NRI Buying a Flat in Hyderabad: RBI Rules on Payment, Farmland and Repatriation
The RBI FAQ on purchase of immovable property, updated as on 6 April 2023, sets out what NRIs and OCIs can buy in India, how they must pay and when sale proceeds can be repatriated. A plain reading for Hyderabad buyers paying from abroad.
An engineer in New Jersey is on a late-night video call with a sales office in Hyderabad. The flat is on a high floor, the booking form is ready, and the executive suggests a quick transfer of the booking amount from any account. Before that money moves, there is one document worth reading slowly: the Reserve Bank of India's FAQ on purchase of immovable property, updated as on 6 April 2023. It runs to eight questions for non-residents, and three of them decide how an NRI or OCI buyer should pay, what they can buy and how much of the money they can one day take back out of India.
This guide reads Part II of the RBI FAQ on purchase of immovable property for a Hyderabad buyer living abroad. It is buyer guidance on the foreign exchange rules, not legal or tax advice. The FAQ itself says that for an actual transaction, the Foreign Exchange Management Act, 1999 (FEMA), the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 and Part II of RBI's Master Direction No 12 should be referred to.
The short answer. Under the RBI FAQ, NRIs and OCIs can buy immovable property in India other than agricultural land, farmhouses and plantation property, from a resident, an NRI or an OCI. Payment has to be received in India through banking channels, and can come from NRE, FCNR(B) or NRO accounts, but not through travellers' cheques or foreign currency notes. On a later sale, repatriation of sale proceeds of residential property is restricted to not more than two properties, and only where the purchase was paid in foreign exchange through banking channels or from FCNR or NRE funds. The trade-off: paying from an NRO account is permitted for the purchase, but the FAQ's repatriation conditions mention only foreign exchange, FCNR and NRE funds, so the account you pay from today shapes what you can send abroad tomorrow.
Who counts as an NRI or an OCI under these rules?
The FAQ uses two defined terms. An NRI is a person resident outside India who is a citizen of India. An OCI is a person resident outside India who is registered as an Overseas Citizen of India Cardholder under Section 7(A) of the Citizenship Act, 1955. Both definitions turn on residence outside India, so the label that matters is your residential status under foreign exchange law, not simply where your passport was issued.
The FAQ treats NRIs and OCIs together for purchase, gift, inheritance and sale. Foreign nationals who are neither are handled in a separate answer, which is covered further below.
What kind of Hyderabad property can an NRI or OCI buy?
Almost anything except farmland. The table in the FAQ's first answer says an NRI or OCI can purchase immovable property, other than agricultural land, farmhouse or plantation property, from a resident, an NRI or an OCI, under Rule 24(a) of the Non-Debt Instrument Rules, 2019. The exclusion list does not mention residential flats, villas or commercial units, which is why the usual apartment booking in a Hyderabad project sits inside the permitted category.
The same table covers other routes. An NRI or OCI can acquire property other than agricultural land, farmhouse or plantation property as a gift from a resident, NRI or OCI who is a relative, under Rule 24(b). Inheritance is wider: any immovable property can be acquired by inheritance from a person who acquired it under laws in force, or from a resident, under Rule 24(c). The FAQ notes that relative takes its meaning from Section 2(77) of the Companies Act, 2013.
The practical point for buyers looking at the city's fringes is the farmland line. Land sold as a weekend farm plot, a plantation or a farmhouse falls in the excluded category for purchase. Before paying for any plot, check how the land is classified and ask the seller in writing.
| Transaction | NRI or OCI position under the RBI FAQ | Rule cited in the FAQ |
|---|---|---|
| Buy a flat or other property, not agricultural land, farmhouse or plantation | Permitted, from a resident, NRI or OCI | 24(a) |
| Receive property as a gift, not agricultural land, farmhouse or plantation | Permitted, from a resident, NRI or OCI who is a relative | 24(b) |
| Inherit property, including agricultural land | Permitted, from a person who acquired it under laws in force, or from a resident | 24(c) |
| Sell agricultural land | Only to a resident | 24(d) |
| Sell or gift residential or commercial property | To a resident, NRI or OCI | 24(e) |
How must an NRI pay the builder or seller?
Through banking channels, inside India. The FAQ's answer on modes of payment says payment for immovable property has to be received in India through banking channels and is subject to payment of all taxes and other duties or levies in India. It adds that payment can also be made out of funds held in NRE, FCNR(B) or NRO accounts of the NRI or OCI.
Two instruments are ruled out in the same answer. The FAQ says payments should not be made through travellers' cheques and foreign currency notes. For a buyer used to carrying cash on a visit home, that means the booking amount, instalments and any balance at registration should all move as bank transfers into the seller's or builder's account in India, with each receipt matched to a bank entry.
Can I take the money back out when I sell?
Within limits. The FAQ says NRIs and PIOs can remit the sale proceeds of immovable property, other than agricultural land, farmhouse or plantation property, subject to three conditions. The property must have been acquired in accordance with the foreign exchange law in force at the time, or with the Non-Debt Instrument Rules, 2019. The purchase amount must have been paid in foreign exchange received through banking channels, or out of funds held in a foreign currency non-resident account or a non-resident external account. And in the case of residential property, repatriation of sale proceeds is restricted to not more than two such properties.
A separate category gets a dollar cap. The FAQ says repatriation up to USD 1 million per financial year is allowed, along with other assets under the Remittance of Assets Regulations, 2016, for NRIs, PIOs and certain foreign citizens who inherited from a person referred to in Section 6(5) of FEMA, who retired from employment in India, or who are non-resident widows or widowers inheriting from a deceased spouse who was an Indian national resident in India.
One case needs RBI approval. The FAQ says a person who acquired property under Section 6(5) of FEMA, or his successor, cannot repatriate the sale proceeds of such property without RBI approval. Section 6(5), as the FAQ explains, covers property acquired, held or owned when the person was resident in India, or inherited from a person who was resident in India.
What if my spouse is a foreign national?
A joint purchase of one property is possible. The FAQ says a person resident outside India, not being an NRI or OCI, who is the spouse of an NRI or OCI may acquire one immovable property, other than agricultural land, farm house or plantation property, jointly with the NRI or OCI spouse, subject to the conditions in Rule 25 of the Non-Debt Instrument Rules, 2019. If your spouse holds a foreign passport and no OCI card, read Rule 25 with your bank or lawyer before the agreement for sale names both of you.
Which buyers need RBI permission first?
Citizens of eleven listed countries. The FAQ says citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong or the Democratic People's Republic of Korea, irrespective of residential status, cannot acquire or transfer immovable property in India without prior permission of the Reserve Bank, other than on lease not exceeding five years. The same answer says this prohibition does not apply to an OCI.
Other foreign nationals are treated by residence. The FAQ says foreign nationals of non-Indian origin resident in India, other than citizens of those eleven countries, can acquire immovable property in India. Foreign nationals of non-Indian origin resident outside India can acquire or transfer property on lease not exceeding five years, and can acquire property by inheritance from a resident. All other acquisitions or transfers by foreign nationals require prior RBI permission, according to the FAQ.
What does transfer mean in these rules?
More than a sale. The FAQ quotes Section 2(ze) of FEMA, under which transfer means sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien. So mortgaging the flat for a loan, or gifting it later, is also a transfer under foreign exchange law.
If you are paying from abroad, two of our earlier guides cover the other side of the transaction: buying from an NRI seller under Form 141 Schedule E, and filing a consumer complaint from abroad. When shortlisting, our project pages such as Godrej Epoque at Neopolis are a starting point for the RERA and approval questions to raise with any developer.
A seven-point checklist before an NRI pays for a Hyderabad flat
- Confirm your status as an NRI or OCI under the FAQ's definitions, and tell your bank if it has changed.
- Check that the property is not agricultural land, a farmhouse or plantation property.
- Decide which account will fund the purchase, keeping in mind the repatriation conditions for NRE, FCNR and foreign exchange funds.
- Pay only through banking channels into an Indian account, never in travellers' cheques or foreign currency notes.
- File every bank advice and builder receipt together for each instalment.
- If a foreign national spouse is a co-buyer, review Rule 25 of the Non-Debt Instrument Rules before signing.
- Count how many residential properties you already hold, since repatriation of sale proceeds is limited to two.
Frequently asked questions
Can an NRI buy a flat in Hyderabad without RBI permission?
Yes, under the RBI FAQ. NRIs and OCIs can purchase immovable property other than agricultural land, farmhouse or plantation property from a resident, NRI or OCI under Rule 24(a) of the Non-Debt Instrument Rules, 2019. Citizens of eleven listed countries need prior RBI permission, but the FAQ says this does not apply to OCIs.
Can I pay the booking amount from my NRO account?
The RBI FAQ says payment can be made from funds held in NRE, FCNR(B) or NRO accounts, through banking channels in India. However, the FAQ's conditions for repatriating sale proceeds refer to purchases paid in foreign exchange through banking channels or from FCNR or NRE funds, so the funding account matters later.
Can an NRI buy farmland or a farmhouse near Hyderabad?
Not by purchase, according to the RBI FAQ. Its table permits NRIs and OCIs to purchase property other than agricultural land, farmhouse or plantation property. Agricultural land can be acquired by inheritance, and an NRI or OCI can sell agricultural land only to a person resident in India.
How many properties can an NRI repatriate sale proceeds from?
For residential property, the RBI FAQ says repatriation of sale proceeds is restricted to not more than two such properties. The property must have been acquired in line with foreign exchange law, and the purchase must have been paid in foreign exchange through banking channels or from FCNR or NRE account funds.
Last updated 2026-11-05. PropNewz Team.
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