NRI buying a Bangalore apartment in 2026: documentation, FEMA, and tax

The NRI Bangalore apartment buyer in April 2026 navigates a documentation stack that no resident buyer touches. FEMA 1999, the Foreign Exchange Management Acquisition and Transfer of Immovable Property in India Regulations 2018, the Income Tax Act sections 194-IA, 195, and 80C, the Union Budget 2026-27 amendment to TAN requirements, RBI repatriation limits, and Karnataka registration procedures all converge at the registration desk. The work is procedural rather than complex, but a single PAN-OCI mismatch or a missing Form 15CB at the authorised dealer bank can stall a USD 200,000 transfer for weeks. This piece walks through the framework rules, the TDS math, the LTCG treatment post 23 July 2024, and the Bangalore-specific verification stack that NRI buyers should run before signing the agreement to sell.

Can an NRI buy a Bangalore apartment in 2026 without RBI approval?

Yes. As of April 2026, NRIs, PIOs, and OCIs can purchase residential and commercial property in India under general permission per the FEMA 2018 Regulations. No RBI pre-approval is required. Funding must flow only through NRE, NRO, or FCNR accounts. Cash payments are prohibited. Agricultural land, plantation property, and farmhouses remain off-limits except by inheritance or gift from a resident relative.

The general permission framework is what makes NRI residential property purchase relatively straightforward in operational terms. The buyer signs the agreement to sell, transfers funds from a permitted account to the developer or seller, completes the registration at the relevant Karnataka sub-registrar office, and obtains the Khata in their name. The complexity sits at three points: source of funds documentation, TDS deduction at registration, and post-purchase repatriation if the property is later sold.

How does an NRI fund a Bangalore property purchase?

As of April 2026, an NRI funds a Bangalore property purchase through three permitted account types: NRE for foreign earned income that is fully repatriable, NRO for Indian-sourced income with USD 1 million per financial year repatriation cap, and FCNR-B for foreign currency deposits. Funds can move from any of these to the developer's account, but cash payment is prohibited, and the source of funds must be documentable for any future repatriation claim.

For a self-funded purchase, NRE is the cleanest route because the funds remain repatriable. Buyers using NRO funds for purchase need to plan for a longer repatriation window if they later sell. Most buyers combine an NRE down payment with a home loan from SBI, HDFC, ICICI, or Axis, where the bank typically allows up to 75 to 80 percent loan-to-value on apartments above Rs 75 lakh, with EMI serviced from NRE or NRO.

For a broader take on NRI capital allocation in Bangalore property, our coverage of NRI investment in Bangalore real estate still provides useful framework.

How much TDS does an NRI buyer have to deduct from a resident Indian seller?

As of April 2026, an NRI buying from a resident Indian seller deducts 1 percent TDS under Section 194-IA when the sale value exceeds Rs 50 lakh, the same rule that applies to resident buyers. The buyer can deposit this using a PAN. The Union Budget 2026-27 amendment removes the TAN requirement for resident buyers buying from NRI sellers effective 1 October 2026, simplifying the deposit process.

The reverse situation, an NRI seller and an NRI or resident buyer, is governed by Section 195. TDS under Section 195 for a property held more than 24 months is 12.5 percent on the LTCG without indexation, applicable to acquisitions made after 23 July 2024. For pre-23 July 2024 acquisitions, the seller can choose between 12.5 percent without indexation or 20 percent with indexation, whichever yields a lower tax. STCG attracts TDS at the applicable slab rate, effectively up to roughly 30 percent plus surcharge and cess.

What is the LTCG tax rate for an NRI selling a Bangalore property in 2026?

For a Bangalore property held more than 24 months and acquired after 23 July 2024, LTCG is taxed at 12.5 percent without indexation as of April 2026. For pre-23 July 2024 acquisitions, NRIs can choose between 12.5 percent without indexation or 20 percent with indexation, whichever yields a lower tax. Surcharge and cess apply on top of either rate.

The 23 July 2024 cutoff matters because it changed the indexation framework. Properties acquired before that date typically benefit from indexation when the holding period is long, since cost inflation index adjustments materially raise the indexed cost. Properties acquired after that date face the simpler but higher 12.5 percent without indexation framework. NRIs holding pre-cutoff properties should run both calculations before deciding which option to elect.

How can an NRI repatriate Bangalore apartment sale proceeds in 2026?

Sale proceeds must first be credited to the NRI's NRO account. The seller then files Form 15CB, which is a CA certificate, and Form 15CA, which is the online declaration on the Income Tax portal, attaches the buyer's TDS certificate or Form 16A, and submits the package to the authorised dealer bank. Up to USD 1 million per financial year can be repatriated from NRO, with unlimited repatriation from NRE.

DocumentIssued byPurposeForm 15CBChartered AccountantCertifies tax has been paid on the remittanceForm 15CANRI seller (online filing)Declaration of remittance details to Income Tax DepartmentForm 16ABuyer or buyer's bankTDS certificate evidencing tax deductedSale deed registeredKarnataka sub-registrarProves the sale and the consideration valueBank A2 formAuthorised dealer bankForeign exchange remittance applicationOriginal purchase deedOriginal sub-registrarEstablishes cost basis for capital gains

The full process from sale registration to USD credit in the overseas account typically takes 3 to 10 working days at the AD bank, assuming all documents are in order. The most common reason for delay is a PAN-OCI mismatch in the Income Tax records or a Form 15CB that does not align with Form 15CA in any of the named fields.

Can an NRI use a Power of Attorney to register a Bangalore apartment?

Yes. As of April 2026, the Power of Attorney for property purchase or registration must be notarised in the NRI's country of residence, then apostilled if the country is a Hague Convention signatory or attested by an Indian Embassy or Consulate if the country is non-Hague, then adjudicated and registered at the relevant Karnataka SRO before use. The PoA must explicitly authorise property purchase, registration, and Khata transfer.

The drafting matters as much as the procedural compliance. A generic PoA that grants broad authority can be challenged on the basis of Section 32A of the Registration Act and the Powers of Attorney Act. A purpose-specific PoA that names the property, the agreement value range, the bank account from which funds will move, and the named attorney with full identification details is significantly more defensible. Bangalore property lawyers typically draft NRI PoAs to a five to seven page template covering these points.

For a broader take on the Bangalore registration document stack, our coverage of documents required for property registration still provides useful framework.

What is the Section 80C and Section 24(b) treatment for an NRI buyer?

As of April 2026, an NRI taking a home loan for a Bangalore apartment can claim Section 80C deduction up to Rs 1.5 lakh on principal repayment and Section 24(b) deduction up to Rs 2 lakh on interest payment for a self-occupied property under the old tax regime. The deductions reduce taxable income in India, where the NRI is filing returns on Indian-sourced income. Buyers electing the new tax regime forfeit these.

Rental income from a Bangalore apartment is taxed at 30 percent slab plus surcharge and cess for NRIs. The basic exemption available to resident individuals does not apply to NRI slab income on Indian-sourced rents. For NRI buyers in the 30 percent slab, the after-tax rental yield is materially lower than the headline gross yield. The math should be modelled against an alternative deployment of the same capital before the purchase decision, not after.

What is the Bangalore-specific NRI verification stack in 2026?

The Bangalore-specific verification stack for an NRI buyer as of April 2026 includes K-RERA registration verification on rera.karnataka.gov.in, e-Khata verification on the GBA SAS portal using the SAS Property Tax ID, encumbrance certificate covering at least 30 years from the Kaveri portal, building plan sanction copy, occupancy certificate, completion certificate, and tax-paid receipts for the current and previous years.

The e-Khata system, rolled out by the Greater Bengaluru Authority in early 2025 and accessible online from abroad, has materially simplified the Khata transfer process for NRIs. Where earlier the Khata transfer required physical visit or PoA-led representation at a BBMP ward office, the GBA SAS portal allows online verification and digital initiation of the transfer. For our coverage of the e-Khata system, the earlier piece on Bangalore e-Khata online via SAS ID walks through the buyer journey.

What documents does an NRI need at the Bangalore registration desk?

At the Karnataka sub-registrar office in April 2026, an NRI buyer or the named attorney needs: passport with valid visa or OCI card, PAN card, NRE or NRO account proof, the registered PoA if the buyer is not present, the agreement to sell with the developer, the building plan sanction, the K-RERA registration of the project, the Khata or e-Khata of the property, the encumbrance certificate, parent documents, and the stamp duty and registration fee challans paid online.

The buyer should also carry passport-sized photographs, proof of overseas residence such as utility bill or driver's licence, and any TDS certificate or Form 16A if applicable. Karnataka SRO procedure as of 2026 is largely online for the documentation submission via the Kaveri portal, but the registration appointment itself remains in-person, with the named attorney representing the NRI buyer where the buyer is not present.

What changes in 2026 affect NRI buyers specifically?

As of April 2026, three changes specifically affect NRI buyers. First, the Union Budget 2026-27 removes the TAN requirement for resident buyers buying from NRI sellers effective 1 October 2026, simplifying the TDS deposit process. Second, the GBA replaced the BBMP from September 2025, with property records and Khata systems consolidated under the GBA SAS portal accessible online. Third, the Karnataka registration fee doubled from 1 percent to 2 percent effective 31 August 2025, raising the registration day cash outlay.

For NRI sellers in 2026, the simplification of TDS deposit is operationally meaningful because the resident buyer no longer needs to obtain a TAN, only the PAN, before depositing TDS under Section 195. This reduces the friction at the buyer end and typically shortens the registration timeline by 5 to 10 working days for NRI seller transactions.

For our broader take on the GBA transition and its implications, the earlier coverage of the Greater Bengaluru Authority replacing the BBMP walks through the records-side changes.

What should an NRI Bangalore apartment buyer do over the next ninety days?

An NRI Bangalore apartment buyer over the next ninety days should pull a current OCI or passport, ensure the PAN is linked to the OCI on the Income Tax portal, open or verify the NRE or NRO account, run the K-RERA registration check on the specific project, draft a purpose-specific PoA if the buyer will not be present at registration, and engage a Bangalore property lawyer for parent document review. The PoA should be apostilled or consular-attested before the buyer travels.

For sellers planning a 2026 sale, the documentation chain should start at least 60 days before target registration, given that Form 15CB requires the CA to compute the LTCG and certify the tax position. The 12.5 percent without indexation versus 20 percent with indexation calculation should be run for any pre-23 July 2024 acquisition before electing.

If you are weighing a specific NRI Bangalore apartment decision and want a second view on the FEMA framework, the TDS treatment, or the right structuring of the PoA, write to us. We are tracking NRI transactions across Bangalore through 2026. Let's chat.

By PropNewz Team