Priya (name changed) in Melbourne spent eight months shortlisting a 2BHK in Pune for her parents to eventually move into. She got the price right, the builder right, the RERA number checked. Then, three weeks before registration, her CA asked one question she had never considered: “Who is going to be the guarantor on your home loan?”
She did not have one. The deal nearly fell through, not because of the property, but because of a piece of the process nobody had mentioned in eight months of research.
That is the pattern with NRI real estate. The property search rarely goes wrong. The plumbing around it does.
⚡ Quick Answer
NRIs can buy unlimited residential and commercial property in India, alone or jointly, but not agricultural land, plantations or farmhouses without special government approval. A home loan needs a resident Indian guarantor and typically 20% of the cost as your own contribution. On sale, long-term gains (held over 24 months) are taxed at 12.5% without indexation, and TDS is deducted on the full sale price at that rate plus surcharge and cess, not a flat 20%. Short-term gains are taxed and withheld at your slab rate, up to 30% plus surcharge and cess. Repatriation runs through your NRO account, capped at USD 1 million a year for most cases, with an exception for the original foreign-funded investment in up to two residential properties.
Read – Top NRI Investment Options in India
What You Can and Cannot Buy
You can buy residential and commercial property, alone or jointly with a resident Indian or another NRI, and there is no cap on the number of properties. What you cannot buy, without specific RBI and government approval, is agricultural land, plantation property or a farmhouse.
One category deserves a harder look before you consider it at all: vacant land, especially on city outskirts. It carries real encroachment risk precisely because you cannot watch it, and if a dispute develops, resolving it from another country can take years and cost far more in legal fees than the land itself. If you do hold vacant land already, the protections that matter are documented in detail in our guide on protecting land from illegal possession.
Due Diligence: The Checklist That Actually Prevents Disputes
Before money moves, verify the title is clear and the seller’s ownership is undisputed, with no pending loans or litigation attached. Trace how the property has changed hands, and cross-check the documents shown to you against the municipal and revenue records directly, not just what the seller or broker hands over.
Get the sale agreement or gift deed properly drafted, and register the agreement to sale to prevent double-selling. For an under-construction property, confirm RERA registration and its validity, check the developer’s completed project history, and if it is commercial, ask for signed lease agreements or MOUs with prospective tenants rather than taking occupancy projections on faith. Physically inspect the property, or have someone reliable do it, and get independent legal advice rather than relying solely on the builder’s legal opinion, which is not neutral.
Plan the Power of Attorney Before You Need It, Not After
Almost every failed or delayed NRI purchase I have seen shares one root cause: the Power of Attorney was an afterthought, drafted in a rush once the deal was already moving. Draft it through the Indian embassy or consulate in your country of residence, then have it adjudicated in India through your representative. The whole process takes roughly two months and is not expensive, but it cannot be compressed into the final week of a transaction. Give a specific PoA, restricted to the named transaction, rather than a general one that hands over broader authority than you actually need.
The PoA is not paperwork you deal with once you find the property. It is paperwork that determines whether you can act on the property once you find it.
Loan Eligibility
You will typically need to fund around 20% of the property cost yourself, with the balance available as a loan. There is no cap on the number of home loans you can hold simultaneously, provided your income supports servicing all of them, but you will need a resident Indian guarantor, along with documentation covering residency, income, and bank statements from both India and your country of residence. Sort the guarantor question early. It is the single most common late-stage surprise in an otherwise smooth purchase.
Selling: The Tax Table Most Articles Get Wrong
This is the section where outdated content causes real financial damage, because the TDS mechanics changed materially after the July 2024 Budget.
| Holding period | Capital gains tax | TDS deducted by buyer |
|---|---|---|
| Over 24 months (long term) | 12.5% without indexation, plus surcharge and cess | 12.5% plus surcharge and cess, roughly 13% to 14.95% effective, on the full sale price |
| 24 months or less (short term) | Your applicable slab rate | Slab rate, up to 30%, plus surcharge and cess |
Two points that trip people up repeatedly. First, TDS is calculated on the entire sale consideration, not your actual gain, so a property bought for Rs 60 lakh and sold for Rs 1.5 crore has TDS withheld on the full Rs 1.5 crore. Second, indexation on the acquisition cost was removed for transfers on or after 23 July 2024, which raises the effective tax on older properties bought cheaply, even though the headline rate dropped from 20% to 12.5%.
If your actual tax liability is meaningfully lower than the default TDS, apply for a lower deduction certificate under Section 197 using Form 13 on TRACES, ideally through a chartered accountant, before the sale deed is signed. This typically takes a few weeks. Skip it, and the excess sits with the government until you file your return and wait out a refund cycle, commonly 12 to 18 months.
Read – How can an NRI transfer inherited property
Renting It Out
Rent flows into your NRO account without restriction and can be repatriated after tax. If your total Indian income, including rent, crosses the basic exemption threshold, you must file an Indian tax return, regardless of whether any tax is ultimately payable.
Currency Risk Is Not a Footnote
The AED, SGD or USD to INR rate on the day you remit for a purchase, and again on the day you repatriate sale proceeds years later, can move the real return on the deal by a meaningful margin either way. Build a buffer into your budget for adverse movement rather than treating exchange rate as background noise, and talk to an advisor who actually models currency exposure alongside the property numbers, not one who only prices the flat.
Read – NRI Real Estate Investments outside of India
Repatriating What You Sell
Sale proceeds must first land in your NRO account, regardless of how the property was originally funded. From there, the rules split by funding source. If you bought using rupee funds while resident, or inherited the property, the full proceeds are repatriable up to USD 1 million per financial year, with no cap on the number of properties. If you bought using foreign currency remitted through an NRE or FCNR account, the original invested amount can be repatriated outside that USD 1 million cap, though this treatment is limited to a lifetime maximum of two residential properties; any gain above the original investment, and any properties beyond the second, fall under the standard annual limit.
Check – Estate Laws in India
Why the Guarantor Question Catches Careful People
Priya spent eight months on due diligence. She read every RERA filing. So why did the guarantor question surface three weeks before registration instead of month one?
Because of what is called the planning fallacy, the well-documented tendency to focus intensely on the visible, front-loaded parts of a plan, the property itself, the price, the negotiation, while underestimating the number of dependent steps buried later in the process. The purchase feels complete once the property is chosen. The financing, the guarantor, the PoA timeline and the repatriation structure are treated as details to sort out later, when they are in fact separate projects each with their own lead time.
The property search is the part everyone plans for. The infrastructure around it is the part that actually determines whether the deal closes on schedule.
Frequently Asked Questions
Can I buy agricultural land in India as an NRI?
Not without specific RBI and government approval, which is rarely granted for individual purchases. Residential and commercial property carry no such restriction.
Is TDS on my property sale really 20% flat?
No, not since the July 2024 Budget. TDS on long-term gains is 12.5% plus surcharge and cess, roughly 13% to 14.95% effective, on the full sale price. Short-term gains are withheld at your slab rate, up to 30% plus surcharge and cess.
Do I need a resident Indian for my home loan?
Yes, most Indian lenders require a resident Indian guarantor for an NRI home loan, alongside your standard income and residency documentation. Arrange this before you start negotiating a specific property.
How much can I repatriate after selling?
Up to USD 1 million per financial year through your NRO account for most cases. If the property was bought with foreign currency through an NRE or FCNR account, the original investment amount can move outside that cap, limited to two residential properties over your lifetime.
Should I give a general or specific Power of Attorney?
Specific, restricted to the named transaction. A general PoA hands over broader authority than a single purchase requires, and it becomes harder to control from abroad.
Planning a property purchase or sale in India this year?
We help NRIs sequence the financing, PoA, tax and repatriation steps in the right order, so the property is not the only thing that is ready on time.
The property you choose is rarely the reason a purchase stalls. The paperwork you postponed almost always is.
Plan the plumbing as carefully as you plan the price.
💬 Your Turn
If you have bought or sold Indian property from abroad, what caught you off guard, the loan guarantor, the PoA timeline, or the repatriation cap? Tell us below.
