Under FEMA (1999), NRIs and PIOs can buy any number of residential or commercial properties in India without RBI permission, paying only through NRE/NRO accounts or foreign remittance — agricultural land, plantations and farmhouses need special RBI approval. Long-term capital gains (held over 2 years) are taxed at 12.5% with 20% TDS; NRIs can repatriate up to USD 1 million per year. Chennai, Hyderabad and Bengaluru top the best-city list for 2026.
Quick answer: NRIs face no RBI hurdle to buy Indian residential or commercial property, but payment must flow through an NRE/NRO account or inward remittance — cash purchases above ₹20,000 and agricultural land are both off-limits. Selling after two years triggers 12.5% long-term capital gains tax with 20% TDS withheld at source (short-term sales are taxed at slab rate with 30% TDS), and up to USD 1 million a year can be repatriated from proceeds. SBI, HDFC and ICICI all offer NRI home loans up to 80% of property value at 8.5-9.5% in 2026, repayable from NRE/NRO/FCNR accounts. For 2026, Chennai (highest NRI population), Hyderabad (lowest per-sqft prices), Bengaluru, Kochi and Coimbatore are the five cities Propspedia data points to for NRI investment.
Can NRIs Buy Property in India?
Yes. Under FEMA (Foreign Exchange Management Act) 1999, NRIs and PIOs (Persons of Indian Origin) can purchase any number of residential or commercial properties in India without RBI permission. Agricultural land, plantation property, and farmhouses require special RBI approval.
FEMA Rules for NRI Property Purchase 2026
- Payment must be through NRE/NRO account or inward remittance in foreign currency
- No cash payments allowed (₹20,000+ cash restriction applies)
- Home loan allowed through Indian banks (repayment via NRE/NRO account)
- Power of Attorney (PoA) allowed for purchasing on your behalf
Tax on NRI Property in India
| Transaction | Tax Rate | TDS Rate |
|---|---|---|
| Short-term capital gain (< 2 years) | As per income slab | 30% + surcharge |
| Long-term capital gain (> 2 years) | 12.5% (indexed) | 20% + surcharge |
| Rental income | As per slab | 30% (payer deducts) |
Repatriation Rules
NRIs can repatriate up to USD 1 million per financial year from sale proceeds of property purchased through NRE account or inward remittance. Sale of property purchased via NRO account has different limits — consult a CA.
Best Cities for NRI Investment 2026
- Chennai — highest NRI population, OMR / ECR corridors
- Hyderabad — lowest prices per sqft, highest IT employment growth
- Bengaluru — Whitefield, Sarjapur Road; strong resale market
- Kochi — Gulf NRI favourite; Marine Drive, Kakkanad
- Coimbatore — affordable, strong rental demand from textile/IT sectors
NRI Home Loan Options
SBI, HDFC, ICICI all offer NRI home loans. Loan amount up to 80% of property value. Repayment through NRE/NRO/FCNR accounts. Interest rates same as resident Indian — 8.5–9.5% in 2026.