What NRIs Can (and Cannot) Buy in India
Under FEMA (Foreign Exchange Management Act) and RBI guidelines, NRIs can purchase:
NRIs cannot purchase without prior RBI approval:
This is the first clarification most NRI buyers need: the restriction is specifically on agricultural/plantation land, not urban residential plots. DTCP and CMDA-approved residential plots are fully available for NRI purchase.
OCI Card Holders: Same Rights as NRIs
Overseas Citizens of India (OCI card holders) have the same property rights as NRIs under FEMA regulations. They can purchase residential and commercial property with the same restrictions.
PIOs (Persons of Indian Origin, pre-2019 classification) who have obtained OCI cards are treated the same as NRIs.
How NRIs Fund Property Purchases in India
**From NRE account (funds from abroad):** Full repatriation of principal and any capital gains is allowed. Funds in NRE accounts are freely repatriable.
**From NRO account (India-earned income):** Repatriation of principal up to USD 1 million per financial year is allowed (under RBI's Liberalised Remittance Scheme for NRIs). Capital gains can be repatriated after paying applicable taxes.
**Through NRI home loans:** Multiple banks offer NRI home loans — HDFC, ICICI, SBI (International), Axis Bank. LTV up to 80%, tenure up to 20–25 years. Income proof in foreign currency required (last 6 months pay slips + employment contract/visa).
Documents NRIs Need for Property Purchase
Representing Yourself: The POA Path
Most NRIs buy through a trusted relative or lawyer using Power of Attorney. The POA must: 1. Be executed on stamp paper in India OR notarised and apostilled abroad 2. Specifically name the property address and authorise the specific transaction 3. Be adjudicated (duty paid) at the District Collector's office before use at SRO
This process takes 2–4 weeks from the time you sign the POA abroad to it being ready for use in India.
Tax Implications: What NRIs Pay
**Stamp duty on purchase:** Same as resident Indians — 7% + 1% in Tamil Nadu.
**TDS on rental income:** The tenant must deduct TDS at 30% from rent paid to NRI. NRIs must file Indian income tax returns to claim refunds or set off against expenses.
**LTCG on sale:** 12.5% LTCG, with TDS deducted by the Indian buyer at 12.5% of sale value. File ITR to claim Section 54F or 54EC exemption.
**STCG on sale:** Taxed at slab rate. TDS at 30%.
The Chennai Advantage for NRIs
Chennai is the top destination for Tamil diaspora investment — US, Singapore, UK, Canada, and Gulf NRIs. Several factors make Chennai particularly attractive:
Our team assists NRI buyers with complete documentation coordination, site inspection reports, and POA preparation guidance. WhatsApp us for NRI-specific assistance.