An engineer working in Dubai wanted to buy a flat in Bengaluru for his parents in 2025, and assumed it would be as simple as wiring money to the builder. It was not. He learned that he could not pay in cash or straight from his overseas account, that his home loan EMIs had to flow through a specific type of Indian bank account, and that if he ever wanted to send the sale money back abroad, the rules on how much and from where would depend on how he had funded the purchase in the first place. None of it was especially hard, but all of it had to be done correctly.

Buying property in India as an NRI is entirely allowed, but it runs on a set of foreign exchange rules that a resident buyer never has to think about. This guide explains what an NRI can and cannot buy in Bengaluru, how payment must be made, how home loans and repatriation work, and where a power of attorney fits.

The short answer. Under FEMA, an NRI can freely buy residential and commercial property in India, including plots in approved layouts, but not agricultural land, plantations, or farmhouses, as a FEMA guide for NRIs sets out. Payment must be in Indian rupees through banking channels, from an NRE, NRO, or FCNR account or an inward remittance, never in cash. The trade-off to remember: the purchase itself is straightforward, but which account you fund it from decides how freely you can repatriate the sale proceeds later, so plan the money route from the start.

What can an NRI buy in Bengaluru?

An NRI can buy residential and commercial property in Bengaluru without needing RBI approval, including apartments, houses, commercial spaces, and residential plots in approved layouts. There is no cap on the number of such urban properties an NRI may own. So for the great majority of buyers, a flat or a plot in a sanctioned layout, the purchase is as open to an NRI as to a resident.

The clear exceptions are agricultural land, plantation property, and farmhouses, which an NRI cannot purchase without special RBI permission that is rarely granted. This restriction does not apply to such property received through inheritance or as a gift from a resident or another NRI. So the rule to remember is simple: ordinary residential and commercial property in the city is fine to buy, but agricultural land, plantations, and farmhouses are off limits unless they come to you by inheritance or gift.

How must an NRI pay for the property?

All payment must be made in Indian rupees through authorised banking channels, and cash is not permitted. The acceptable sources are an inward remittance from abroad, or funds held in an NRE, NRO, or FCNR account. Paying in cash, or directly from a foreign bank account without routing through these channels, is not allowed under the foreign exchange rules, and cryptocurrency or informal transfers are firmly out of bounds.

The choice of account is not just a formality; it shapes what you can do later. An NRE account is funded by your foreign earnings and allows the full sale proceeds to be sent back abroad in future, while an NRO account is funded by your Indian income and carries a cap on how much can be repatriated each year. Deciding early which account funds the purchase is therefore one of the most important planning steps, because it quietly sets your repatriation rights years before you might sell.

Can an NRI take a home loan, and how are EMIs paid?

Yes, an NRI can take a home loan from an Indian bank or housing finance company, on broadly the same basis as a resident, though at a slightly higher interest rate. The key rule is on repayment: the EMIs must be paid through an NRE, NRO, or FCNR account, and paying directly from a foreign bank account would breach the foreign exchange rules. So a loan is available, but the repayment has to be routed through the correct Indian account.

This ties back to the payment rules already covered. Whether you fund the down payment by remittance or from an NRE or NRO account, and whichever account services the EMIs, everything must move through the banking system in rupees. Setting up the right NRE and NRO accounts before you start the purchase makes the whole process, from down payment to EMIs to any future repatriation, run smoothly rather than as a scramble to comply after the fact.

How does repatriation of sale proceeds work?

How much of a future sale you can send abroad depends on how the property was bought and which account you use. If the property was purchased with NRE or FCNR funds, the entire sale amount can be repatriated, subject to a lifetime limit of full repatriation on two residential properties. If it was funded through an NRO account, repatriation is capped at one million US dollars per financial year, along with the documentation the bank requires.

This is why the funding decision made at purchase matters so much at sale. An NRI who funds a home through an NRE account and stays within the two property limit preserves the ability to take the full proceeds abroad later, whereas one who routes everything through an NRO account lives with the annual cap. Repatriation also involves specific tax and banking paperwork at the time of transfer, so it is worth planning with an adviser well before you sell rather than at the last moment.

How do the account types compare for an NRI buyer?

The table below sets out the main funding routes and what each means for repatriation.

Read across and the theme is consistent: money that came from abroad, through NRE or FCNR, repatriates freely, while money from Indian income, through NRO, is capped. Matching your funding route to your likely future plans for the proceeds is the single most useful piece of planning an NRI buyer can do, and it costs nothing but a little forethought before the first payment leaves your account.

Where does a power of attorney fit for an NRI?

Because an NRI often cannot be present in Bengaluru for registration, a power of attorney is commonly used to let a trusted person sign on their behalf. This is legitimate when the power of attorney is properly executed and the sale is still completed by a registered sale deed, which is the document that actually transfers ownership. A power of attorney is a convenience for signing, not a substitute for the registered deed.

The NRI buyer also carries the ordinary buyer duties. Where the purchase crosses fifty lakh, the buyer must deduct tax at source and file the return within the deadline, and using a power of attorney does not remove that obligation. So an NRI should give the power of attorney to someone reliable, insist that the property is transferred by a registered sale deed, and ensure the tax and banking steps are handled correctly on their behalf.

What is the step by step for an NRI buyer?

Work through this order when buying from abroad:

1. Confirm the property is residential or commercial, not agricultural, plantation, or a farmhouse.
2. Open the right NRE and NRO accounts before you begin the purchase.
3. Decide which account funds the purchase, since it sets your repatriation rights.
4. Pay only in rupees through banking channels, never in cash or from a foreign account.
5. If borrowing, arrange the home loan so EMIs flow through an NRE, NRO, or FCNR account.
6. Where you cannot attend, give a reliable person a proper power of attorney to sign.
7. Ensure the tax at source and registered sale deed are handled correctly on your behalf.

An NRI purchase brings the resident buyer duties too. Understand the tax you must deduct with our guide to TDS on a property purchase, and use a power of attorney safely by reading why a registered deed still matters in our explainer on power of attorney property sales. If you are considering a specific project such as Prestige Park Lane in Devanahalli, plan the account and repatriation route before you commit.

Frequently asked questions

Can an NRI buy property in Bengaluru?

Yes. Under FEMA an NRI can freely buy residential and commercial property in Bengaluru, including plots in approved layouts, without RBI approval, and there is no cap on the number of such urban properties. The exceptions are agricultural land, plantation property, and farmhouses, which an NRI cannot buy without special permission that is rarely granted.

How must an NRI pay for a property in India?

Payment must be in Indian rupees through authorised banking channels, never in cash. Acceptable sources are an inward remittance from abroad or funds in an NRE, NRO, or FCNR account. Paying directly from a foreign bank account, or through cryptocurrency or informal transfers, breaches the foreign exchange rules. Home loan EMIs must also flow through one of these Indian accounts.

Can an NRI repatriate the money after selling?

It depends on how the property was funded. If bought with NRE or FCNR funds, the full sale amount can be repatriated, subject to a lifetime limit of two residential properties. If funded through an NRO account, repatriation is capped at one million US dollars per financial year. This is why the account you fund the purchase from matters years before you sell.

Does an NRI need to be in India to buy property?

No. An NRI who cannot attend can appoint a trusted person through a properly executed power of attorney to sign on their behalf, provided the sale is still completed by a registered sale deed. The buyer duties, such as deducting tax at source above fifty lakh, still apply. So give the power of attorney to someone reliable and ensure the paperwork is done correctly.

Last updated 2026-08-23. PropNewz Team.