NRI desk — banking route & remittance rules
Buying property in India as an NRI means every rupee must travel through a banking channel — never cash, never a third-party account. This guide explains which account to use (NRE vs NRO), how inward remittance works, the RERA project account requirement, and the documents your bank will ask for. Holdengard is not a broker, not RERA-registered, and does not arrange transactions. This is a decision aid — verify every rate and rule with your authorised dealer bank and a licensed local professional.
1. NRE vs NRO — Which Account for Property Payments?
Do this first — before you remit a single rupee.
| Feature | NRE Account (Non-Resident External) | NRO Account (Non-Resident Ordinary) |
|---|---|---|
| Source of funds | Foreign earnings (salary, business income, rent from abroad) | Income earned in India (rent, dividends, pension, sale proceeds of India assets) |
| Repatriation | Freely repatriable — principal + interest can be sent abroad without limit | Repatriable up to USD 1 million per financial year (subject to tax compliance, Form 15CA/15CB) |
| Tax on interest | Exempt in India | Taxable in India (TDS at 30% + surcharge/cess unless DTAA applies) |
| Joint holding | With another NRI/OCI only | With NRI/OCI or Resident Indian |
| Best for property purchase | Yes — preferred for fresh purchases from abroad | Only if funds are already in India (e.g. rental income, sale of old property) |
Rule of thumb: If you are sending money from abroad for a new purchase, use your NRE account. If you are using rental income or proceeds from an India asset already in your NRO account, you may use NRO — but check the USD 1M/year repatriation cap if you plan to take money back out.
2. Inward Remittance — The Step-by-Step Flow
Payments from abroad must go through banking channels — never cash, never third-party accounts.
Step 1: Initiate SWIFT transfer from your overseas bank
- Sender: your overseas bank account
- Beneficiary: your NRE/NRO account in India (not the seller directly)
- Purpose code: typically P0101 (purchase of immovable property) or P0102 (construction) — confirm with your bank
Step 2: Bank credits your NRE/NRO account
- Your Indian bank (authorised dealer) converts foreign currency to INR at the day's rate
- You receive a FIRC (Foreign Inward Remittance Certificate) or bank advice — keep this; it proves source of funds for tax and repatriation
Step 3: Pay the seller from your NRE/NRO account
- Transfer from your NRE/NRO account to the seller's account as named in the registered agreement
- Never pay to a personal account, a third-party company, or the builder's personal account unless it matches the RERA project account (see below)
Step 4: Collect payment proof
- Bank statement showing debit from your NRE/NRO
- Seller's acknowledgement / receipt
- FIRC from Step 2
- These are needed for: capital gains calculation, repatriation of sale proceeds later, and tax compliance
3. RERA Project Account Rule (Section 4(2)(l)(D))
For under-construction / new projects registered under RERA:
70% of all amounts collected from allottees must be deposited in a separate project bank account at a scheduled bank. Withdrawals are only in proportion to the percentage of completion certified by an engineer, architect, and chartered accountant.
What this means for you:
- The builder must give you the RERA project account details (bank name, account number, IFSC)
- Pay only to that project account — not the builder's general operating account
- Ask for the RERA registration number and verify the project account on the state RERA portal
- If the builder asks you to pay to a different account, stop and verify with your lawyer
4. Documents Your Bank Will Ask For (Checklist)
| Document | When Needed | Notes |
|---|---|---|
| Passport + valid visa/OCI/PIO | Always | Self-attested copies |
| PAN Card | Always | Mandatory for TDS, registration, tax filing |
| Overseas address proof | Account opening / large remittance | Bank statement, utility bill, driving licence (≤ 3 months old) |
| Indian address proof (if any) | If available | Aadhaar, voter ID, utility bill |
| Sale agreement / Agreement for sale (registered) | Before large payment | Must match RERA registration for new projects |
| RERA registration certificate (project) | Under-construction projects | Verify on state RERA portal |
| FIRC / Bank advice for remittance | After each inward remittance | Keep for tax and repatriation |
| Form A2 / FEMA declaration | Per bank's requirement | Bank provides; declares purpose of remittance |
| TDS certificate (Form 16A) | If seller is NRI | Buyer deducts TDS under Section 195 on the seller's capital gain (rate per the Income Tax Act; the seller can apply for a lower-deduction certificate). Check incometax.gov.in |
Action: Ask your authorised dealer bank before you remit which forms they need and their current FEMA checklist. Rules vary by bank and change over time.
5. NRI Home Loan — If You Are Financing
Indian banks/NBFCs offer NRI home loans with typical terms:
- Loan amount (LTV): set by each bank within RBI limits; ask your bank for its current NRI home-loan terms
- Tenor: varies by bank and your age; confirm in writing before you commit
- Interest rate: Linked to repo rate + spread; check current offers
- Co-applicant: Usually required (can be resident Indian family member)
- Repayment: Through NRE/NRO account via NACH/ECS mandate
Documents typically needed: passport, visa/OCI, PAN, overseas income proofs (salary slips, tax returns, bank statements), employment certificate, POA if not in India, property documents.
Verify with your bank — eligibility, rates, and required documents change.
6. Repatriation of Sale Proceeds — Plan Before You Buy
If you sell the property later, getting money out has rules:
| Scenario | Repatriation Limit | Conditions |
|---|---|---|
| Property bought via NRE (fresh purchase from abroad) | Freely repatriable — principal + capital gains | TDS paid, Form 15CA/15CB filed, sale proceeds credited to NRE |
| Property bought via NRO (funds from India income) | Up to USD 1 million per financial year | TDS paid, Form 15CA/15CB filed, CA certificate |
| Agricultural land / farmhouse / plantation (if inherited) | Same as above | Only if acquisition was permitted under FEMA |
Key point: The account you use to buy determines how easily you can repatriate later. NRE gives maximum flexibility.
7. Quick Reference — Banking Route at a Glance
| Step | Action | Account Used | Key Document |
|---|---|---|---|
| 1 | Send money from abroad | Your overseas bank → | SWIFT copy, purpose code |
| 2 | Receive in India | Your NRE (preferred) or NRO | FIRC (critical — keep it) |
| 3 | Pay seller / builder | Your NRE/NRO → Seller's account / RERA project account | Bank debit advice, seller receipt |
| 4 | Register property | — | Registered sale deed, stamp duty receipt |
| 5 | Later: sell & repatriate | Sale proceeds → NRE (freely) or NRO (USD 1M/yr) | Form 15CA/15CB, CA cert, TDS proof |
Sources (read 2 Nov 2026)
- RBI Master Direction — Non-Resident Indians (NRIs) / Persons of Indian Origin (PIOs) Remittance Facilities (updated 2026) —
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Mode=0&Id=12752 - FEMA (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 —
https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11746 - RERA Act, 2016 — Section 4(2)(l)(D) (project bank account) —
http://www.rera.gov.in/ - Income Tax Act, 1961 — Section 195 (TDS on NRI seller), Section 194-IA (TDS on property purchase) —
https://www.incometax.gov.in/ - State RERA portals (MahaRERA, UP-RERA, TNRERA, etc.) — project account verification
- Authorised dealer bank FEMA checklists (varies by bank) — confirm with your bank before remitting
Next step
Run your numbers: NRI Total Cost Calculator → | RERA 5-Check Tool → | Rental Yield & ROI Calculator →
Get the free NRI Property-Buying Roadmap (PDF) — the order of operations from goal-setting to possession, with checklists for every step and questions for your lawyer, accountant, and bank. Download the Roadmap →
Important
Read this first. Holdengard is an information and community platform. It is not a property listing portal. Holdengard does not hold a real-estate broker licence or RERA registration in any country, and does not arrange, negotiate or take a fee for any property transaction. Purchases and sales are handled by licensed local brokers and your own advisers. Nothing here is investment, legal or tax advice. Figures in the tools are illustrative until marked verified, so check every rate and rule with the official source. Full terms and disclaimer →
Frequently asked questions
Can I pay the seller directly from my overseas bank account?
No. FEMA requires all property payments to go through your NRE/NRO account with an authorised dealer bank in India. Direct overseas-to-seller transfers are not permitted for property purchase.
What if the builder asks me to pay to a personal account?
Do not pay. For RERA-registered projects, pay only to the RERA project account (70% rule). For resale, pay only to the seller's account named in the registered agreement. Verify with your lawyer.
Do I need an NRI home loan to buy property in India?
No. You can fund 100% from your NRE/NRO account. A home loan is optional and subject to bank eligibility.
Is the interest on my NRE account tax-free in India?
Yes. Interest on NRE accounts is exempt from Indian income tax. Interest on NRO accounts is taxable (TDS at 30% + surcharge/cess unless a DTAA benefit applies).
What is a FIRC and why do I need it?
A Foreign Inward Remittance Certificate is issued by your Indian bank when foreign currency is credited to your NRE/NRO account. It proves the source of funds for tax purposes, capital gains calculation, and future repatriation. Always request and save it.
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