NRI · Law · The Propah POV
Can an NRI buy property in India — and what can’t you?
Yes. An NRI or OCI cardholder can buy residential and commercial property in India freely, with no RBI permission and no limit on how many. What you cannot buy is agricultural land, plantation property or a farmhouse — and that prohibition holds regardless of whether you pay with money already in India or money sent from abroad.
The short version
| Property type | Position |
|---|---|
| Residential | Freely permitted. No approval, no cap on number. |
| Commercial | Freely permitted. Same position. |
| Agricultural land | Cannot purchase. May inherit; may receive as a gift from a resident Indian. |
| Plantation property | Cannot purchase. Same exceptions. |
| Farmhouse | Cannot purchase. Same exceptions. |
What the law actually is
Two instruments govern this: the Foreign Exchange Management Act 1999, and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2018. Together they give NRIs and OCI cardholders a general permission to acquire immovable property in India — expressly excluding agricultural land, plantation property and farmhouses.
General permission means exactly that. You do not write to the RBI, you do not seek clearance, and no bank needs to approve the purchase itself. For residential and commercial property, the transaction is as ordinary as it would be for a resident.
The classification trap
This is where we see people get into difficulty, and it is worth being precise.
Whether land is “agricultural” is decided by what the revenue record says, not by what is happening on the ground. A plot that has not been farmed in twenty years, that sits between two apartment blocks, that everyone locally calls a site — if the record still classifies it as agricultural, it is agricultural for FEMA purposes until it has been formally converted to non-agricultural use.
“It’s converted” is a sentence, not a document. Ask for the conversion order and check the survey number on it.
DC conversion in Karnataka produces a specific order, for a specific survey number, for a specific extent. Sellers describe land as converted when an application has been made, when a neighbouring parcel was converted, or when they simply assume it. Any of those leaves an NRI buyer holding a purchase they were never permitted to make.
Inheritance — permitted, with one catch
You can inherit agricultural land, a plantation or a farmhouse. There is no time limit requiring you to dispose of it, and no approval needed to hold it. Families are often told otherwise.
The catch arrives when you sell. Inherited agricultural land can only be sold onward to someone who is both resident in India and an Indian citizen. Not to another NRI. Not to an OCI holder. That single condition shrinks the buyer pool considerably, and it is the reason inherited farmland so often sits unsold for years while a family assumes the market is simply weak.
Gift — narrower than inheritance
Agricultural land can be gifted to an NRI or OCI, but only by a person who is resident in India. A non-resident cannot gift agricultural land to another non-resident.
What matters is the donor’s residential status on the date of the gift. A father who was resident when he gifted is fine; the same gift made after he moved abroad is not. Where families have moved in stages, this is worth establishing rather than assuming.
How you are allowed to pay
The purchase money has to move through the banking system. Permitted:
- Funds from an NRE account
- Funds from an NRO account
- Funds from an FCNR(B) account
- Inward remittance through normal banking channels
Not permitted: cash, traveller’s cheques, foreign currency handed over outside the banking system, cryptocurrency, or informal transfer arrangements.
Which account you use is not an administrative detail. It governs what you can take out later, which is the next section and the one most people read too late.
The two-property rule nobody mentions
Buy with money from an NRE or FCNR account and the full sale proceeds can be repatriated when you sell — but that full-repatriation treatment is limited to two residential properties in your lifetime.
Buy with NRO funds, or inherit, and repatriation runs through the ordinary NRO route: up to USD 1 million per financial year, with taxes paid and Forms 15CA and 15CB in place.
Almost nobody planning a third or fourth Indian property knows about the two-property limit, because it only bites at exit and the people selling to you have no reason to raise it. If you intend to build a portfolio here and eventually take the money out, the account you buy from and the order you buy in are strategic decisions, not paperwork.
Nationality restrictions
Separately from residency, citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan require prior RBI approval to acquire immovable property in India. This is a citizenship test, not a residency one.
Importantly, it does not apply to OCI cardholders who happen to hold one of those citizenships. The OCI card is the operative status.
What getting it wrong costs
A contravention of FEMA can attract a penalty of up to three times the sum involved in the transaction. On a ₹2 crore parcel that is a ₹6 crore exposure, quite apart from the question of whether you own anything at all.
The practical risk is rarely deliberate. It is a buyer told the land was converted, who did not ask to see the order.
What this does not cover
- Foreign nationals of non-Indian origin who are not NRIs or OCI holders sit under a different and more restrictive regime. This piece does not address it.
- State law sits on top of FEMA. Some states restrict agricultural land purchase even by resident Indians, and those rules apply independently.
- Tax on purchase, holding and sale is a separate subject — see our piece on TDS and repatriation when you sell.
- Rules change. Everything here was checked in September 2026. Confirm your own position before you transact.
Can an NRI buy agricultural land in India?
No. Purchase of agricultural land, plantation property and farmhouses is prohibited for NRIs and OCI cardholders under FEMA, whether the money comes from within India or from abroad. You may inherit such property, and you may receive it as a gift from a resident Indian, but you may not buy it.
How many properties can an NRI own in India?
There is no limit on residential or commercial property. You can own as many as you wish. The limit that does exist is on repatriation: full repatriation of sale proceeds applies to a maximum of two residential properties in your lifetime, where the purchase was funded from NRE or FCNR sources.
Do I need RBI permission to buy a flat in India?
No. NRIs and OCI holders have general permission for residential and commercial property. Prior RBI approval is required only if you hold citizenship of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan — and that does not apply to OCI cardholders.
The seller says the land is converted. Is that enough?
No. Ask for the conversion order itself and check that the survey number and extent on it match the land you are buying. Classification follows the revenue record, not current use or local description. This is the most common way an NRI ends up in an impermissible purchase.
I inherited farmland. Can I sell it?
Yes, but only to a buyer who is both resident in India and an Indian citizen. You cannot sell it to another NRI or to an OCI holder. There is no deadline forcing you to sell, so holding while you find the right buyer is a legitimate strategy.
Can I pay for the property from my overseas account directly?
Yes, by inward remittance through normal banking channels, or from an NRE, NRO or FCNR(B) account. What you cannot do is pay in cash, in traveller’s cheques, in foreign currency outside the banking system, or through informal transfers. Keep the trail clean — you will need it to repatriate.
Position checked against multiple sources in September 2026 and stated by reference to FEMA 1999 and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2018. This is general information and not legal advice. Before transacting, have the specific documents reviewed by a lawyer, and confirm your tax position with a qualified professional.
Still deciding, or want this applied to your own situation?
Tell us where you are and we will come back to you. The first conversation is free, and we will tell you plainly if we are not the right people for it.
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Which account you buy from decides what you can take out.
Two residential properties, full repatriation. Everything after that runs through the USD 1 million route.
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