Investing in real estate by Non-Resident Indians (“NRIs”) in their domicile country can be a rewarding endeavour for them in terms of finances as well as in terms of serving as a connection to their roots. If we consider the statistics, as per the India Brand Equity Foundation (“IBEF” a trust formed by the Indian Government), in terms of employment generation, the real estate sector is deemed to be the second-highest employment generator, implying the scope of expansion and growing demand of investment in land in India. As per the IBEF website, Foreign Direct Investment (“FDI”) in land in India stood at US$ 55.5 billion from April 2000 up to December 2022. With the rise in international real estate development, it is certainly expected that the same will provide potential growth opportunity to the Indian market and give rise to real estate investment in India. As the real estate sector in India is lucrative, NRI buying property in India has recently witnessed an exponential growth.

Notably, as per a report by IBEF dated May 2023, real estate investment in India is expected to attract a considerable amount of FDI over the coming two years, with capital infusion of US$ 8 billion expected by FY22. Given the underlying scope of growth, IBEF mentions on its website that real-estate investment in India presently attracts, and in future is expected to attract more NRI investment, in the short as well as the long term. As concerned viability for investment in land in India, Bengaluru is most favoured destination for NRIs, given that it is the IT hub of India, followed by cities such as Ahmedabad, Pune, Chennai, Goa, Delhi, and Dehradun.

Another rationale to the rise in interest of NRIs in Indian real estate other than investment opportunities is primarily due to emotional ties they have to their homeland, and diversification benefits. However, given the common question ‘Can NRI buy property in India?’ it is pertinent that along with the question about eligibility and the process involved, answering, ‘How can NRI buy property in India?’ shall also be answered in order to enable an NRI in making informed decisions and considering legal aspects is crucial for NRIs.

As India’s real estate sector evolves with time, it presents a multitude of investment opportunities, however, navigating the complexities of property investment by an NRI can be an overwhelming task. Through this write-up it is intended to succinctly while providing in the relevant detailed guide you to understanding the nuances of real estate investment in India.

Can NRI Buy Property in India?

Yes, an NRI can purchase property in India subject to certain conditions. As per Indian law, basis a person’s residential status they are classified as NRI. Under the Income Tax Act of 1961 (“IT Act”), an NRI is a person who has not stayed in India for a minimum of one hundred and eighty-two (180) days. However, under the Foreign Exchange Management Act, 1999 (“FEMA”), whether a person intends to be within or outside of India plays a significant role in establishing their residential status. As concerned eligibility for an NRI buying property in India, they are permitted under law to own properties, of residential, or commercial nature. However, it is important to note that the eligibility criteria may vary to a certain extent basis the intended use of the property in question.

Nonetheless a measure of good practise and to ensure a smooth and setback free transaction, at the time of considering an investment NRIs must adhere to the guidelines and regulations laid out by the FEMA and the Reserve Bank of India (“RBI”). As much as adherence to regulation is pertinent to have a successful transaction, it must be noted that NRIs cannot be expected to be aware of these regulations, or any specific laws. As the rules, regulations, and government guidelines may differ from state to state, it is essential that before making an investment a willing investor must consult an Indian lawyer who is adept in such matters, to ensure compliance and make informed property ownership decisions in India.

Legal Aspects and Regulations

As an NRI one must consider the fact that for an NRI buying property in India several legal aspects and regulations must be carefully considered and navigated through. Some of these conditions are as followed:

  • Foreign Exchange Management Act (FEMA): This Indian legislation governs foreign exchange transactions along with investments in India, which includes real estate related transactions. Keeping the said in mind, NRIs must comply with the same at the time of acquisition or disposition of real estate in India.
  • Reserve Bank of India (RBI) Guidelines: RBI being India’s central and apex banking body not only issues guidelines but also governs matters relating to NRI investments. Such guidelines for investment include real estate investment, including the purchase and sale of property in India, repatriation of funds, and the opening of bank accounts for NRIs.
  • The Income Tax Act, 1961: This legislation governs the aspects relating to capital gains tax, rental income tax, and deductions available to NRIs, it also includes tax implications with respect to real estate investments by NRIs.
  • The Transfer of Property Act, 1882: This statue governs law in relation to transfer of property in India. It also specifies and covers rules relating to sale, lease, and gift of real estate in India which will also be applicable on any NRI planning to carry out any of these matters in relation to property in India.
  • The Real Estate (Regulation and Development) Act, 2016 (RERA): It aims to govern real estate related matters and protects the interests of property buyers in India, including NRIs, mandating transparency, accountability, and timely delivery by developers.
  • Foreign Direct Investment (FDI) Policy: It is one of the most important government directives which govern and sets out the rules for foreign investment in Indian real estate.

In addition to the regulations mentioned above, every Indian state may further have its separate set of laws and regulations governing real estate in India which an NRIs should make themselves aware of before or at the time of investing. Therefore, to ensure a smooth and legally compliant process at the time of purchase of property an NRI should consult with legal experts specializing in NRI property investments.

Legal Due Diligence before Investing in Property

  1. Title Verification: Initially the property’s title is verified to confirm its legitimacy, which includes checking land records, previous ownership, if there is any encumbrances and legal disputes associated with such property. Along with the process of property search wherein property’s legal standing is verified.
  2. Document Review: An experienced legal expert with knowledge in the field of real-estate shall review relevant documents, such as property deeds, sale agreements, lease agreements, and other contracts in relation to the property in question, to ensure clear title and authenticity of the offer. Typically, at this stage discrepancies, if any, are identified and addressed.
  3. Regulatory Compliance: At this stage, the lawyers shall make sure that all legal compliances under Indian laws and regulations are being adhered.
  4. Due Diligence Report: The lawyer at this stage will typically assist in compiling a due diligence report to summarise the outcome of various document in relation to the property. This report will reflect and summarise the findings or potential issues or concerns which shall be addressed before proceeding with the investment.
  5. Negotiations and Remediation: In case any issues have been highlighted by the lawyers and identified during previous set of processes, then typically negotiations with the seller may follow to address these concerns or to negotiate favourable terms.
  6. Finalize Documentation: Upon resolution of issues, if any, the lawyer undertaking the matter will assist in finalization of documentation, which includes property related documents such as sale agreements, property deeds, and other legal contracts. Thereafter once finalized, such documents or agreements with respect to the property are registered with the relevant government authorities, and remaining legal formalities are completed.

Once the initial diligence, title check, and registration process are completed, the process is succeeded with meeting remaining compliances with respect to Indian property laws, tax regulations, and foreign exchange guidelines to complete the ownership.

How Can We Help You with Property Investments in India?

The NRIs in most cases do not have the best knowledge about the laws and regulations in India, so it becomes significant to hire a legal advisor or law firm with an expertise in NRI legal disputes and this is where A&A NRI legal advisory comes in.

If you are an NRI and plan making a property investment in India, then it might be advantageous for you to have an Indian law firm like A&A Advisory to provide you with legal services. Through its experienced legal team, we offer support on issues such as verifying land titles, scrutinizing deeds, observance of Foreign Exchange Regulations and registration of properties. In addition, A&A Advisory can assist and advise on FEMA legislation.

A&A NRI legal advisory is well equipped with ample experience to be able to defend NRIs concerning a property or disputes. We can also assist NRIs by administering a Power of Attorney since it may not be possible for the latter to be present physically during execution. Considering a lawyer like us, who understands Indian property laws and specific needs of an NRI is important for smooth and legal investment.


As it has been emphasized herein, for investment in Indian real estate markets, there is a need for proper deliberations as well as legal diligence for NRIs while chasing after property investments. Through this write-up, it has been highlighted how has complex legal and regulatory framework concerning property reversion, taxation, repatriation, and dispute settlement for NRI is in India. Good legal assistance helps NRIs make sound investment decisions without attracting risks and danger. Therefore, working together with qualified lawyers experienced in the Indian property and legal systems enables NRIs to take on the complexity in a confident manner. In summary, NRIs must take advantage of the available chances and opportunities within India’s real estate industry with proper legal assistance.

Frequently asked questions

1. Is it a good idea for NRI to buy property in India?

It is only important if you are an NRI to think whether to purchase the property for India or not depending on your aspirations and finances. Investment in property is done by some of them with a view towards ensuring their financial security during retirement, whereas others buy houses for personal purposes. You must undertake proper research, comprehend legal and financial consequences, consult experts, and make a plan of action accordingly. In addition, you need to consider aspects such as location, markets trends and potential rentals.

2. What kind of investment in real estate is permitted to non-resident Indians?

An NRI can put his or her money in any immovable property within the county. Nonetheless, investments into agricultural lands, farmhouses and plantations are prohibited.

3. Do NRI need Aadhar card to buy property in India?

As per Rule 114C, it is not necessary for an NRI to have an Aadhar card while buying or selling a property. He or she will just need to have an NRO account. Also, an Aadhar card for NRI with OCI is not at all mandatory. Just get your property documents verified by a legal expert for extra safety.

4. Can NRI sell their property in India?

An NRI can sell his/her residential or commercial property to either a person residing in India, another NRI or a person of Indian origin (PIO). One can also mortgage the property to an authorised real estate dealer or a financial institution dealing with home loans.