NRI Buying Property in Bangalore: FEMA Rules, Loans, Tax and Documents

A large share of Bengaluru's homebuyers live in Dubai, Singapore, London or the Bay Area. If you are an NRI buying property in Bangalore, the good news is that the rules are clearer than most people expect. You do not need RBI permission to buy a flat, villa or residential plot. You do need to follow FEMA rules on what you buy and how you pay, and plan for tax and repatriation from day one.

This guide covers what you can and cannot buy, payment routes, home loans, power of attorney, TDS, repatriation and the documents you will need. Rules in this area change often, so check the latest before you buy and run the final structure past a CA.

NRI buying property in Bangalore: what you can and cannot buy

Under the Foreign Exchange Management Act (FEMA) and its non-debt instrument rules, NRIs (Indian citizens living abroad) and OCI cardholders (foreign citizens of Indian origin) are treated largely the same for property.

You can buy

• Apartments and villas, new or resale.
• Residential plots, for example in BDA or BMRDA-approved layouts.
• Commercial property such as office space or shops.
• Any number of properties. There is no cap on how many residential or commercial properties you hold.

You cannot buy

• Agricultural land.
• Plantation property.
• Farmhouses.

You can inherit these, but you cannot purchase them. This matters on Bengaluru's outskirts, where "farm plots" and "managed farmland" around Devanahalli, Kanakapura Road or Doddaballapur are often marketed to overseas buyers. If the land is agricultural, an NRI cannot buy it, whatever the brochure says.

Foreign citizens who are not OCIs generally cannot buy property in India without RBI approval, except through inheritance. Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan face additional restrictions.

How NRIs must pay

Payment has to come through normal banking channels. That means one of the following:

• Funds remitted from abroad through banking channels.
• Your NRE (Non-Resident External) account.
• Your NRO (Non-Resident Ordinary) account.
• Your FCNR(B) (Foreign Currency Non-Resident) account.

You cannot pay in cash, traveller's cheques or foreign currency notes. Keep every remittance record and bank statement, because the source of payment decides how much you can take back out later.

As a rule of thumb, money paid from NRE or FCNR accounts or fresh remittances is easier to repatriate. Money paid from an NRO account, which typically holds Indian income such as rent or dividends, falls under a separate annual limit.

Home loans for NRIs

Most Indian banks and housing finance companies lend to NRIs for buying property in India. The basics:

• Loan amount. Banks typically lend up to 75% to 90% of the property value depending on the loan size, in line with RBI's loan-to-value limits. Larger loans sit at the lower end.
• Tenure. Often up to 20 years for NRIs, sometimes longer for salaried applicants with some lenders.
• Disbursement. The loan is disbursed in rupees to the builder or seller, not to you abroad.
• Repayment. EMIs must come from your NRE, NRO or FCNR account, or through remittances from abroad. Rent from the Indian property can also be used.
• Documents. Passport and visa or OCI card, overseas address proof, employment contract and recent salary slips, overseas bank statements, and often a credit report from your country of residence.

Many lenders also ask you to appoint a resident co-applicant or a power of attorney holder in India to handle paperwork on your behalf.

Using a power of attorney

You do not have to fly in for every signature. A power of attorney (PoA) lets someone you trust, usually a parent or sibling in Bengaluru, act for you.

1. Draft the PoA with a lawyer in India and make it specific: name the property, the actions allowed (booking, signing the agreement, registration, loan documents) and limits.
2. Sign it abroad before an Indian embassy or consulate officer, or have it notarised and apostilled if your country is part of the Hague Apostille Convention.
3. Send the original to India. It generally has to be presented for stamping (adjudication) at the sub-registrar's office within three months of receipt in India.
4. Make sure the PoA holder takes certified copies and keeps the original safe for registration.

Avoid a general PoA covering all your assets unless you truly need it. For high-value property, a narrowly drafted specific PoA is safer.

TDS: who deducts what

This is where NRIs most often get caught out, because the rules depend on who is selling, not who is buying. Note that the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, so section numbers have changed, though most people still use the old ones.

NRI buying from a resident seller

If the property costs ₹50 lakh or more, you as the buyer deduct 1% TDS from the payment (old Section 194-IA, now under Section 393) and deposit it using your PAN. This is the same as for a resident buyer. You do not need a TAN for this.

Anyone buying from an NRI seller

If the seller is an NRI, the buyer, whether resident or NRI, must deduct TDS on the full sale price, not just the gain, at the rate applicable to the seller's capital gains (old Section 195). For a long-term holding, the base rate is 12.5% plus surcharge and cess, which can take the effective rate well above that. For a short-term holding, it is at slab rates, often 30% plus surcharge and cess.

The seller can apply to the Income Tax Department for a lower deduction certificate so TDS is limited to the actual gain. Buyers should insist on seeing this certificate before reducing deductions. Budget 2026 also removed the need for resident individual and HUF buyers to obtain a TAN for these deductions, allowing a PAN-based challan from 1 October 2026. Check with your CA how this applies if you are an NRI buyer yourself.

Repatriation: taking the money back out

If you sell later, how much you can send abroad depends on how you paid.

• Sale proceeds of up to two residential properties can be repatriated, limited to the amount originally paid in foreign exchange, or from NRE or FCNR accounts.
• Any amount above that, and any money from a property bought with NRO funds or inherited, can be moved out of your NRO account within a limit of USD 1 million per financial year, after taxes. This limit covers all NRO repatriation combined, not each property.
• Remittances need Form 15CA and, in most cases, a CA's certificate in Form 15CB.

Rental income from your Bengaluru property is taxable in India. Your tenant may need to deduct TDS before paying you, so the rent usually lands in your NRO account.

Documents checklist for NRI buyers

• Passport, with visa or OCI card.
• PAN card. Apply before you book; you will need it for TDS, loan and registration.
• Overseas address proof and Indian address proof if available.
• Passport-size photographs.
• Bank statements showing the source of payments (NRE, NRO, FCNR or remittance).
• Power of attorney, if someone is acting for you.
• For the property: title deed, encumbrance certificate, e-Khata on the e-Aasthi system (issued by the Greater Bengaluru Authority's city corporations, formerly BBMP), approved plan, RERA registration for new projects and the OC for ready ones.

Registration happens at the sub-registrar's office, with appointments and fee payments now handled through Karnataka's Kaveri 2.0 portal. Either you or your PoA holder must be present.

Buying from abroad works best when someone on the ground handles the checks you cannot do over a video call. Skyros Estates can shortlist projects, run document checks and arrange virtual or in-person site visits for your family in Bengaluru.