Owning Property in India as a US-Based NRI: The Complete Rules

What you can and cannot buy

Permitted without any special approval: residential and commercial property, any number of units. Not permitted by purchase: agricultural land, plantation property and farmhouses — the FEMA bar that generations of NRIs test and re-confirm; inheritance and gift from residents are treated differently (you can inherit farmland you couldn't buy).

Payment rules are as important as property type: consideration must move through Indian banking channels — NRE/NRO/FCNR accounts or inward remittances — never foreign cash or unofficial channels. Joint purchase with resident family members is permitted; benami arrangements (buying in others' names) are illegal under a statute with teeth.

The tax layer: renting and selling

Rental income is taxable in India (file the Indian return; the standard deduction on house property applies) and reportable on your US return with foreign-tax-credit relief — the India-US treaty's machinery, not double taxation. Tenants paying NRI landlords have TDS duties that surprise both sides.

Selling is where paperwork peaks: buyers must withhold TDS at the NRI long-term/short-term rates on the full sale price (not the gain) unless you obtain a lower-deduction certificate from the tax department in advance — the certificate is the difference between waiting for a large refund and receiving your money. Capital-gains computation (with indexation where applicable) and the reinvestment exemptions (Sections 54/54EC-type routes) belong in a CA's hands the year you plan the sale.

Repatriating proceeds: through the NRO account under the USD one-million-per-year facility with Form 15CA/CB certification — see our inheritance guide for the identical machinery.

Managing from 8,000 miles away

The Power of Attorney is the workhorse: execute it at your Indian consulate in the US (their attestation process), then have it stamped/adjudicated in India per the state's rules — a properly executed PoA lets a trusted person register deeds, manage tenants and represent you. Scope it narrowly to the specific transactions; general PoAs over property invite misuse.

Verify before every transaction, remotely: most states' land records are digitized (encumbrance certificates, title entries, RERA registrations for new projects are all checkable online), and the RERA regime gives buyers of under-construction property enforceable rights and escrow protections. For ancestral or long-held property, periodic online title checks are the cheap insurance against the encroachment-and-forged-paper problems NRI property forums are full of.