NRI FAQs

1. Who Is Allowed to Buy Property in India?

Under general permission, the following categories can freely purchase residential and commercial property in India:

• 1. Non-Resident Indian (NRI)
• 2. Person of Indian Origin (PIO)

Note: This general permission does not extend to the purchase of agricultural land, plantation property, or farmhouses.

2. Can NRI/PIO Buy Agricultural Land or Farmhouses?

No, NRIs or PIOs cannot acquire agricultural land, plantation property, or farmhouses in India under general permission. Such purchases require prior approval from the Reserve Bank of India (RBI), and are considered in consultation with the Government of India.

3. Are There Any Reporting Requirements to RBI After Purchase?

No. NRIs/PIOs purchasing residential or commercial property under general permission are not required to file any documents with the RBI.

4. Is There a Limit to the Number of Properties an NRI/PIO Can Buy?

No, there is no restriction on the number of residential or commercial properties that an NRI or PIO can purchase.

5. Can a Foreign National Be a Joint Holder of Property with an NRI/PIO?

No. A foreign national of non-Indian origin cannot be a second or joint holder of immovable property purchased by an NRI or PIO.

6. Can a Foreign National Purchase Property in India?

• Non-Residents: Foreign nationals of non-Indian origin who live outside India cannot purchase any immovable property in India.

• Exception: They may lease residential accommodation in India for up to 5 years, without RBI permission or reporting.

7. Can Foreign Nationals Residing in India Purchase Property?

Yes, they may do so, subject to applicable approvals from local/state authorities. However, foreign nationals who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan must obtain prior approval from the RBI.

8. Can a Foreign Company Buy Property in India?

Yes, a foreign company with a registered branch or place of business in India under FEMA regulations can purchase property necessary for its operations.

• Payment must be made via foreign inward remittance.

• A declaration (Form IPI) must be filed with RBI within 90 days.

• The property may be mortgaged to an authorized dealer.

• Liaison Offices are not allowed to purchase property but may lease for up to 5 years.

9. Can Property Be Acquired by Way of Gift?

Yes.

• NRIs/PIOs may receive residential or commercial property as a gift from: 1. A resident of India, 2. Another NRI or PIO

• Foreign nationals of non-Indian origin cannot acquire property by gift.

10. Can Property Be Inherited?

Yes. A person residing outside India (NRI, PIO, or foreign national) can inherit immovable property from:

• A resident of India

• Another person residing outside India (provided the original acquisition complied with FEMA rules)

11. Can NRIs/PIOs Sell Their Property in India?

Yes

• NRI: Can sell property to a resident, NRI, or PIO.

• PIO: Can sell to a resident, NRI, or PIO (RBI approval required in the last case).

• Foreign nationals: Can sell only with RBI approval.

12. Can Agricultural Property Owned by NRIs/PIOs Be Sold?

• NRI/PIO: May sell to a resident Indian citizen only.

• Foreign national: Needs prior RBI approval.

13. Can Property Be Gifted?

• NRI/PIO: May gift residential/commercial property to a resident, another NRI, or PIO.

• Foreign national: Requires RBI approval.

• Agricultural land/plantation/farmhouses can only be gifted to resident Indian citizens, and again, RBI approval is needed for foreign nationals.

14. Can Property Be Mortgaged?

• NRI/PIO:

o Can mortgage to an Indian bank or housing finance company (no RBI approval).

o Can mortgage to a party abroad (with RBI approval).

• Foreign national: Needs RBI approval to mortgage.

• Foreign company: Can mortgage to authorized dealer in India under general permission.

15. How Can NRIs/PIOs Pay for Property?

Payments must be made through:

• Inward remittance via banking channels

• Funds from NRE, FCNR(B), or NRO accounts

Cash, traveler’s cheques, or foreign currency are not allowed.

16. What if a Booking is Cancelled and a Refund is Issued?

Refunds (including interest) can be credited to the NRE account if the original payment was made via inward remittance or NRE/FCNR(B) account.

17. Can Sale Proceeds Be Repatriated?

• If property was purchased via foreign funds, sale proceeds can be repatriated up to the original investment, but only for two residential properties.

• If purchased using rupee funds, up to USD 1 million per financial year can be repatriated from the NRO account (tax compliance required).

• If acquired through inheritance/gift, proceeds must first be credited to NRO account; then up to USD 1 million may be remitted per year.

18. Can Embassies/Diplomats Buy or Sell Property in India?

Yes, with prior clearance from the Ministry of External Affairs. Agricultural land, farmhouses, and plantations are not permitted. Payments must be made through foreign inward remittance.

19. 🇮🇳 Can NRIs/PIOs Hold Property Bought When They Were Residents?

Yes. They can continue to hold and sell such property. Sale proceeds may be credited to the NRO account and repatriated up to USD 1 million/year (subject to compliance).

20. What About Properties Acquired Under FERA (Old Law)?

Foreign nationals who acquired property under FERA with RBI approval can continue to hold it but can transfer it only with RBI approval.

21. Are Residents of Certain Countries Treated Differently?

Yes. Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, and Bhutan—even if residing in India—must obtain prior RBI approval for acquiring or transferring property.

22. Who Determines Residential Status?

Not RBI. Residential status is determined by law, and individuals must be able to prove their status if questioned by authorities.