An NRI’s checklist for buying property in Mumbai
What FEMA permits, how the money must move, the TDS position, and why a well-drafted power of attorney saves months.
Under FEMA, an NRI or OCI may buy residential and commercial property in India without prior approval. Agricultural land, plantations and farmhouses may not be purchased, though they can be inherited.
Funds must come through banking channels — an NRE, NRO or FCNR account, or an inward remittance. Cash is not an option, and payments from a foreign account directly to a seller create problems at registration.
When an NRI sells, the buyer must deduct TDS at a materially higher rate than for a resident seller, on the sale value rather than the gain. Applying for a lower-deduction certificate before the sale avoids locking up capital for a year.
If you cannot travel for registration, execute a special power of attorney in favour of someone you trust, attested at the Indian consulate and adjudicated in India. Draft it for the specific transaction — a general POA is both riskier and more likely to be questioned.
Repatriation of sale proceeds is permitted within limits, and is simpler where the original purchase was funded through NRE or inward remittance. Keep the funding trail from day one.