NRIs and OCI cardholders can buy residential and commercial property in India, including non-agricultural plots, without RBI permission and with no limit on how many. They cannot buy agricultural land, plantation property or a farmhouse. The only way an NRI or OCI can own farmland is by inheriting it, or by having owned it before becoming non-resident. You must pay through Indian banking channels, from an NRE, FCNR(B) or NRO account or a fresh inward remittance, never with traveller's cheques or foreign currency notes.
These rules come from FEMA's Non-debt Instruments Rules, 2019, as summarised in RBI's Master Direction No. 12/2015-16 on acquisition or transfer of immovable property (updated 1 September 2022). Here is what each part means in practice.
What property can NRIs and OCIs buy in India?
Para 3.1.1 of the Master Direction lets an NRI or OCI buy "any immovable property (other than agricultural land/ plantation property/ farm house)". In plain terms:
| Property type | Buy? | Receive as gift? | Inherit? |
|---|---|---|---|
| Flat, house, villa | Yes | Yes | Yes |
| Commercial property (office, shop) | Yes | Yes | Yes |
| Residential or commercial plot (non-agricultural) | Yes | Yes | Yes |
| Agricultural land | No | No | Yes |
| Plantation property | No | No | Yes |
| Farmhouse | No | No | Yes |
The Direction sets no cap on the number of properties you can buy. The two-property limit people mention applies to repatriating sale proceeds of residential property, not to buying it (more on that below).
A lease of up to five years is outside these rules altogether (para 1.1), so renting a flat or a shop on a short lease doesn't need any FEMA check.
Is the rule different for OCIs?
For buying property, no. RBI's Direction treats NRIs (Indian citizens living abroad) and OCI cardholders the same way throughout paras 3.1 to 3.3. One difference works in an OCI's favour: citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong and North Korea need RBI's permission to buy property in India, but para 9.2 says that bar does not apply to an OCI.
If your spouse is a foreign national who is neither an NRI nor an OCI, para 4 lets them buy one property (not agricultural land, a farmhouse or a plantation) jointly with you, provided the marriage is registered and has lasted at least two years before the purchase.
Why can't NRIs buy agricultural land or a farmhouse?
Because the rules exclude it, and the Direction gives individual NRIs and OCIs no general permission to buy it. A "farmhouse" on agricultural land falls in the same excluded category, even if it is sold as a weekend home.
Two routes do lead to an NRI or OCI owning farmland:
- Inheritance. Paras 3.1.3 and 3.1.4 allow an NRI or OCI to inherit any immovable property, including farmland. My guide to inheriting property in India as an NRI covers the steps.
- Land you owned while resident. Section 6(5) of FEMA lets a non-resident keep property they acquired while resident in India (para 1.2). If you bought farmland before moving abroad, you don't have to sell it when you leave.
Even then, you can sell or gift agricultural land, plantations and farmhouses only to a person resident in India (para 3.2).
On top of FEMA, several states have their own land-ceiling and land-reform laws that restrict who can buy or hold farmland, often limiting it to agriculturists or residents of that state. These rules differ by state and change over time, so check with a local property lawyer or the sub-registrar before any farmland deal, even an inherited one.
What if you move back to India?
The NRI rules apply to Indian citizens resident outside India. If you are an Indian citizen and return to live in India, you become a resident under FEMA and buy land like any other resident, subject to your state's land laws. The reverse also holds: farmland you buy as a resident can stay with you if you later move abroad, under section 6(5). An OCI cardholder who moves to India is still a foreign citizen, and this post doesn't cover that case; take advice from a property lawyer before buying land.
How do NRIs pay for property in India?
Para 3.3 is short and strict. Payment must come from:
- funds received in India through banking channels as an inward remittance from abroad, or
- a debit to your NRE, FCNR(B) or NRO account.
Payment "cannot be made either by traveller's cheque or by foreign currency notes". Cash you carried into India doesn't count, and nor does a payment made abroad to the seller.
The source you pay from matters later. If you ever want to send the sale proceeds back abroad freely, the property has to have been paid for in foreign exchange: an inward remittance or money from your NRE or FCNR(B) account. NRO-funded purchases can still be sold, but the proceeds go through the US$1 million per year route instead. See NRE vs NRO accounts for which money sits where.
Can you use a home loan?
Yes. NRIs can take rupee housing loans from Indian banks, and para 8.2 treats EMIs repaid from abroad or from your NRE or FCNR(B) account as foreign exchange for repatriation. EMIs paid from NRO don't get that treatment. My guide to NRI home loans covers eligibility, and the NRI home loan eligibility calculator shows how much you might borrow.
Can you receive property in India as a gift?
Yes, with limits. Para 3.1.2 lets an NRI or OCI receive any property except agricultural land, plantations and farmhouses as a gift from:
- a person resident in India, or
- an NRI or OCI who is a relative as defined in section 2(77) of the Companies Act, 2013.
So a resident parent can gift you a flat. A parent cannot gift you their farm while you are an NRI; it would have to wait for inheritance, or go to a resident family member.
On the income-tax side, the Income-tax Act, 2025 taxes property received without consideration if its stamp duty value is above ₹50,000 (section 92(2)(m)(ii)), but section 92(3)(a) exempts gifts from a relative. A gift from a non-relative friend is taxable in your hands as income. Gifts of money from parents, and the US Form 3520 side, are covered in money from parents in India.
The stamp duty value trap when you buy
The same section catches purchases below the stamp duty value. If you pay less than the stamp duty value and the gap is more than the higher of ₹50,000 or 10% of what you paid, the whole gap is taxed as your income (section 92(2)(m)(ii)(B)).
| Illustrative example | Case A | Case B |
|---|---|---|
| Price you pay | ₹80 lakh | ₹80 lakh |
| Stamp duty value | ₹92 lakh | ₹86 lakh |
| Gap | ₹12 lakh | ₹6 lakh |
| Allowed margin (higher of ₹50,000 or 10%) | ₹8 lakh | ₹8 lakh |
| Taxed as your income | ₹12 lakh | Nil |
Ask the sub-registrar's office for the circle rate before you agree a price, especially in resale deals.
Can you send the sale proceeds abroad later?
Usually, yes. Para 8.2 lets your bank repatriate the sale proceeds of property other than agricultural land, farmhouses and plantations when:
- you bought it in line with the foreign exchange law at the time,
- you paid for it in foreign exchange through banking channels, or from FCNR(B) or NRE (including home-loan EMIs paid that way), and
- for residential property, you repatriate the proceeds of no more than two such properties.
Anything that doesn't fit, such as an NRO-funded flat or a third residential property, goes through the Remittance of Assets route: up to US$1 million per financial year from your NRO account, with documents and Forms 145 and 146 (earlier 15CA and 15CB). Capital gains tax and TDS come first. The full process is in selling property in India as an NRI, and the TDS details are in TDS on NRI income.
Checklist before an NRI or OCI buys property in India
| Check | Why |
|---|---|
| Land is not agricultural, plantation or a farmhouse | Barred for NRI and OCI purchase; check the land-use record and conversion order |
| State land laws | Some states add their own limits on who can hold certain land |
| Pay from NRE, FCNR(B) or inward remittance | Keeps the proceeds repatriable later |
| Never pay in cash, foreign notes or traveller's cheques | Not allowed under para 3.3 |
| Price vs stamp duty value | A gap above the 10% margin is taxed as your income |
| Keep every remittance advice and bank statement | You'll need them to repatriate sale proceeds |
| Foreign spouse buying jointly | One property only; marriage registered for 2+ years |
| Track the count of residential properties | Repatriation of proceeds under para 8.2 is limited to two |
Common mistakes
- Buying a "farm plot" or farmhouse. If the land is agricultural on record, an NRI or OCI can't buy it, whatever the brochure calls it.
- Paying a relative in India to buy farmland "for you". The land is legally theirs, and holding it for you doesn't fix the FEMA bar.
- Paying the builder from NRO when you want to repatriate later. Use NRE, FCNR(B) or a fresh remittance.
- Handing over foreign currency notes or a cheque drawn abroad to the seller. Only banking-channel payments in India count.
- Treating an OCI card as foreign-national status. For property, an OCI living abroad is treated like an NRI, not like other foreign nationals.
- Thinking there's a limit on buying. The two-property limit is on repatriating residential sale proceeds, not on how many you buy.
- Ignoring the stamp duty value. A good price can create a tax bill.
More guides for NRIs buying, selling and inheriting in India are on the NRI hub.
