NRI Property Investment: Legal, Tax, TDS, NRE/NRO & POA Explained

This is the article to read before you sign anything. The buying process itself is fairly mechanical; what actually catches NRIs off guard is the legal and financial layer underneath it — which bank account to pay from, how much tax gets withheld when you eventually sell, and whether your Power of Attorney will actually hold up. This guide walks through each of these, sourced from RBI, the Income Tax Department’s rules, and FEMA regulations as they stand in 2026. It is deliberately conservative about anything that could change — where a rule is in transition or genuinely case-specific, we say so rather than guessing.

This article is for general informational purposes and should not be treated as legal, tax or financial advice. Rules may change and NRIs should verify their specific situation with qualified professionals and official government sources before making a transaction.

For the buying process itself, see our NRI property buying guide for Gurgaon. If you’re managing this from outside India, our remote buying guide covers the logistics.

NRI vs OCI: Does It Change the Rules?

For property purchase, NRIs and OCI cardholders are treated broadly the same way under FEMA — both can buy residential and commercial property without RBI approval, and both are barred from purchasing agricultural land, plantation property or farmhouses (though both can inherit such land). If you hold an older PIO card rather than an OCI card, confirm its current status, since the PIO scheme has largely been folded into OCI.

PAN: Non-Negotiable

A PAN (Permanent Account Number) is required for any property transaction above the prescribed value threshold, for opening the bank accounts described below, and for filing an Indian income tax return if you earn rental income or eventually sell. Apply for it well before you need to sign anything — processing takes time from abroad.

NRE and NRO Accounts: What Each One Is For

An NRE (Non-Resident External) account holds income earned outside India and allows full repatriation of both principal and interest, in any currency, at any time. An NRO (Non-Resident Ordinary) account holds India-sourced income — rent, dividends, interest on Indian investments — and is subject to repatriation limits (below). Property purchase money must move through an NRE account, an NRO account, an FCNR account, or direct inward remittance from abroad — never cash, for any buyer, NRI or resident.

Which account you fund the purchase from matters later. Funds you eventually receive from selling the property generally get credited to an NRO account, and how much you can send back abroad from there is capped, unlike an NRE account.

TDS When an NRI Sells Property (Section 195)

This is the single most misunderstood part of NRI property transactions, and it applies to selling, not buying. Under Section 195 of the Income Tax Act, when the seller is an NRI, the buyer must deduct TDS on the transaction — and this is a materially bigger obligation than the flat 1% TDS a buyer deducts when purchasing from a resident Indian seller under Section 194-IA.

Broadly, gains on property held for more than 24 months are treated as long-term capital gains; gains on property held 24 months or less are short-term and taxed at slab rates. Following changes introduced in the Finance Act 2024 (effective for transfers after 23 July 2024), long-term capital gains on property are generally taxed at 12.5% without indexation, plus applicable surcharge and cess — though transition rules exist for property acquired before that date, so this is genuinely a case where you need current, personalised advice rather than a blog post’s number. Critically, TDS under Section 195 is calculated on the full sale consideration, not just the gain, unless the NRI seller has obtained a lower or nil-deduction certificate in advance. Note also that the buyer needs a TAN (not just a PAN) to deposit this TDS — a requirement many resident buyers aren’t aware of until their lawyer flags it.

Reducing TDS: The Lower Deduction Certificate

An NRI seller who expects their actual tax liability to be lower than the default TDS calculation can apply to the Income Tax Department for a certificate authorising the buyer to deduct TDS at a lower rate, or nil, based on the real computed gain. This has historically been filed as Form 13 under Section 197; under the Income Tax Act, 2025 (effective from 1 April 2026), the provision and form are being renumbered — expect to see it referenced as Section 395/Form 128 going forward, alongside the older numbering during the transition. Either way, apply for this well before the sale closes; it cannot be requested retroactively once TDS has already been deducted at the higher default rate.

Repatriating Money After a Sale

Sale proceeds are typically credited to an NRO account after applicable taxes are paid. From there, an NRI can generally repatriate up to USD 1 million per financial year (inclusive of all NRO repatriations, not just from property), after submitting Forms 15CA and 15CB, which require a chartered accountant’s certification. This limit applies regardless of how many properties were sold in that year. If you need to remit more than that in a single year, it requires specific RBI approval through your bank, rather than being available as a matter of course. Funds in an NRE account, by contrast, don’t carry this cap — which is part of why the account used to originally fund a purchase matters.

Power of Attorney: Getting It Right

Most NRIs who can’t be in India for signing or registration execute a Power of Attorney (PoA) in favour of a trusted representative. If signed abroad, it needs to be notarised locally, then either apostilled (for Hague Convention countries — covering the UAE, UK, US, Singapore, Canada, Australia and most common NRI locations) or attested by the Indian consulate (for countries outside the Convention). Once the PoA reaches India, it generally needs to be stamped within a set window after arrival, and — because it concerns immovable property — registered at the sub-registrar’s office covering the property’s location.

Keep the PoA’s scope specific to the transaction you’re actually completing. A broad, open-ended PoA is both a legal risk and, practically, something banks and registrars are more likely to question. Have it drafted by a lawyer familiar with Haryana’s registration requirements, not a generic template.

Registration, Stamp Duty and Title Verification

Registration in Haryana happens at the sub-registrar’s office covering the property’s location, through the HARIS system, with stamp duty calculated on whichever is higher — the transaction value or the government circle rate. Rates and the registration-charge cap are set by the Haryana government and revised periodically; confirm the current figures on the state’s official e-Grahes portal rather than relying on a fixed number from any article, including this one. Before registration, verify the seller’s title is clear, the property has no pending litigation or encumbrance, and — for under-construction property — that HRERA registration is current. Our worked example on verifying a pre-RERA project shows what this looks like when a property predates RERA entirely, and our note on what a builder floor buyer actually owns is relevant if you’re buying an independent floor rather than an apartment.

Joint Ownership, Nomination and Inheritance

NRIs can hold property jointly with another NRI or with a resident Indian relative; the specifics of succession, nomination and inheritance depend on personal law (which varies by religion and, for some situations, by whether a will exists) and are genuinely outside the scope of a general guide — this is a case to take to a lawyer who can look at your specific family and citizenship situation, particularly if the property may eventually pass to heirs who are themselves foreign citizens.

When to Involve a CA or Property Lawyer

Treat the following as hard triggers to get professional advice rather than relying on general information: applying for a lower/nil TDS deduction certificate; any sale where the acquisition date straddles a change in capital gains rules; repatriating above the standard limits; drafting or executing a Power of Attorney; and any inheritance or succession question involving property. A chartered accountant handles the tax filings and certificates; a property lawyer handles title, PoA and registration. For most NRI transactions, you’ll need both.

Looking for Property in Gurgaon?

If you’re based outside India and are evaluating property in Gurgaon, Gurgaon Floors can help you shortlist options and coordinate the practical side of a purchase — documentation coordination, developer liaison, and registration logistics — alongside your own CA and lawyer for the tax and legal advice itself. Get in touch with our team or call +91 98919 14003.

Frequently Asked Questions

Does an NRI need RBI approval to buy property in India?

No, for residential or commercial property. RBI’s general permission under FEMA covers this; only agricultural land, plantations and farmhouses require a different route (typically inheritance).

What is the TDS rate when a buyer purchases property from an NRI?

It’s higher than the 1% that applies to resident sellers and is calculated on the full sale value under Section 195, unless the NRI seller has a lower-deduction certificate. The exact rate depends on whether the gain is long-term or short-term and current surcharge/cess rules — confirm the applicable rate with a CA at the time of the transaction.

Can NRIs repatriate all the money from selling a property?

Up to USD 1 million per financial year from an NRO account, after taxes and with Forms 15CA/15CB filed; amounts above that require specific RBI approval through your bank.

Is a Power of Attorney signed abroad valid in India?

Yes, if properly notarised and then apostilled (for Hague Convention countries) or consular-attested (for others), followed by stamping and registration in India within the applicable timeframe.

Do NRIs pay the same stamp duty as resident Indians in Haryana?

Yes, residency status doesn’t change the stamp duty rate; it varies by buyer gender and the property’s value and location under Haryana’s current rules.

What is a lower deduction certificate and why does it matter?

It’s a certificate from the Income Tax Department authorising TDS to be deducted at a lower or nil rate, based on the seller’s actual computed gain rather than the full sale value. It must be applied for before the sale closes.

Can NRIs get an Indian PAN card from abroad?

Yes, NRIs can apply for a PAN through NSDL/UTIITSL’s online process without being physically present in India.

Sources & References

• Reserve Bank of India — FAQs on Acquisition and Transfer of Immovable Property in India
• Income Tax Department, Government of India — Section 195 and capital gains provisions
• Ministry of External Affairs — Acquisition and Transfer of Immovable Property in India (NRI/OCI guidance)
• Haryana Government — e-Grahes stamp duty and registration portal; HARIS registration system
• Haryana Real Estate Regulatory Authority (HRERA)

This article is for general informational purposes and should not be treated as legal, tax or financial advice. Rules may change and NRIs should verify their specific situation with qualified professionals and official government sources before making a transaction.