Buy or Sell Property in India From Abroad — Without the Guesswork

Under the general permission granted by FEMA (Foreign Exchange Management Act) regulations, most NRIs and OCI cardholders can purchase Indian property with far fewer restrictions than people assume. The confusion almost always comes from one category of land, not the rules as a whole.

In practice, most NRIs buying a home for visits, a retirement flat, or a commercial unit as an investment face no special restriction — the purchase proceeds exactly as for a resident buyer, apart from how payment is routed. Funds must move through your NRE, NRO, or FCNR(B) account, never as foreign currency notes, traveller's cheques, or cash. There is no ceiling on the number of residential or commercial properties an NRI may own.

Where a purchase does not fit neatly into these categories — inherited farmland you want to convert, land reclassified since acquisition, or property held jointly with a resident family member — the classification question needs settling before you sign anything, since it affects whether the purchase is permitted at all. We assess this at the outset of every purchase matter.

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Whether buying or selling, an NRI property transaction moves through the same broad sequence. Knowing which steps require your presence, and which can go through an appointed attorney-in-fact, removes most of the anxiety of managing this from a different time zone.

• Title Verification & Due Diligence: Before money changes hands, the chain of title (ideally 30 years or more), encumbrances, pending litigation, and — for under-construction property — RERA registration are checked. This is the step most NRI buyers skip under time pressure, and the one that causes the costliest problems later.
• Sale Agreement: A detailed agreement records the price, payment schedule, timeline to registration, and the conditions under which either party can walk away — this document, not the eventual sale deed, is what protects you if something goes wrong before registration.
• Lower/Nil TDS Certificate (Sellers): The Section 197 application is filed at this stage so the certificate is in hand, or at least applied for, before the buyer makes final payment and deducts TDS.
• Power of Attorney (If You Cannot Be Present): A Specific Power of Attorney — naming the exact property and acts authorised, notarised and apostilled (or Indian Consulate-attested) — lets your attorney-in-fact sign and register the sale deed on your behalf.
• Stamp Duty & Registration: The sale deed is executed and registered at the Sub-Registrar's office with jurisdiction, with stamp duty (typically 5–8%, varying by state) paid before or at registration.
• Mutation of Records: Local municipal or revenue records are updated to the new owner — often overlooked, but it matters for future tax assessments and any subsequent sale.
• Funds Movement & Repatriation: For a purchase, payment moves from your NRE/NRO/FCNR account. For a sale, net proceeds are repatriated to your overseas account within FEMA's annual limits once tax formalities are complete.

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NRIs are disproportionately targeted in Indian property fraud — as sellers whose vacant property is vulnerable to impersonation-based sale, and as buyers or sellers pressured into unsafe deal structures because distance makes it harder to push back. A few practices materially reduce that risk on both sides.

• Verify the buyer's funds, not just their word: Before accepting a token advance, ask for proof the buyer's payment will come through a traceable bank account in their own name — vagueness about the source of funds, or a request to route money through a third party, is a warning sign, not a convenience.
• Insist on banking-channel payment at every stage: Cash above ₹2 lakh for a single property deal is restricted under Sections 269SS and 269ST of the Income Tax Act, with penalties equal to the amount received — and an unbanked "cash component" cannot be recovered through any court if the deal later collapses.
• Never agree to under-report the sale value: Recording a lower price in the registered deed than what actually changes hands exposes both parties to tax proceedings, and permanently understates your recorded cost for any future tax computation.
• Use a narrow, specific Power of Attorney only: A blank or open-ended General Power of Attorney handed to a relative, broker, or "facilitator" is the single most common instrument used in NRI property fraud. A Specific POA names the exact property and acts authorised — nothing more.
• Tie registration and payment together: Full and final payment should be released alongside execution and registration of the sale deed, not on an informal promise that registration will "follow shortly."
• Get an independent legal opinion before any advance changes hands: A broker or the other party's lawyer works for someone else's interest — a title and agreement review from your own advocate is the cheapest insurance in the entire transaction.

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