NRI Buying an Apartment in India: FEMA, TDS & PoA Guide
Can an NRI buy a flat in India? How funding, TDS, capital gains, Power of Attorney and repatriation work, explained by a RERA-registered firm active since 2003.
Written by
Justin
12 October 2026 · 8 minutes read
NRI Buying an Apartment in India: What FEMA, TDS and Power of Attorney Mean for You
An NRI or OCI can buy a residential flat anywhere in India without RBI approval, as long as the money comes through proper banking channels. The hard parts are tax deducted at registration, a Power of Attorney that holds up, and getting sale proceeds back abroad later. Sort these out before you sign, not after.
Buying a flat from abroad means dealing with paperwork a resident buyer never sees: foreign exchange rules, income tax deductions, bank certificates and state registration procedures, all meeting at the sub-registrar's desk. None of it is hard on its own. But one PAN that doesn't match your passport, or one missing CA certificate, can hold up a large remittance for weeks. This guide walks through it step by step, so you know what to line up before you commit.
Can an NRI buy an apartment in India without RBI approval?
Yes. NRIs and OCIs can buy residential and commercial property in India under FEMA's general permission, with no RBI approval. Payment must come from an NRE, NRO or FCNR(B) account, or by inward remittance. Cash is not allowed. Agricultural land, plantation land and farmhouses are off the table, unless inherited or gifted.
The process looks a lot like a resident's: agreement, payment, registration at the sub-registrar office, then property records (Khata, mutation, etc.) updated in your name. The friction sits in three places: proving your source of funds, tax at registration, and repatriation if you sell.
How should an NRI pay for the flat?
Account | What goes in | Repatriation | Good for |
|---|---|---|---|
NRE | Foreign earnings brought to India | Fully repatriable | The cleanest route for a self-funded purchase |
NRO | Indian income such as rent and dividends | Capped at USD 1 million per financial year | Paying EMIs or smaller amounts; plan ahead if you may sell later |
FCNR(B) | Foreign currency deposits | Repatriable | Buyers who already hold money in foreign currency deposits |
Most NRIs pay the down payment from NRE and take a home loan. Under RBI's loan-to-value rules, banks can lend up to 80% for loans between Rs 30 and 75 lakh, and up to 75% above Rs 75 lakh. EMIs can be paid from NRE or NRO. Whatever route you use, keep a paper trail of where the money came from. You'll need it if you ever want to send the proceeds abroad.
How much TDS applies when an NRI buys or sells?
It depends on who is selling.
Situation | Who deducts | What applies |
|---|---|---|
You buy from a resident Indian seller | You, as buyer | 1% TDS if the price is above Rs 50 lakh. Deposited with a PAN, no TAN needed. |
The seller is an NRI (you're buying from one, or you're the NRI selling) | The buyer | TDS on the full sale price, not just the gain: 12.5% plus surcharge and cess if held over 24 months, slab rates if held 24 months or less, and 20% if the seller's PAN isn't provided. A lower deduction certificate can reduce this. From 1 October 2026, individual and HUF buyers can deposit it with a PAN instead of a TAN. Company and firm buyers still need a TAN. |
One useful trick: an NRI seller can apply to the tax officer for a lower or nil deduction certificate before registration. This avoids TDS being cut on more than your real gain.
Note: the Income-tax Act, 2025 came into force on 1 April 2026 and renumbers many sections. Ask your CA for the current references.
What capital gains tax does an NRI pay on selling a flat?
Holding period | Type | Tax |
|---|---|---|
More than 24 months | Long-term | 12.5% without indexation, plus surcharge and cess |
24 months or less | Short-term | Taxed at slab rates |
The older "20% with indexation" option for pre-July 2024 purchases is generally available to resident individuals and HUFs, not NRIs. Have your CA compute the gain before you list the flat, not after you've signed the sale agreement.
How do I bring sale proceeds back abroad?
Sale proceeds first land in your NRO account. From there, you send the bank a package of documents. Here's what each one does:
Document | Issued by | Why it matters |
|---|---|---|
Form 15CB | Chartered Accountant | Certifies the tax position on the remittance |
Form 15CA | You, filed online | Declares the remittance details to the tax department |
TDS certificate (Form 16A) | Buyer or buyer's bank | Proof that tax was deducted on your sale |
Registered sale deed | Sub-registrar | Proves the sale and the price |
Form A2 | Your authorised dealer bank | The foreign exchange remittance application |
Original purchase deed | Sub-registrar of the original purchase | Establishes your cost for the capital gains calculation |
From NRO you can remit up to USD 1 million per financial year. Repatriating sale proceeds of residential property is also limited to two such properties. Once documents are clean, it usually takes a few working days to a couple of weeks. The classic delay is a name or PAN mismatch between your tax records and your passport/OCI details, or a 15CA and 15CB that don't match each other.
Can an NRI register a flat through Power of Attorney?
Yes, if you can't be in India for registration. The PoA is signed before a notary (or the Indian embassy/consulate) in the country where you live, apostilled or attested as that country requires, and then stamped and registered as the state's rules require.
A vague "do everything" PoA is the one that gets challenged. A good one names the property, the transaction, the account the money moves from, and the attorney with full ID details. It should also clearly cover purchase, registration and property record transfer. Get a property lawyer to draft it, not a template.
Home loan deductions and rental income for NRIs
Item | What applies |
|---|---|
Principal repayment (Section 80C) | Deduction up to Rs 1.5 lakh, old tax regime only |
Interest on loan, self-occupied (Section 24(b)) | Deduction up to Rs 2 lakh, old tax regime only |
Rental income | Taxed at slab rates. Your tenant must deduct TDS on rent paid to an NRI. |
If you choose the new tax regime, you give up the loan deductions. Rent also looks thinner after tax than the gross yield suggests, so model the after-tax return against other uses of the same money before you commit, not after. Section numbers above follow the older Act; confirm current references with your CA.
What checks should an NRI run before buying?
Project registered with the state RERA (e.g. K-RERA in Karnataka, MahaRERA in Maharashtra)
Encumbrance certificate for at least 30 years, from the state registration portal
Latest property tax receipts and updated property records in the seller's name
Sanctioned building plan, commencement/occupancy and completion certificates
Clean chain of parent documents, reviewed by a local property lawyer
Stamp duty, registration fees and online portals differ by state, so always check the current rates and process for the state where the flat is.
What documents are needed at registration?
Category | What to carry |
|---|---|
Identity | Passport with valid visa or OCI card, PAN, passport-size photographs |
Money | NRE or NRO account proof, stamp duty and registration fee receipts |
Property | Agreement to sell, property records (Khata or equivalent), encumbrance certificate, parent documents, RERA registration of the project |
If you're not present | Registered PoA, with the attorney's ID |
Other | Proof of overseas residence (utility bill or driving licence), TDS certificate if applicable |
Document submission is increasingly online in many states, but the registration appointment itself is still in person. The buyer or attorney has to be there.
What has changed recently?
New income tax law: the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, so section numbers you see in older articles may have changed.
Capital gains reset: since 23 July 2024, long-term gains on property are taxed at 12.5% without indexation for NRIs.
TAN no longer needed for most buyers from an NRI: from 1 October 2026, a resident individual or HUF buying from an NRI seller can deposit TDS using a PAN. Company and firm buyers still need a TAN.
Local records are moving online: in Bengaluru, for example, the Greater Bengaluru Authority replaced the BBMP in September 2025, and property records now sit on its portal. Other cities are digitising too, so check the local process.
Your next 90 days
Check your PAN is linked and matches your passport/OCI details.
Open or verify your NRE/NRO account.
Run the RERA check on the exact project.
Get a purpose-specific PoA drafted if you won't be in India.
Have a lawyer review the title documents.
If selling, start documentation at least 60 days ahead, since your CA has to compute the gain and certify it for Form 15CB.
Frequently asked questions
Can an NRI buy an apartment in India without RBI approval?
Yes, through FEMA's general permission, with payment via NRE, NRO, FCNR(B) or inward remittance. No cash.
How much TDS applies when an NRI buys from a resident seller?
1% if the price is above Rs 50 lakh, deposited with a PAN.
What is the LTCG tax rate for an NRI selling a flat?
12.5% without indexation for property held over 24 months, plus surcharge and cess.
How much can an NRI repatriate from sale proceeds?
Up to USD 1 million per financial year from NRO, with Forms 15CA and 15CB. Sale proceeds of residential property are limited to two properties.
Can an NRI register a flat through Power of Attorney?
Yes, with a properly apostilled or attested, stamped and registered PoA that is specific to the transaction.
This article is for general education and is not legal advice.