Essential Things NRIs Need to Know Before Buying a Property in India

Buying a piece of land in India is more than an investment for an NRI. Many people have gone abroad to accelerate their career. Staying away from their parents for a long period of time who are in India makes them homesick.

Here is a guide for Non-Resident Indians (NRIs) looking to buy a plot or property in India.

1. Purpose: Your purpose of buying a plot in India should be clear. Are you looking for a home so that you can stay after your retirement? Or are you planning to buy a plot for business? These are the important questions you need to ask yourself before buying a plot in India.

2. Limitation: An NRI can buy any number of residential or commercial plot or property in India, except an agricultural land, plantation property, or a farmhouse. NRIs can receive residential or commercial property as a gift, however, they cannot acquire agricultural land, plantation property, or a farmhouse as a gift.

3. Transaction: All monetary transactions should be done with Indian currency. As per the government rules, 80 percent of the property’s value can be funded by a loan and the rest needs to be paid with Indian currency.

4. Home Loan: Indian banks can help NRIs with a home loan. The home loan needs to be paid through Indian currency. Some banks may need a power of attorney of Indian resident. You need to bring important documents like visa, last 6 month’s bank statements, and salary credit for the last 3 months.

5. Power of Attorney: An NRI can give the POA to any relative or friend who is living in India. They can make the arrangement of making transactions in India. Banks need POA too.

6. Taxation: If you are buying property worth more than 50 lakh rupees, then you have to pay 1% tax on it. This rule is for the first purchase only. The next purchase will be taxed at 1% tax on 30 lakh or above.

7. Selling the Property: If an NRI wants to sell their property, there are many rules and regulation to follow. They cannot transfer more than 1 million to their NRI account in a year in some cases. Taxation will be under FEMA (Foreign Exchange Management Act).



There is no limitation on buying immovable properties in India. However, funds need to be maintained in a non-resident account under FEMA. With a lot of new relaxed rules by the Indian government, it is fairly easy to invest in a property in India.

This is the best time for NRIs for land investment in India. The good options for investment would be regions like Delhi, Gujarat, Bangalore, Maharashtra etc. As per real estate experts, regions surrounding Pune have higher demand for land investment.

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