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Property Related Matters of NRIs/OCI Card Holders in India

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Property Related Matters

Possible property buyers who are not Indian citizens but are residents of India can legally buy property in India. A law known as The Foreign Exchange Management Act, 1999 (FEMA) regulates buying property in India by Non-Resident Indians (NRI), Persons of Indian Origin (PIO), as well as foreign citizens.

The property for sale cannot be on farmland or plantation property, because they can only be bought by farmers who are Indian citizens.

If you have many queries and confusion about this kind of sale, execution of Power of attorney (POA), home loan and tax matters related to investing in real estate in India for non-resident Indians (NRI then this article can guide you a little…

Who are NRIs?

Any person holding an Indian passport, who resides anywhere else in the world has been a resident of that country continuously for more than 180 days is considered as a Non-resident Indian (NRI).

Who are PIO and OCI? Are they able to buy Indian property?

Apart from NRIs holding Indian passport, any Person of Indian origin (PIO) who has a passport from another country but was an Indian citizen before or whose ancestors have been Indians until the fourth generation(that is, great grandparents), is considered a PIO. Exceptions in the list of current countries include Bhutan, China, Iran, Nepal, Pakistan, Afghanistan, Bangladesh, and Sri Lanka. Such people do not need an Indian visa to visit.

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An overseas citizen of India (OCI) is rather confusing. It is not dual citizenship because that is not allowed in India. OCIs have no voting rights in India and cannot hold any government or legislative position in India. The simplest term is an OCI is not an Indian citizen.

Currently, you can apply for OCI card only, because PIO has been discontinued. Transfer of PIO Card to OCI card is optional. You can apply for OCI card in exchange for a valid PIO card without any charges.

NRIs, PIOs, and OCIs can all buy residential or commercial properties in India.

What type of property is out of bounds for NRIs?

No NRI can buy agricultural or farmland or plantation property in India but they can inherit such kind of land or property.

What type of property is out of bounds for foreign citizens?

It is not possible for a foreign national resident outside India to buy immovable property in India.

However, foreign nationals who are resident in India (unless they are citizens of Afghanistan, China, Iran, Nepal, Pakistan, Bangladesh, Sri Lanka, or Bhutan) can buy immovable property in India without special approval from RBI. But if you fall in this category you should check with their lawyers before going ahead as you may need other approvals like one from the State Government, and so on.

What are the necessary documents/permissions for investing in real estate for Foreign Citizens?

You do not need RBI’s permission. But you do need certain documents. The documents required for buying property are as follows:

– OCI/PIO card (In case of OCI/PIO)

– Passport (In case of NRI)

– Pan card (Permanent account number)

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– Passport size photographs

– Address proof


An NRI or PIO can repatriate the proceeds from the sale of any immovable property in India only if:

  • The NRI/PIO bought the property as per the provisions of FEMA in force at the time of buying.
  • The amount repatriated should not exceed the amount paid for the property if the property was bought using foreign exchange remitted through normal banking channels or from funds from an FCNR (B) account.

An NRI/PIO may repatriate a maximum of USD one million per financial year if the following conditions are met:

  • From the balance of the NRO account if the property was bought using INR sources.
  • If the property was a gift, the money from the sale must be credited to an NRO account, and thereafter, can be repatriated
  • If the property was inherited from an India citizen, it may be repatriated by producing documentary evidence proving inheritance, an undertaking by the NRI/PIO, and a certificate by a Chartered Accountant as per the format specified by Central Board of Direct Taxes.

Repatriation of sale proceeds from a residential property is restricted to just two properties. A foreign national may repatriate sale proceeds even if the property was inherited from a person outside India with pre-approval from RBI. A citizen of China, Afghanistan, Pakistan, Bangladesh, Sri Lanka, and Iran must take RBI’s approval for repatriation of sale proceeds.

Investing in real estate in India for NRIs, PIOs, and OCIs is very possible if you adhere to these specific rules and regulations. It is best to seek legal advice before any final decisions so that Buy Residential Properties in India does not become a painful process.

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