Buying property in India: the NRI and OCI rules, explained
Part 4 of The NRI Money Guide. What an overseas Indian can and cannot buy back home, who needs RBI permission, why agricultural land is off-limits, and how much of the money you can take back out. Journalism, not advice — confirm your own position before you sign.
The NRI Money Guide — Part 4.
For most overseas Indians, buying property back home is the single largest financial commitment they will make to India — and the one most tangled in rules that change and trip people up. The good news, sourced to the primary regulations rather than to a broker's reassurance, is that the core position is simpler than the folklore suggests. The traps are specific and well-marked.
As with the rest of this series: this is an explainer, not financial or legal advice. The rules below are current at the time of writing, but confirm your own position and the latest position with your bank or a qualified adviser before you commit any money.
What you can buy without asking anyone
A non-resident Indian (NRI) or an Overseas Citizen of India (OCI) cardholder can buy residential and commercial property in India under a general permission — apartments, houses, buildable plots, offices, shops. No prior approval from the Reserve Bank of India is needed for these categories. The general permission is set out in the Foreign Exchange Management Act (FEMA) framework the RBI administers, and it covers the great majority of what a diaspora buyer actually wants.
There is no cap on how many residential or commercial properties you may own. Payment must be made through banking channels in India — from an NRE, NRO or FCNR account, or by normal inward remittance — not in foreign currency handed over directly, and not through travellers' cheques.
What is off-limits
The hard line is agricultural. An NRI or OCI cannot buy agricultural land, a plantation, or a farmhouse in India, under any general permission. This is the single most common and most expensive misunderstanding in the diaspora.
There are only two ways such land can end up in an NRI's hands legitimately: it was acquired while the person was still resident in India, or it came by inheritance from a person who was resident in India — and even then, local state land-ceiling laws apply. Acquiring farmland requires specific RBI approval, which is rarely given. Buying agricultural land in the belief it can quietly be reclassified later is how people lose both the land and the money.
RERA: the buyer's protection
If you are buying anything under construction, the developer must be registered under the Real Estate (Regulation and Development) Act — RERA — with the regulator in the relevant state. RERA registration is not a formality to wave through; it is the buyer's main protection against the classic Indian property risks of endless delay, mis-selling of carpet area, and title fraud. Check the project's RERA number before paying a booking amount, whether you are an NRI or a resident. Each state runs its own RERA authority and portal, so verify the registration with the regulator for the state the property actually sits in.
Getting the money back out
The rule most diaspora buyers forget until they sell: bringing money into Indian property is easy; taking the proceeds back out is governed.
Sale proceeds sitting in an NRO account can be repatriated up to USD 1 million per financial year, after applicable taxes are paid and Forms 15CA and 15CB are filed through a chartered accountant. For property that was originally bought with NRE or FCNR funds, the sale proceeds can be repatriated for a maximum of two residential properties in a lifetime; beyond that, RBI approval is required.
The practical takeaway is to keep the paper trail from the day you buy. The route the purchase money took in largely determines the route the sale money can take out, and reconstructing that a decade later, from abroad, is painful.
The cost of getting it wrong
FEMA is not a set of guidelines. Breaches — buying prohibited agricultural land, routing money outside banking channels, misrepresenting residency status — can attract penalties of up to three times the sum involved, and in serious cases confiscation of the property itself. The regulator's tolerance for "I didn't know" is low.
For the OCI cardholder in particular, the April–May 2026 overhaul of the OCI programme — which moved applications online and tightened compliance expectations even as it widened eligibility — is a reminder that the diaspora's paperwork with India is being watched more closely than it was a decade ago. Keep your OCI and passport details current; a property transaction is exactly the moment a mismatch surfaces.
The short version
You can buy residential and commercial property freely. You cannot buy farmland. Pay through Indian banking channels, keep every document, check the RERA number, and remember that repatriation is capped and taxed. Do those five things and the system works as intended. Skip any of them and it is unforgiving.
Next in the series: GIFT City and the new options — the tax-neutral routes India is building specifically for overseas money.
Sources: Ministry of External Affairs — Acquisition and Transfer of Immovable Property in India (PDF) · ICICI Bank — NRIs selling real estate: repatriation rules · Fragomen — India's new OCI rules. Rules current at time of writing; confirm your own position with your bank or a qualified adviser.
