NRI Guide to Buying Property in Mumbai: 2026 Regulations & Tax Rules

Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) can freely purchase residential and commercial property in India. Under RBI and FEMA guidelines, they do not require special permission. However, they cannot purchase agricultural land, plantation properties, or farmhouses unless received via inheritance or gift.

Can NRIs Buy Property in India in 2026?

Yes. Non-Resident Indians (NRIs), Overseas Citizens of India (OCI), and Persons of Indian Origin (PIO) enjoy general permission from the Reserve Bank of India (RBI) to buy property under the Foreign Exchange Management Act (FEMA).

There is no limit on the number of residential or commercial properties an NRI can own. The buying process, stamp duty registration, and property rights are identical to those of resident Indian citizens.

What Types of Properties Can NRIs Purchase?

NRIs can buy:

• Residential properties (apartments, villas, bungalows).
• Commercial properties (offices, shops, showrooms).

NRIs cannot buy:

• Agricultural land.
• Plantation land.
• Farmhouses.

If an NRI wishes to acquire agricultural land, it is only permissible through inheritance or as a gift from a resident Indian citizen, subject to specific tax and regulatory clearances.

How Must NRIs Fund Property Purchases in India?

All financial transactions for acquiring real estate in India must comply with FEMA guidelines. Cash payments are strictly prohibited. The transaction must be funded through:

1. Non-Resident External (NRE) Accounts: Funds in this account are held in foreign currency and converted. Real estate investments funded via NRE accounts allow full repatriability of the principal and capital gains back to the foreign country.
2. Non-Resident Ordinary (NRO) Accounts: Used for managing income earned in India (e.g., rent, pension). Funds from NRO accounts can be used to buy property, but repatriation of sale proceeds is capped at USD 1 Million per financial year.
3. Foreign Inward Remittances: Direct wire transfers from overseas bank accounts into the developer's or seller's Indian bank account.

Do NRIs Need a Power of Attorney (PoA) to Buy Property?

While not legally mandatory, recommending a Power of Attorney (PoA) is standard practice for NRIs who cannot visit India for physical documentation.

A PoA allows a trusted local representative (family member, lawyer, or adviser) to complete activities on your behalf:

• Execution of the sale agreement.
• Presentation of documents for registration at the Sub-Registrar's office.
• Signing home loan agreements with banks.

To be legally valid in India, a PoA executed overseas must be signed in the presence of a consular officer at the Indian Embassy or Consulate and subsequently attested/adjudicated by the local District Collector's office in India within three months of receipt.

Can NRIs Get Home Loans in India?

Yes. The RBI permits Indian banks and housing finance companies (HFCs) to offer home loans to NRIs for residential property purchases.

Key conditions for NRI home loans:

• Loan-to-Value (LTV) Ratio: Banks typically fund 70% to 80% of the property value, requiring a 20% to 30% down payment from the NRI's own funds.
• Repayment: Must be made via EMIs auto-debited from NRE or NRO accounts.
• Tenure: Usually restricted to 10 to 15 years, depending on the applicant's age and income stability.

What Are the Tax Implications for NRI Property Owners?

1. Tax on Rental Income

Rental income earned from Indian properties is taxable under the Income Tax Act. Rent paid to an NRI is subject to a 30% Tax Deducted at Source (TDS) under Section 195, which the tenant must deduct and deposit with the tax department. NRIs can file returns in India to claim refunds if their total Indian income is below the taxable threshold.

2. Tax on Sale of Property (Capital Gains)

• Short-Term Capital Gains (STCG): Applies if the property is held for 24 months or less. Gains are taxed at the NRI's applicable income tax slab rates.
• Long-Term Capital Gains (LTCG): Applies if held for more than 24 months. Gains are taxed at 20% (plus applicable surcharge and cess) with indexation benefits.

When an NRI sells a property, the buyer is legally obligated to deduct TDS on the capital gains (or on the total sale consideration if a certificate of lower deduction is not obtained from the Income Tax department).

Checklist for NRI Buyers in 2026

Before executing a real estate transaction, ensure you compile:

• Valid Indian Passport or OCI Card.
• Permanent Account Number (PAN) Card (mandatory for real estate transactions in India).
• Attested Power of Attorney (if executing remotely).
• NRE/NRO checkbooks and bank statements.
• RERA registration verification for under-construction flats. Refer to our Ready to Move vs Under Construction comparison guide to understand current development timelines.

To explore premium residential listings suitable for NRI portfolios, visit the DHS Realtors Properties Page. You can also contact our international desk for virtual consulting.