From eligibility to taxes: What NRIs need to know before buying a home in India

Many Indians settled overseas eventually think about owning a home back in India. Thanks to simpler rules, easier digital payments, and a growing range of budget-friendly projects in bigger and smaller cities, this has become a realistic goal rather than a complicated one.Eligibility basicsAnyone classed as a Non-Resident Indian (an Indian citizen living abroad) or a Person of Indian Origin (a foreign passport holder with Indian roots) can buy residential property in India without needing special RBI clearance.The exception is farmland, plantations, and farmhouses, which still require separate approval.Money movement rulesAll payments must flow through recognised banking channels , NRE, NRO, or FCNR accounts , and cash deals aren't allowed. Money originally sent from abroad through NRE or FCNR accounts can be sent back overseas without restriction, up to what was originally invested.Rental earnings and profit sitting in an NRO account, however, can only be moved abroad up to one million US dollars a year, once taxes are settled.Getting a loanBanks like SBI, HDFC, ICICI, and Axis lend to NRIs on similar terms as resident buyers, generally covering 75–80% of the property's value at interest rates roughly between 8.5% and 9.5%.Applicants need to submit their passport and visa details, proof of income abroad, and sometimes a Power of Attorney if they can't attend the transaction in person.What about PMAY?The PMAY subsidy scheme is meant for resident Indians and isn't open to NRIs on their own.But if the purchase is made together with a resident family member , a parent or spouse, for instance , who meets the scheme's conditions, that person may still be able to claim the benefit.Good places to lookBudget-friendly, well-connected pockets are emerging around Pune, Hyderabad, Bengaluru, and Chennai, generally priced from about Rs. 35 lakh to Rs. 75 lakh.Smaller cities such as Coimbatore, Nagpur, Lucknow, and Jaipur are also drawing NRI buyers, often those with family ties there.Tax mattersRent earned from Indian property is taxed after a flat 30% deduction, and tenants must withhold 31.2% as TDS before paying rent. Selling the property also triggers TDS, deducted by the buyer. Any NRI earning rental income must file an Indian tax return, no matter how small the amount.With the right accounts, paperwork, and a city choice backed by real infrastructure growth, NRI investment in affordable housing can be a straightforward and rewarding step.Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.