For many Non-Resident Indians (NRIs), owning property in India remains an important way to maintain ties with their home country, invest in real estate or plan for future residence.However, the rules governing the purchase, acquisition, gifting, and transfer of immovable property in India are regulated under India’s foreign exchange laws and differ depending on the type of property and the individual’s residential status.There are also specific requirements regarding how payments for such transactions must be made and through which banking channels funds can be transferred.Let us examine the rules, exceptions, and payment procedures governing the acquisition and transfer of immovable property in India by NRIs.Type of propertyAccording to the ministry of external affairs’, an NRI can purchase or receive as a gift any immovable property in India, except agricultural land, a plantation property, or a farmhouse.Besides these exceptions, he can also transfer the property to an Indian resident, an NRI, or an overseas Indian.However, if the agricultural land, plantation property, or farmhouse is acquired through inheritance, it can be transferred only to Indian citizens permanently residing in India.Foreign nationals of non-Indian origin, who reside outside India, are not permitted to acquire any immovable property unless it is inherited from a person who was an Indian resident.In such a case, specific approval of the RBI is required, whose prior permission is mandatory for its transfer.A person can continue to hold any immovable property they acquired if they had acquired the property before becoming an NRI.Mode of payment for purchasePayment for the purchase of property by NRIs can be made either through an inward remittance (transfer of foreign currency directly from an overseas bank account to an authorised Indian bank), or through funds held in any non-resident account (NRE/NRO/FCNR) maintained in accordance with the Foreign Exchange Management Act, 1999 and Reserve Bank of India’s guidelines.The payment cannot be made either by traveller’s cheque or foreign currency notes, and no payment can be made outside India.
