |
|---|---|
| Long-term gain (property held over 24 months) | A reduced base rate of 12.5% applies (down from 20%, w.e.f. July 2024), plus applicable surcharge and cess |
| Short-term gain (held 24 months or less) | Deducted at the applicable income-tax slab rate, plus surcharge and cess |
| Seller has a lower/nil-deduction certificate | TDS only on the actual capital gain at the certified rate |
These figures are indicative; surcharge depends on the sale value, and the precise effective rate (and whether indexation applies to your specific holding) should be confirmed with a chartered accountant. The practical move for an NRI seller is to apply to the income-tax department for a lower-deduction certificate before the sale, so TDS is computed on the actual gain rather than withheld on the full price and locked up until you file a return and claim a refund.
Repatriation of sale proceeds is permitted within FEMA limits (broadly, up to the foreign exchange originally remitted for the purchase, with conditions; sale proceeds of up to two residential properties are repatriable, subject to the applicable annual ceiling). Keep your purchase remittance trail — repatriation depends on proving how the property was originally funded.
What these records and portals cannot tell you
Government records are powerful but partial. Be honest about their limits:
- An Encumbrance Certificate reflects only registered transactions in the period and office you searched. An unregistered agreement to sell, an oral family arrangement, a tenancy, or a charge created in another sub-registry will not appear.
- Revenue records (RTC, khata) show possession and tax liability, not legal ownership. They are corroborating evidence, never conclusive proof of title.
- An OC confirms the building, not the title to the land beneath it.
- A litigation search can miss cases filed in a court you did not query, recently filed matters not yet uploaded, or disputes pending before tribunals and revenue authorities rather than civil courts.
This gap is exactly why a Title Search Report is a lawyer-reviewed product. At Deedwise, AI gathers and translates the source records and drafts the four-pillar report with the evidence linked to each finding; a qualified lawyer then reviews and signs off. For a buyer sitting overseas who cannot walk into a sub-registrar's office, that combination — source-linked evidence plus a human sign-off — is what makes remote diligence trustworthy rather than a leap of faith.
Frequently asked questions
Can an NRI buy property in India without coming to India? Yes. An NRI can complete a purchase remotely by appointing a trusted person in India through a registered Specific Power of Attorney, executed before and attested by the Indian Embassy or Consulate (or apostilled where accepted) and then adjudicated/stamped and registered in India. Use a Specific PoA naming the exact property and acts, never a broad General PoA, and never give it to the seller or builder. Crucially, complete the title diligence before sending the PoA — the PoA only handles signing, it does not cure a defective title.
Can NRIs and OCIs buy agricultural land in India? No. Under FEMA, NRIs and OCIs cannot purchase agricultural land, plantation property, or farmhouses. They can only acquire such land by inheritance, or in limited cases by gift from a resident relative. An attempted purchase is void and can attract heavy penalties. Residential and commercial property, by contrast, can be bought freely without RBI approval.
How should an NRI pay for property in India? Payment must move through normal banking channels — funds remitted from abroad, or from your NRE, NRO, or FCNR account. No part of the price may be paid in cash or in foreign currency within India. Home loans from Indian banks are available, repaid through the same accounts. Keep every remittance advice; you will need it for FEMA compliance and to repatriate sale proceeds later.
What TDS applies when an NRI sells property in India? The buyer must deduct TDS under Section 195. For long-term gains (property held over 24 months) the base rate was reduced to 12.5% with effect from July 2024, plus surcharge and cess; short-term gains are deducted at slab rates. By default TDS is computed on the full sale price, so NRI sellers should obtain a lower-deduction certificate beforehand to have it computed on the actual gain. Confirm the exact effective rate with a chartered accountant, as surcharge depends on the sale value.
What is the most important check before booking an under-construction flat as an NRI? Verify the project's RERA registration on the state RERA portal before you pay anything. The listing reveals the approved plans, the promoter's declared encumbrances and litigation, the committed completion date, and the promoter's track record. Alongside RERA, confirm the builder's title to the land and pull an encumbrance certificate; for a ready unit, insist on the Occupancy Certificate.
Why do NRIs face higher title risk than resident buyers? Two reasons. First, Power of Attorney misuse — a broadly drafted or carelessly handed-over PoA can be exploited to sell or mortgage your property. Second, inheritance and co-owner disputes — property in extended families often carries unrecorded claims, partition suits, or succession gaps that surface years later. Both are controllable with a Specific PoA, disciplined document hygiene, and a source-backed title search reviewed and signed by a lawyer before you commit funds.
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