Person resident outside India i.e. Non – Resident Indian (NRI) or foreign national of Indian origin (PIO) or foreign national of non – Indian origin are not allowed to purchase or transfer immovable property except as per FEMA Act or any regulations made under FEMA by RBI.

This article, in particular, discusses the repatriation of sale proceeds of immovable property in India. For understanding on repatriation of sale proceeds of assets in general, please refer our article

We discuss here the regulations as applicable according to residential status:



​NRI and PIO have been defined in FEMA 21/2000 RB as:
NRI is a citizen of India who is residing outside India.

PIO means an individual (not being a citizen of Pakistan or Bangladesh orSri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who:

  • at any time held an Indian Passport or
  • who or either of his father or mother or whose grandfather or grandmother was a citizen of India by virue of the Constitution of India or the Citizenship Act, 1955.

It should be noted that:

  • China includes Hongkong and Macau.
  • Spouse clause as given in PIO definition in other FEMA circular/ notifications has been dropped here.

As per FEMA 21/2000- RB and other recent notifications, NRI & PIO have been granted general permission to purchase immovable properties in India except agricultural land or plantation property or farm house

The funds may be repatriated to India (for purchase of property) through bank channels by way of inward remittance or debit to existing non – resident account maintained in accordance with the provisions of FEMA, 1999. No other mode of payment is acceptable (e.g. traveller’s cheque or foreign currency notes, etc.)

A NRI/PIO can also acquire a property by way of gift and inheritance from a Resident or Non – Resident. However, agricultural land, plantation property or a farm house cannot be acquired as gift.

A PIO who is a citizen of prescribed countries (as per PIO definition given above) can only take an immovable property on lease not exceeding five years. If he intends to purchase a property, RBI approval is required.


An NRI/PIO may transfer his immovable property to a resident/ non resident (NRI/PIO). However, he can sell his existing agricultural land or plantation property or farm house only to a resident.

If a  PIO who is a citizen of prescribed countries (as per PIO definition given above) wish to transfer his property, he shall need prior RBI approval.


  • The repatriation of proceeds of residential property by NRI/PIO is limited to two such properties.
  • The repatriation of proceeds of agricultural land or plantation property or farm house is not allowed.

The existing FEMA regulations permit an overall remittance limit of USD 1 million from NRO account for bonafide purposes. This remittance limit is available to NRI/PIO for each financial year. The sale proceeds of immovable property can thus be credited to NRO account & be further remitted under the overall USD 1 million limit.

There is an ambiguity in FEMA notifications in the sense that the persons covered under 6(5) of FEMA, 1999 ( NRI who has purchased the property while he was resident) cannot remit sale proceeds of such property outside India except with the prior approval of Reserve Bank. However, on detailed analysis one would find that the Master Circular on Remittance Facilities for NRI/PIO mentions this prohibition very obliquely. Similarly, the FAQs on acquisition and transfer of immovable property clearly say that an NRI who had purchased an immovable property while he was resident can transfer the property and repatriate the sale proceeds.

However, the repatriation needs to be done net of taxes. ADs have been provided significant powers to ensure that the repatriation is being done after all necessary taxes have been paid/ provided for.

The NRI/PIO can freely rent out their immovable property and the rental income being a current account transaction can be freely remitted outside India.

The property owned by NRI/ PIO can also be mortgaged to AD/ housing finance institution or an Indian Bank without any approval of RBI. However, mortgage to a foreign bank would need the prior approval of RBI. 


A foreign national who has resided in India for 182 days & more in the preceding financial year & who has the intention to stay for an indefinite period can also buy property in India.

It is important here to note that the foreigner may have come to India for employment, vocation or for any other purpose & he may be residing in India for more than 182 days (in the preceding financial year) but if it cannot be adjudged that he has an intention of staying for an indefinite period, than he cannot buy property in India. The intention to stay for an indefinite period should be unambiguously reflected by all means including type of visa granted. The onus to prove this intention lies with the foreigner.


  • A foreign company establishing its branch office, liasion office, site, project office etc. in India falls under this category. Any foreign company which has taken RBI approval (as per FEMA 22/2000 RB) for establishing a branch office or project office in India, may acquire an immovable property if it is deemed necessary for the purpose. Form IPI needs to be submitted with RBI within 90 days from the date of such acquisition. However, a company establishing liaison office cannot acquire immovable property without prior approval of RBI.
  • Foreign nationals other than above can inherit an immovable property only from a person who was resident in India. If they wish to purchase any immovable property in India, they need to take RBI approval. The transfer of such property which was acquired after RBI approval shall again need RBI approval.

A foreign national can take on lease an immovable property for 5 years without approval of RBI.

Further, foreign companies which are incorporated in prescribed countries (as mentioned in PIO definition) cannot acquire immovable property in India after establishing a branch office as per applicable FEMA guidelines/provisions. They need RBI approval.