Buying Property in India as an NRI or OCI 2026: PAN, FEMA & the Agricultural-Land Trap

A WhatsApp message we get most weeks, lightly edited: "My cousin in Pune found us a lovely plot near the new ring road, and a flat in the same city. I have an OCI card. Can I just buy both? And someone said I should buy the plot as a 'gift' from my uncle to avoid tax — is that right?"

The honest answer is half yes, half no, and the "no" half is the one that costs people money. As an OCI cardholder — or an NRI on an Indian passport — you can buy that flat without asking anyone's permission. You can buy a second flat, a third, an office, a shop. There is no cap. But that "lovely plot near the ring road" is very likely agricultural land, and you cannot buy it, you cannot be gifted it, and the "buy it as a gift" advice is exactly the kind of confident, wrong shortcut that ends in a FEMA penalty.

This guide walks the whole thing honestly: what you can and cannot buy under FEMA, why a PAN is the thread that runs through every step, how the money has to move, what happens with TDS and repatriation when you eventually sell, and where an agent genuinely earns the fee versus where you can do it yourself. First, the foundation nobody can skip.

You cannot transact without a valid PAN#

Before any of the FEMA detail, the practical gatekeeper: a Permanent Account Number (PAN) is mandatory for property transactions in India. You need it to register the sale deed, to satisfy the TDS machinery, to run the NRO/NRE banking the purchase flows through, and — crucially — to ever sell or take money out later. There is no realistic way to buy and hold Indian property as a non-resident without one.

The trap that catches NRIs specifically is not the absence of a PAN — many already have one from years ago — it is a PAN that has quietly gone "inoperative." Since mid-2023, large numbers of NRI PANs have been flagged inoperative because the income-tax database still tags the holder as a Resident and expects an Aadhaar link that an NRI never had to do. An inoperative PAN can mean higher TDS and withheld refunds — and it can stall a registration. The fix is not to link Aadhaar; it is to update your residential status to Non-Resident with the tax department. We cover that fix in detail in the PAN inoperative NRI fix 2026, and the broader PAN picture in our NRI PAN card 2026 guide.

If your PAN is missing, inoperative, or you are not even sure which it is, that is the first job. We handle PAN issue and the inoperative-to-non-resident status correction end to end through our NRI PAN card service, because everything below depends on it.

What you CAN buy — and what you CANNOT#

Here is the part that surprises people in a good way, followed by the part that surprises them in an expensive way.

Under the Foreign Exchange Management Act (FEMA), an NRI or OCI can acquire residential and commercial immovable property in India:

• No prior RBI permission is required. You do not write to the Reserve Bank, you do not wait for a clearance. It is a general permission.
• No limit on the number of properties. One flat or ten flats, a shop, an office — FEMA does not cap it.
• You can also acquire property by gift or inheritance from a resident, where the property itself is the permitted (non-agricultural) kind.

What you cannot buy, full stop, is agricultural land, plantation property, or a farmhouse. This is the line that catches the most people, because so much attractively priced land on the city fringe is classified as agricultural on the revenue record even when it looks like a building plot.

The RBI's position on agricultural land, plantation and farmhouse property is narrow: these can be inherited from a person resident in India, but an NRI or OCI cannot purchase them — and the RBI does not treat them as something a resident can freely gift to a non-resident either. You will find blogs that breezily say "a gift is fine." Treat that as a red flag, not as advice. The safe reading, and the one that keeps you out of trouble, is: agricultural land can come to you only by inheritance, never by purchase and not by gift. If someone is structuring a "gift" to get you around the purchase ban, walk away and get a property lawyer.

	You CAN buy	You CANNOT buy
Residential flat or house	Yes, no RBI permission	—
Commercial office or shop	Yes, no limit on number	—
Agricultural land	No	Cannot purchase or be gifted
Plantation property	No	Cannot purchase or be gifted
Farmhouse	No	Cannot purchase or be gifted
By inheritance from a resident	Yes, incl. agricultural	—

A word on what OCI status actually is, because it shapes all of this. OCI is not dual citizenship — India does not allow dual citizenship. OCI gives you a lifelong visa and broad parity with NRIs on economic, financial and educational matters, which is precisely why an OCI can buy non-agricultural property exactly like an NRI. It does not give you citizen rights such as buying farmland or voting. If you want the full map of what OCI does and does not let you do, see OCI vs Indian citizenship rights 2026.

How the money has to move (banking channels only)#

FEMA does not just care about what you buy — it cares about how you pay. The payment for the property must come through proper banking channels. In practice that means one of:

• Inward remittance from abroad through normal banking channels, or
• A debit to your NRE account, or
• A debit to your FCNR(B) account, or
• A debit to your NRO account.

What you cannot do is pay in cash, by traveller's cheque, or through any informal hawala-style route. Every rupee of the purchase price should be traceable to one of the channels above.

This is not box-ticking for its own sake. The paper trail of how you funded the purchase is the same paper trail you will need years later to repatriate the sale proceeds. The bank remittance advices, the NRE/NRO debit records — keep all of them in a folder from day one. The NRIs who struggle to get their money out later are almost always the ones who funded a purchase loosely and cannot now evidence the original inward remittance.

	NRE account	NRO account
Funded by	Foreign earnings remitted in	Indian-source income, rent, sale proceeds
Repatriable	Freely repatriable	Up to USD 1 million per year
Used to pay for property	Yes	Yes
Tax on interest	Tax-free in India	Taxable in India

The buying process, step by step#

Assuming you have an operative PAN and you have confirmed the property is non-agricultural, the purchase itself follows a fairly standard sequence. The non-resident wrinkles are in the funding and the documentation, not in the conveyancing.

How an NRI or OCI buys property in India

1. Sort your PAN first — ensure you have a PAN and that it is operative (status updated to Non-Resident if needed). Nothing registers cleanly without it.
2. Verify the property class and title — confirm on the revenue/title records that the property is residential or commercial, not agricultural, plantation or farmhouse. Run full title due diligence with a local lawyer.
3. Set up the right banking — have an NRE/NRO (and if relevant FCNR(B)) account ready, so the money can move through a permitted channel and leave a clean trail.
4. Appoint a Power of Attorney if you can't attend — most NRIs execute a specific, registered PoA to a trusted relative or lawyer so the registration can happen without flying in.
5. Pay through banking channels only — inward remittance or NRE/FCNR(B)/NRO debit. No cash, no traveller's cheques. Account for any TDS the buyer must deduct if you are buying from another non-resident.
6. Register the sale deed — quoting your PAN, paying stamp duty and registration charges, and collecting the registered deed and chain of title.

If you are buying from an NRI seller, note that you as the buyer carry a TDS obligation on that purchase — that is a different chain of rules, which we unpack from the seller's side below and in our dedicated post.

When you sell later: TDS, capital gains and the PAN again#

Most NRIs buy property thinking about the purchase and forget that the exit is where the tax bites hardest. Plan for it now.

When an NRI sells Indian property, the gain is taxed and the buyer must deduct TDS at source. The headline points at the time of writing:

• Long-term capital gains for an NRI are taxed at 12.5% (without indexation). NRIs do not get the resident's choice of an indexed-20% alternative — it is the flat 12.5% route.
• The real cash-flow problem is that TDS is deducted on the gross sale consideration, not on your actual gain. With surcharge and cess the effective TDS ceiling lands around ~15% of the whole sale price. On a property that has barely appreciated, that can be far more than the tax you actually owe — money locked up until you reclaim it by filing a return.
• The fix is the lower-deduction certificate (the long-standing Form 13 route; note the form references are being renumbered under the new income-tax law, so confirm the current form before applying). It tells the buyer to deduct TDS on your real gain, not the gross price, so you are not over-deducted by lakhs.

There is one genuinely helpful 2026 change. Historically the resident buyer of property from an NRI had to obtain a TAN to deposit the TDS — a hurdle that scared off some buyers. From 1 October 2026, an individual one-time buyer may deposit that TDS using their PAN instead of a TAN (companies, and transactions up to 30 September 2026, still use TAN). Hedge this as effective-from-a-date and confirm live, but it does make selling to an ordinary resident buyer smoother.

We go far deeper into the seller's mechanics — Form 13, the TDS rate maths, and why the PAN is central — in NRI selling property India: TDS and PAN 2026. If you are buying now, read it before you buy, because it tells you what your eventual exit will look like.

Getting the money out: repatriation rules#

Buying is easy; getting the proceeds back to the UK (or wherever you live) is where the FEMA detail returns.

After Indian taxes are paid, an NRI can repatriate up to USD 1 million per financial year out of the NRO account. That cap covers all NRO outward remittances for the year combined, not just property. Each remittance needs a Form 15CA (your declaration) and usually a Form 15CB (a chartered accountant's certificate that taxes have been dealt with). Keep your CA in the loop early — the 15CB is where a missing funding trail or an unresolved TDS issue surfaces.

For residential property specifically, there is an additional carve-out: repatriation of the original sale proceeds is restricted to not more than two residential properties. Beyond that, proceeds still flow out under the general USD 1 million annual scheme. Money funded originally from an NRE account or by inward remittance is generally easier to repatriate than NRO-sourced funds — which is, again, why the funding records matter.

A note on timing: these figures move with the rupee and with policy. We have deliberately not anchored this post to a "from 1 April 2026 new forms replace 15CA/15CB" claim that has been circulating, because we could not verify it. Treat the USD 1 million limit, the two-property residential rule, and the 15CA/15CB requirement as the current position and confirm the live rules with your bank and CA before you remit.

Where DIY is fine, and where an agent earns its fee#

We are an honest agent, so here is the straight version. Plenty of NRIs buy Indian property perfectly well on their own: the title due diligence and conveyancing are done by a local property lawyer in India, and that is exactly who should do them.

Where our lane is, and where the paperwork gets expensive when it goes wrong, is the PAN, TDS and 15CA/15CB layer that wraps around the deal:

• Getting you a PAN, or fixing one that wrongly shows inoperative because the database still tags you Resident.
• Sequencing the TDS correctly — especially the lower-deduction certificate (Form 13) so you are not over-deducted on a gross sale price.
• Supporting the Form 15CA/15CB repatriation paperwork so the money actually leaves India cleanly.

These are the steps where DIY mistakes cost real money and real months — a stalled registration, lakhs of TDS locked up, a remittance bounced for a missing certificate. That is the fee we earn.

The one thing we will repeat because it underpins everything: you cannot transact without a valid, operative PAN. Buy it, fix it, keep it clean.

If your PAN is the missing or broken piece — missing entirely, inoperative, or showing the wrong residential status — that is the first domino, and it is the one we handle. We issue NRI/OCI PANs and correct inoperative-status PANs end to end through our NRI PAN card service, so the rest of your property plans have a foundation to stand on.

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This guide reflects FEMA property rules, PAN requirements, TDS treatment and repatriation procedures for NRIs and OCI cardholders as observed by NriDirect in 2026, including the agricultural-land prohibition, the USD 1 million annual NRO repatriation limit, the two-property residential repatriation rule, and the 1 October 2026 PAN-not-TAN change for individual buyers. Figures, forms and limits change without notice and depend on your individual circumstances — verify current FEMA rules on rbi.org.in↗ and current tax and TDS rules on incometax.gov.in↗ before transacting, and take local legal advice on any specific property. OCI is not dual citizenship. NriDirect is an independent agent and is not affiliated with the RBI, the Income Tax Department, VFS Global or the Indian High Commission.