With the property prices booming almost every single year, the Indian property market is surely on surge. With sweeping changes in price, it has become an attractive investing option for the NRIs. NRIs as well as PIOs living abroad are finding investing in property as the new lucrative way of channelizing their investment, which otherwise would lie dormant in their bank accounts yielding almost zero benefits. However, buying / selling / renting properties by being physically present are not always possible for such kind of people. This calls for online property portals that make the task convenient as well as hassle free. Having said that, it becomes imperative to note that property buying / selling / renting is a very tedious task, which needs a lot of careful and meticulous paperwork. This means the process involves many intermediaries, agreements as well as a lot of money. To ensure that the investment goes as planned without any glitches, it is important for the NRIs and PIOs to search for experienced and authorised property dealers/portals that would provide them with zero defect and zero hassle property investment options. Before looking into the ways the online property portals can ease the property-buying task, let us have a look at the different property options as well as investment guidelines governing NRI investment in India.

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Buying / Acquiring Residential & Commercial Property

Non Resident Indians are eligible for buying residential & commercial properties in India without prior permission from the RBI. However, there are some exceptions such as-

• Agricultural land, plantations and Farmhouses need prior RBI permission


• For Persons Of Indian Origin who do not hold an Indian passport, any transaction in immovable property in India needs RBI sanction


• Form IPI7 as a declaration needs to be submitted to the Central Office of RBI within 90 days of the purchase or final payment of the purchased property


• Documents pertaining to the transaction such as agreements and clearance certificates along with the bank certificate pertaining to the purchase needs to be submitted with the form


• A PIO can acquire any immovable property through inheritance or as a gift from a resident of India, who in turn had acquired it as per the pertaining foreign exchange laws at the time


• Payments can be made from NRE/NRO accounts in India or through inward remittances in foreign exchange


• An NRI may acquire any immovable property as an inheritance from a person residing outside India who in turn had acquired such property from a person resident in India is an Indian resident or the property is under the provisions of the RBI regulations


• An NRI has to pay the registration as well as stamp duty fees at the time of purchase.


• An NRI is entitled to all benefits that an Indian resident can avail on the interest paid for home loan


• Since the income received in such case comes under the income from property head, the NRI needs to pay the applicable tax unless the country he is residing in has Double Tax Avoidance Agreement with India


• An NRI has a special advantage that is the amount paid as interest on the home loan is deductible from NRI’s taxable income, without any upper limit


• An NRI/PIO cannot transfer a commercial property by way of mortgage to a party residing outside India. A prior approval of the RBI is needed to do so.


• NRIs staying abroad can enter into a buying residential/commercial property agreement either through their relatives or by executing the Power of Attorney in their favour/favour of a lawyer.


• The Power of Attorney needs to be executed on a stamped paper in front of authorised authorities in the adopted country. The Power of Attorney cannot be drafted on an Indian Stamp Paper


• One can also grant the Power of Attorney to the developers for specific necessary times. This would ensure that there is no delay in mailing of documents to foreign address.

Renting Property

• Both NRIs and PIOs can let out immovable properties owned by them in India as per the RBI permission. The income earned from such renting out in the NRE account


• Such an income will be subject to income tax


• Any immovable property can be rented out, as per the RBI guidelines.


• NRIs and PIOs can avail of the rental income even if they do not have a NRO account. Applicable taxes need to be paid off and a certificate form a Chartered Accountant proving the eligibility of such remittance is required


• NRIs and PIOs can easily rent out their residential/commercial properties to person residing in India without seeking any permission from the RBI

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Documents needed for buying a property

NRIs and PIOs would require to fulfil certain criteria including specific documents in order to purchase an immovable property. They are-

• PAN card


• PIO card in case of PIO


• Passport in case of NRI


• Passport size photographs


• Address Proof

The mere acquisition of am immovable property does not attract any income tax. Any income generated by such property during the term of its ownership (in case of renting out( or any capital gains (both short and long) arising out of sale of part or whole of such property is taxable.

If the property is held for 3 or less than 3 years then it is short term capital gains which is to be included in their total income tax applicable as per the normal slab rates. If the property is held for more than 3 years it is a long term capital gain and is subject to 20% tax plus applicable cess. Both long and short term capital gains are taxable in the hands of NRIs.

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Loan Eligibility

• Both NRIs and PIOs are eligible for housing loans from authorised dealers or housing finance institutions in India that have the approval of National Housing Bank. Following conditions such as the quantum of loan, the period of repayment and margin money will be at par with a person residing in India.


• The loan shall be completely secured by equitable mortgage in terms of deposit of the title deed of the property.


• The loan amount shall not be credited to the NRE/NRNR/FCNR account of the NRI/PIO

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Tax Returns

If the NRI/PIO fulfils the criteria of having a taxable income in India above the basic exemption limit of INR 1.6 lac or has any short and long term capital gains from sale of assets or investment, he has to file income tax returns. It is to be noted that the enhanced exemption limit applicable to senior citizens and women is not applicable if the individual is an NRI/PIO.

Traditionally, NRIs can file tax returns through giving the power of attorney to a relative or a lawyer in India or by sending documents and forms to a tax expert in India who could file returns on his behalf. Nowadays, the easiest option available is to file tax returns online.

Investment in Real Estate can prove quite lucrative and best option but there are several drawbacks too, especially if one is physically not present at the scenario. One should be cautious enough as to securing a deal of buying / selling / renting out property. Following things should be strongly considered-

• Property name or Title:

The title of the property should be clear from any issues and the seller of the property should have the required rights to sell the property. This is especially true in cases where the property is inherited or is a joint one.



• No-Dues Certificate:

Always acquire a no-dues certificate so that there is no water/electricity or any kind of dues on the property before purchase. Obtain a No-Dues certificate from the seller of the property at the time of purchase.



• Bank Release Letter:

It is imperative to obtain any Bank Release letter from the concerned bank, where the property might have been mortgaged against any kind of previous loan



• Approvals and Permits:

The property in question should have all the approvals and permits from authorised civic bodies in terms of construction.

Whenever a NRI / PIO wants to invest in property in India, care should be taken to go through proper and established channels rather than going through hideous dealers and brokers who might provide misleading details and disputed properties. Always go for reputed developers who can provide you with a clear property title as well as can take care of the maintenance of the property even after purchase/renting out.