NRI Investment Options: What Can You Invest In and Up to What Amount?

NRI Investment Options: What Can You Invest In and Up to What Amount?

If you are an NRI looking to buy property in India, this is a good time. The Indian property market has been hit by a small dip due to oversupply, and prices are between 10-30% down from their peak in 2017.

At the same time, the rupee declined 8% against the dollar between 2015–2020, meaning you would be paying less.

Though many NRIs are enthusiastic about investing in property in India, the questions we hear most often are regarding restrictions on NRIs buying property.

Let’s clear the air with a brief discussion.

NRI Property Investment: Salient Points and Restrictions

  • An NRI is free to buy property in India. There is no restriction on the number or type of properties they can hold (apartments, stand-alone buildings, land). However, they cannot buy agricultural land. This applies to NRIs both with or without an Indian passport (the latter commonly known as PIO). An NRI or PIO can inherit agricultural land and continue to own it.
  • An NRI can buy commercial property without any ceiling or restriction. This is a very good opportunity for investing in malls and plazas in Tier-I cities.
  • Foreign nationals from Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, and a few more countries cannot buy property in India.
  • The payment cannot be made in foreign currency or outside India. You cannot pay the local developer with a draft drawn on a bank abroad. You also cannot buy property from an Indian abroad through a private transaction. The purchase has to be through a stamp paper agreement enforceable in an Indian court.
  • If an NRI sells the property, the buyer will subtract TDS (tax deducted at source) at 20%. If the property is sold within two years of purchase, then TDS at 30% will be applicable.
  • Other than this, an NRI would have to pay LTCG (long-term capital gains) at 20% and STCG (short-term capital gains) at 30%, assuming the slab rate for STCG. That is the same rate as for any other taxpayer in the country. Like a resident Indian, if TDS is more than the final tax applicable, an NRI can ask for a refund through income tax return.
  • Know the restrictions on repatriation (when you move your money from your NRO account to your NRE account or overseas bank account) of proceeds from the sale of immovable property.
    • If you paid for the property in foreign currency via normal banking channels, your FCNR account, or your NRE account, then you can repatriate only the amount you used to acquire the property.
    • If you acquired the property through a home loan which you repaid via foreign inward remittance or funds held in FCNR a/c or NRE a/c, then you can repatriate an equivalent amount only. (This may be higher than the amount you would have used had you acquired the property by paying directly to the seller.)
    • However, when the proceeds from the sale are higher than stated in the above two conditions, then you can repatriate up to $1 million every financial year in India (April – March) to your NRE account/overseas bank account.

How useful was this post?

Click on a star to rate it!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?


For visitors, travel, student and other international travel medical insurance.

Visit or call +1 (866) INSUBUY or +1 (972) 985-4400