Yes. A Non-Resident Indian (NRI) can buy residential and commercial property in India without any prior approval from the Reserve Bank of India (RBI). The one big exception is agricultural land, plantation property and farmhouses, which NRIs cannot buy. The rules sit under the Foreign Exchange Management Act, 1999 (FEMA) and the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and this guide explains them in plain language for buyers looking at Coimbatore and the rest of Tamil Nadu.
Key takeaways
- NRIs can freely buy flats, villas, houses, residential plots, shops and offices in India, with no limit on the number of properties.
- Agricultural land, plantation property and farmhouses cannot be bought by NRIs or OCIs without specific RBI approval.
- Payment must come through normal banking channels: an inward remittance or your NRE, FCNR(B) or NRO account. Cash in foreign currency or traveller’s cheques are not allowed.
- Repatriating sale proceeds later depends on how you paid, so keep a clean paper trail from day one.
- Title and approval checks are exactly the same as for resident buyers.
Who counts as an NRI for property purposes?
For FEMA, the question is whether you are a “person resident outside India”. Broadly, an Indian citizen who has gone abroad for employment, business or any purpose indicating an intention to stay outside India for an uncertain period is treated as a non-resident. This differs from the day-count test for income tax, so check your tax residency separately.
Overseas Citizens of India (OCI cardholders) are foreign citizens, but for immovable property they get the same treatment as NRIs, except for farm property. We cover that in detail in our guide for OCI cardholders buying property in India.
What NRIs can and cannot buy
| Property type | Can an NRI buy it? | Notes |
|---|---|---|
| Flats and apartments | Yes | No RBI approval, no limit on number |
| Independent houses and villas | Yes | Same as above |
| Residential plots (approved, non-agricultural) | Yes | Check the land is classified and approved for residential use |
| Shops, offices, commercial land | Yes | Allowed as immovable property other than farm property |
| Agricultural land, plantations, farmhouses | No | Needs specific RBI approval, which is rarely sought or granted |
| Inherited property of any kind | Yes, by inheritance | Inheritance from a resident or non-resident is allowed, including farm land |
If a seller in Coimbatore offers you “farm land” or a “farmhouse plot” in a managed farmland project, stop and read our explainer on NRIs and agricultural land first. The label on the brochure does not matter; the classification in the revenue records does.
How the purchase must be paid for
FEMA allows NRIs to pay the purchase price only from:
- Funds received in India by inward remittance through normal banking channels, or
- Funds held in your NRE, FCNR(B) or NRO account in India.
Payment by traveller’s cheques or foreign currency notes is not permitted. Home loans from Indian banks and housing finance companies are also allowed, and the loan can be repaid from your NRE, NRO or FCNR(B) account, by inward remittance or from rent earned on the property. Our guide to NRE, NRO and FCNR accounts for property explains which account to use and why it matters for repatriation.
Gifts, inheritance and selling
- Gift: An NRI can receive residential or commercial property as a gift, typically from a relative. Agricultural land, plantation property and farmhouses cannot be received as a gift.
- Inheritance: An NRI can inherit any property, including farm land, from a person resident in India or abroad, provided the original owner acquired it legally.
- Sale: An NRI can sell residential or commercial property to a resident, another NRI or an OCI. Agricultural land, plantation property or a farmhouse can be sold only to a person resident in India who is an Indian citizen.
What about the 2021 Supreme Court judgment?
In February 2021, the Supreme Court decided Asha John Divianathan v. Vikram Malhotra, a case about a foreign citizen who acquired property under the old Foreign Exchange Regulation Act, 1973, which needed RBI permission. The ruling caused worry among NRIs. The RBI then publicly clarified that under today’s FEMA framework, NRIs and OCIs do not need prior RBI approval to acquire or transfer immovable property other than agricultural land, farmhouses and plantation property.
Tax points every NRI buyer should know
- You need a PAN to buy and register property of meaningful value, and it helps later when you sell.
- When you buy from a resident seller, you deduct TDS just as a resident buyer would (the familiar section 194-IA). When you buy from another NRI, the stricter non-resident TDS rules apply.
- From 1 April 2026, the Income-tax Act, 2025 replaced the Income-tax Act, 1961 and renumbered most sections, so your CA’s paperwork will cite new section numbers. For example, TDS on payments to non-residents (old section 195) is now in section 393(2).
- Rent you earn is taxable in India, and capital gains on a future sale are taxed here too. Our guide to TDS when an NRI sells property covers this.
Buying in Tamil Nadu: the local checks
FEMA only decides whether you may buy. Whether the property is safe to buy is a question of title and approvals, and that is the same for NRIs and residents. In Coimbatore and across Tamil Nadu, insist on:
- A clear title chain, patta in the seller’s name and a recent Encumbrance Certificate from TNREGINET.
- DTCP or local planning approval for plots and building plan approval for houses. See our DTCP vs RERA guide.
- TNRERA registration for new apartment and plotted projects that fall under RERA.
- Stamp duty and registration fee paid on the higher of guideline value or sale value (check current rates on tnreginet.gov.in).
If you cannot travel for registration, a properly executed power of attorney from abroad lets a trusted person in Tamil Nadu act for you. Browse current flats and apartments in Coimbatore once your paperwork plan is clear.
Frequently asked questions
Do NRIs need RBI permission to buy a flat in India?
No. NRIs can buy residential and commercial property without prior RBI approval. Only agricultural land, plantation property and farmhouses need specific RBI approval.
Is there a limit on how many properties an NRI can buy?
No. There is no cap on the number of residential or commercial properties an NRI can buy. There is, however, a limit on repatriating sale proceeds of residential property, which applies to not more than two such properties.
Can I pay for Indian property from my foreign bank account directly?
Yes, if the money comes into India through normal banking channels as an inward remittance. You can also pay from your NRE, FCNR(B) or NRO account. Cash in foreign currency and traveller’s cheques are not allowed.
Can an NRI buy a residential plot in Coimbatore?
Yes, as long as it is genuinely non-agricultural land, for example a plot in an approved residential layout. Check the land classification, approvals and patta before paying.
This article is general information as of September 2026, not legal, tax or financial advice. Rules and rates change; confirm with a qualified advocate, chartered accountant or the relevant department before you act.
References
- Ministry of External Affairs: Acquisition and transfer of immovable property in India (FEMA summary)
- Reserve Bank of India: Acquisition and transfer of immovable property in India
- Argus Partners: RBI clarification on property acquisition by NRIs and OCIs
- TDSMAN: TDS on payments to non-residents, section 393(2) (old section 195)
Buying in Coimbatore from abroad?
We help NRI buyers shortlist approved properties, arrange document checks and plan the registration, whether you travel or use a power of attorney.
