1. Understanding NRI Rights for Investment

The Reserve Bank of India (RBI) permits NRIs and Overseas Citizens of India (OCIs) to invest in immovable properties in India without prior approval. Key points include:

• Eligible Properties: NRIs/OCIs can purchase residential and commercial properties. However, agricultural land, plantation properties, and farmhouses are generally restricted unless inherited or gifted.
• Funding the Purchase: Investments must be made in Indian Rupees (INR) through funds maintained in Non-Resident External (NRE), Non-Resident Ordinary (NRO), or Foreign Currency Non-Resident (FCNR) accounts under FEMA and RBI regulations.

2. Legal Checklist for Buying Property from an NRI

When purchasing property from an NRI, it’s essential to ensure compliance with legal and taxation norms:

• Title Verification: Confirm the NRI’s legal ownership and that the property is free from encumbrances.
• Tax Deducted at Source (TDS): Buyers must deduct TDS at applicable rates on the sale consideration paid to the NRI seller.
• Repatriation Compliance: Ensure the transaction adheres to RBI guidelines for repatriation of sale proceeds by the NRI.

3. Benefits of NRIs Buying Property in India

Investing in Indian real estate offers several advantages for NRIs:

• Rental Income: Properties can generate rental income, which is repatriable after applicable taxes.
• Long-Term Appreciation: The Indian real estate market has shown consistent growth, offering potential for capital appreciation.
• Emotional and Cultural Connection: Owning property in India provides a tangible link to one’s roots and can serve as a residence during visits.

For detailed guidelines and updates, NRIs are advised to consult the official RBI website and seek professional legal assistance to ensure compliance with all regulations.