NRI Guide: Key Tips for Buying Property in India

Planning to invest in Indian real estate from abroad? Here’s everything an NRI needs to know before buying property in India.

Missing home? It’s only natural for NRIs to feel a connection to their roots. After all, your home
country holds cherished memories, and the desire to invest in it often goes beyond financial
motives. NRI real estate investment in India offers both emotional fulfillment and the chance to make wise financial decisions.

As India’s real estate market continues to thrive, it’s becoming an even more appealing choice for NRIs. From rising property values to government reforms, the market is set to offer high returns. But it’s not just about numbers.

Investing in property back home helps secure your future and creates a lasting connection with India for future generations.

If you’re thinking about buying property in India, whether for personal use or investment, this guide covers everything from legal requirements and top cities for investment to tax implications and expert tips for NRIs for a seamless buying experience.

Mahindra Lifespaces, with over 3 decades of expertise in the Indian real estate market, offers expert guidance for NRIs navigating the property-buying process, ensuring you make informed decisions every step of the way.

Why India Is a Great Place to Invest for NRIs

India has become a popular destination for NRIs looking to invest in property, offering great value and long-term gains.

1. Cities like Mumbai, Pune, and Bengaluru are seeing strong growth, fueled by expanding infrastructure, increasing job opportunities, and rising urbanization. This translates to higher property values over time, making it a rewarding choice for NRI home investment.

2. Mumbai offers robust rental yields thanks to its strong economy, while Pune has emerged as a tech hub with growing demand for residential properties. Bengaluru’s IT corridor and startup ecosystem make it an ideal choice for rental and resale value.

3. The introduction of the RERA (Real Estate Regulation and Development Act) has increased transparency in the Indian real estate market. This ensures that property transactions are safer, and buyers can trust their investments.

4. Furthermore, the current weak rupee strengthens the purchasing power of NRIs. With a favorable exchange rate, NRIs can make larger investments at lower costs, maximizing
the value of their NRI property buying in India.

With the right guidance, these factors combine to offer NRIs a unique opportunity for profitable property investment in India.

A Simple Step-by-Step Guide for NRIs Buying Property

Buying property in India as an NRI can be a smooth process if you follow these simple steps:

1. Get a PAN card: This is a mandatory requirement for any property transaction in India. Apply online via the Income Tax Department website. Ensure all details match your NRI status to avoid issues during registration.

2. Open an NRE/NRO account: NRE accounts allow you to repatriate funds, while NRO accounts manage income earned in India, including rental income.

3. Choose your city & developer: Consider key cities like Mumbai, Pune, or Bengaluru, and select a trusted developer.

4. Verify project approvals (RERA): Ensure the project is registered under RERA to confirm its legitimacy.

5. Appoint Power of Attorney (if needed): If you can’t be present in person, appoint a trusted legal representative.

6. Register the property: Finally, visit the local Sub-Registrar’s Office to register the property in your name. The documents required are – Sale deed, PAN card, proof of payment, and Power of Attorney (if applicable). Ensure that the sale deed clearly mentions all terms agreed upon with the developer, including delivery timelines, amenities, and penalties for delays.

7. Understand the tax implications: Consult a tax advisor to minimize your tax liability and ensure compliance with Indian property tax laws.

NRI Rules for Buying Property in India

• As per property laws for NRIs, an NRI can buy residential and commercial properties in India, but not agricultural land or farmhouses. Agricultural land and farmhouses are
  restricted for NRIs to preserve local farming interests and comply with government regulations.
• Payments must be made through NRE/NRO accounts or Indian-earned income.

Following these straightforward steps will help you navigate the property-buying process with ease.

What Documents Do NRIs Need? (Without the Legal Headache)

For NRIs looking to invest in property in India, having the right documents is key. Here’s a simple checklist:

• Passport & visa copy: A valid passport and visa to verify your NRI status.
• PAN card: Required for all property-related transactions.
• OCI/PIO card (if applicable): For NRIs who hold an Overseas Citizen of India or Person of Indian Origin card.
• Local Indian address proof (or Power of Attorney): This could be a utility bill or any official document proving your address in India. Alternatively, if you’re not physically present, you can appoint a Power of Attorney.

These documents are crucial to making sure your property transactions go smoothly and meet property laws for NRIs.

Where Should NRIs Invest? Top Cities You’ll Love

When it comes to NRI real estate investment, selecting the right city is key to maximizing returns. Here are some top cities NRIs should consider:

• Mumbai & Pune: These are key employment hotspots with high demand for residential and commercial properties. Mumbai's strong economy, along with Pune's booming tech
  industry, makes them ideal locations for high returns.
• Bengaluru & Hyderabad: Known for their strong rental demand, these cities offer excellent opportunities for investing in both residential and commercial properties. With
  a rising number of tech startups, the rental market is strong.
• Chennai: For those with a strong connection to their hometown Chennai offers an excellent option. The city is known for its thriving industries and stable property market,
  making it a favorite for those seeking home-town appeal.
• Tier-2 cities (Kochi, Ahmedabad etc): These emerging cities are rising fast, with growing infrastructure and increasing demand for housing. Kochi, with its coastal charm, and
  Ahmedabad, with its growing business sector, are both worth exploring.

Mahindra Lifespaces maintains a strong presence in all these major cities, providing NRIs with well-located and reliable investment opportunities. Selecting the right city for real estate
investment is one of the most critical decisions for NRIs.

Each city offers unique advantages, ranging from high rental yields to long-term appreciation potential. Virtual tours and end-to-end buying support by our team makes the process seamless
for NRIs.

What About Taxes? A Quick Heads-Up

When it comes to property transactions in India, yes, you may need to pay tax when buying or selling. However, taxes like TDS (Tax Deducted at Source) and capital gains tax apply, but there’s good news. You can claim refunds and potentially reduce the amount you owe by following legal procedures.

If you're selling a property, TDS is usually deducted from the sale price. However, with proper documentation, you might qualify for a refund. Likewise, capital gains tax may apply when selling a property, but there are exemptions and deductions available to lower the tax burden.

For instance, if you sell a property for ₹1 crore, a 20% TDS on long-term capital gains would amount to ₹20 lakhs. However, exemptions under Section 54 can significantly reduce this liability.

It's always wise to consult a trusted tax advisor who can help you navigate these taxes and ensure compliance. Alternatively, Mahindra Lifespaces can guide you through the process, making sure you understand the tax implications without any hassle.

Mahindra Lifespaces: Here to Help NRIs Every Step of the Way

Buying property in India has never been easier. With streamlined processes, NRIs can now invest from abroad with minimal hassle. Mahindra Lifespaces is committed to making this journey as smooth as possible, offering expert guidance every step of the way.

Whether you’re looking for a place to call home or a savvy investment opportunity, Mahindra Lifespaces offers the support and resources you need. From virtual site tours to legal assistance and after-sales service, we make sure all your needs are met, even if you’re halfway around the world.

Ready to invest in your dream property in India? Schedule a free consultation with Mahindra Lifespaces today and take the first step toward smart NRI real estate investment.

FAQs

What are the rules for NRI to buy a property in India?

NRIs can buy residential and commercial properties but not agricultural land or farmhouses. Payment must be made through NRE/NRO accounts or Indian-earned income. A PAN card is required, along with KYC documents. Power of Attorney can be appointed for transactions if the NRI is abroad. Ensure the property is RERA-compliant.

Is it a good idea for NRIs to buy property in India?

Yes, India remains a strong market for NRI real estate investment. With high growth rates in cities like Mumbai, Pune, and Bengaluru, the potential for long-term returns is strong. The weak rupee also increases the purchasing power of NRIs. With proper guidance, buying property in India is a great investment opportunity.

What documents are required for an NRI buying property?

For NRIs to buy property in India, the essential documents include:

• Passport copy
• PAN card
• OCI/PIO card (if applicable)
• KYC documents (for verification purposes)
• Indian Bank Account
• Indian address proof (or Power of Attorney, if applicable). These documents ensure compliance with property laws for NRIs.

How can an NRI avoid TDS on property sale?

NRIs can reduce or avoid TDS by obtaining a Lower Tax Deduction Certificate (LTDC) from the Income Tax Department. They can also adjust the TDS if their actual tax liability is lower than the TDS deducted by submitting an income tax return.

Can an NRI claim a TDS refund?

Yes, NRIs can claim a TDS refund if the TDS deducted on the property sale exceeds their actual tax liability. This can be done by filing an Income Tax Return (ITR) and providing the necessary documentation, including the TDS certificate.

What is the TDS rate for NRIs?

The TDS rate for NRIs selling property is typically 20% on long-term capital gains (property held for over 2 years) and 30% on short-term capital gains (held for less than 2 years). However, these rates may vary depending on Double Taxation Avoidance Agreements (DTAA) and other conditions.

Disclaimer: Tax rates are subject to change — always check the latest guidelines or consult a tax
advisor before proceeding.

How to protect NRI property in India?

NRIs can protect their property by ensuring that it is legally registered and compliant with RERA. They can also appoint a Power of Attorney to manage property matters in their absence. It's recommended to regularly check the property through trusted agents and legal advisors to
avoid complications.

Where should NRIs invest in India?

NRIs should consider investing in cities like Mumbai, Pune, Bengaluru, and Hyderabad, which are high-demand, high-return hubs for both residential and commercial properties. Emerging Tier-2 cities like Kochi and Ahmedabad are also rising due to increasing infrastructure and
business growth.