Buying a residential plot in India as a Non-Resident Indian (NRI) does not require any special permission from the government. The process is largely the same as that followed by Indian residents. The only significant difference is that if the NRI is unable to be physically present for registration, they must execute a Power of Attorney (POA).

Based on our experience, here are the six essential steps for an NRI to buy a residential plot in India:

Document Verification
Power of Attorney
Agreement of Sale
Home Loan
TDS (Tax Deducted at Source)
Sale Deed

REAL-LIFE CASE STUDY: NRI CLIENT FROM THE USA

One of my NRI clients, who resides in Redmond, USA, approached me to invest in real estate in Bangalore with a budget of Rs.2–3 Crores.

FIRST OPTION – AGRICULTURAL LAND

Initially, we considered investing in agricultural land in rural Bangalore, with the idea of building a farmhouse or resort-style setup. We even received an attractive offer of ₹8 lakh per gunta for land close to a main road. The location seemed very promising for future appreciation.

However, since NRIs are restricted from purchasing agricultural land, we had to drop this plan. (Note: If you have Indian family members willing to invest, this option can still be a profitable choice. Additionally, banks provide loans for such purchases to resident Indians.)

FINAL CHOICE – RESIDENTIAL PLOT IN BANGALORE CITY

We then shifted focus to residential and commercial properties within the city. After analyzing nearly 10–15 options based on parameters such as:

Location
Title documents
Pricing
Expected ROI over 10 years

We finalized a resale residential plot in a gated community in Hoodi, Bangalore, measuring 2600 sq. ft.

Price Negotiation

The seller had acquired this property through a family partition deed. The initial offer price was Rs.3 Crores.

The government guidance value for the property was Rs.1.85 Crores.
We made a counter-offer of Rs.1.85 Crores.
After two weeks of negotiations and multiple discussions, the final agreed price was Rs.2.15 Crores.

To be precise, the final buying price was Rs.2,15,81,200/-.

Step 1: Document Verification

NRIs often invest significant amounts in real estate, which makes document verification one of the most critical steps. It helps prevent fraud, forgery, and future disputes. For this transaction, we collected the following scanned copies from the seller:

Partition deed and parent deed (since the seller acquired the property through a family partition)
Family Tree certificate
Latest Property Tax receipt
e-Khata certificate
Aadhaar and PAN of the seller

Verification Process

Once we had the documents, we carried out the following checks:

Encumbrance Certificate (EC): Extracted the latest EC on Kaveri Online Services (Rs.180) to verify the transaction history and check for any registered mortgages.
Certified Copy (CC): Extracted CCs of the partition deed and parent deed (Rs.250) to ensure the deeds were genuine.
Property Tax: Logged into the property tax portal and downloaded the latest tax receipt (free of cost).
Family Tree Check: Cross-verified the family members listed in the partition deed with the Family Tree certificate.

Only after we were satisfied with these checks did we forward the documents to an advocate for a formal legal verification report. The advocate confirmed that the title was clear and marketable.

(Note: Many buyers send documents directly to an advocate without doing basic checks themselves. I strongly recommend that buyers learn how to extract the EC and CC on their own. It takes about 45 minutes, and there are plenty of online tutorials. Doing this homework builds confidence, saves time, and prevents potential mistakes.)

Deal Finalization & Planning Ahead

We finalized the deal on 5th December 2023, with my client paying an advance of Rs.20 lakhs to confirm the purchase.

The tentative registration date was set for 12th February 2024. To meet this deadline, we prepared a retro plan, working backwards from the sale deed registration date. This included scheduling the following in sequence:

Sale deed registration and appointment booking
Stamp duty payment
TDS payment
Agreement of Sale (if required)
Power of Attorney adjudication

This proactive planning allowed my client to book his flight to India well in advance, ensuring smooth coordination for the registration process.

Step 2: Power of Attorney (POA)

A Power of Attorney (POA) is a legal document that authorizes one person to act on behalf of another. This is particularly useful for NRIs who cannot be physically present in India for property-related transactions.

In this case, my client wanted to buy the property jointly with his wife, but since she was not traveling to India for the sale deed registration, she granted a Power of Attorney (POA) to her husband, authorizing him to execute the registration on her behalf.

Procedure Followed to Execute the POA

Drafted the POA in a Word document.
Printed it on A4-sized paper in the USA.
The POA was signed in the presence of a Notary Public in the USA. (Alternatively, an NRI may also execute the POA before the Indian Consulate. For certain Indian states, consulate attestation is mandatory.)
Two witnesses also signed the POA.
The Notary sealed and attested the POA.

Documents Sent to India

The client couriered the following documents via DHL from Redmond, USA:

Original notarized POA
Self-attested ID proofs (PAN and OCI)

Refer to below package image

Adjudication of POA in India

Once we received the courier, we submitted the documents at the Shivajinagar District Registrar Office, Bangalore for adjudication of stamp duty.

The following were submitted:

Request letter
Original POA
Stamp duty challan (Rs,200 from Khajane-2 website — Note: As of 9th Nov 2024, the revised stamp duty is Rs.500)
Self-attested ID proofs

Within a single day, the POA was adjudicated, and we collected it back from the District Registrar’s office.

(This adjudicated POA then became a legally valid document for use in the sale deed registration process.)

Step 3: Agreement of Sale

An Agreement of Sale is a legal document that records the terms and conditions under which a property will be sold by the seller to the buyer. It typically contains:

Details of the seller and buyer
Property description (schedule of property)
Agreed sale consideration (buying price)
Mode of payment (advance, balance, bank loan, etc.)
Tentative date for sale deed registration
Any other mutually agreed terms

Why We Skipped the Agreement of Sale in This Case

At this stage, the buyer was in the USA and not available in India for registration of an Agreement of Sale. After mutual discussion with the seller, we decided to skip the Agreement of Sale for this particular deal.

(Note: Many NRI buyers follow this approach if trust between parties is strong, and advance payment has already secured the deal. However, if you want a legal safeguard, it is advisable to execute an Agreement of Sale.)

How to Execute an Agreement of Sale

If you wish to sign an Agreement of Sale, you can either register it at the Sub-Registrar’s Office or execute it on non-judicial e-stamp paper.

Option 1: Registered Agreement of Sale

Draft your Agreement of Sale in Word document
Print the draft on A4 size paper and sign the agreement
Merge the seller’s and buyer’s PAN cards into one PDF (Annexure).
Submit your application on Kaveri Online Services, uploading both the Agreement draft and Annexures.
The Sub-Registrar office will verify the documents.
Pay the stamp duty and registration fee, then book your registration slot.
Visit the Sub-Registrar’s office on the appointed date with seller, buyer, and two witnesses to register the Agreement of Sale.

Option 2: Unregistered Agreement of Sale (on E-Stamp Paper)

Draft the Agreement os in word document
Purchase a non-judicial e-stamp paper from an authorized stamp vendor near your Sub-Registrar office.

Stamp duty is 0.5% of the sale consideration.
This duty can be adjusted against the stamp duty payable at the time of Sale Deed registration.

Print the first page of the Agreement on e-stamp paper, and the remaining pages on A4 sheets.
Both seller and buyer should sign on all pages, with two witnesses signing on the last page.

This completes the execution of an Agreement of Sale.

Step 4: Home Loan

A Home Loan is an amount that an individual borrows from a financial institution to purchase a property.

Documents Required for Home Loan Application

PAN Card and OCI/Passport
Income proof (salary slips, IT returns, bank statements, etc.)
Soft copies of property documents (Sale Deed, Encumbrance Certificate, Tax Receipt, and Khata)
Agreement of Sale between buyer and seller

Procedure to Apply for a Home Loan (For NRI Buyers)

Your physical presence is not required to process a home loan in India. Most banks offer complete online processing:

Submit Application Online – Log in to the bank’s website and file your application.
Initial Verification – Within 1–2 working days, a bank representative will contact you for supporting documents. You can submit these via email.
Property Valuation – Within about 5 working days, the bank representative visits the property for valuation.
Sanction Process – Within approximately 15 working days, the loan is sanctioned subject to eligibility.

At the time of Sale Deed Registration, the buyer executes a MODT (Memorandum of Deposit of Title Deed) with the bank, pledging the property documents as security. The bank then releases the loan amount, usually by issuing a cheque or demand draft directly to the seller.

NRI-Friendly Banks

I have personally witnessed many NRIs obtaining home loans through SBI, HDFC, and ICICI by submitting documents online and corresponding through email from abroad. These banks offer exclusive NRI services, making the process faster and more convenient.

Our Case

In our transaction, the buyer decided not to opt for a home loan. The entire sale consideration of Rs.2.15 Crores was self-financed. Hence, loan processing was not applicable in this case.

Step 5: TDS (Tax Deducted at Source)

Tax Deducted at Source (TDS) is applicable on the sale of immovable property where the sale consideration is Rs.50 Lakhs or above.

TDS Rates on Sale of Property

If the Seller is a Resident Indian – TDS @ 1% of the sale consideration.

If the Seller is an NRI – Higher TDS rates apply, including surcharge and cess:

Consideration less than ₹50 Lakhs – 20.80%
Consideration between ₹50 Lakhs and ₹1 Crore – 22.88%
Consideration above ₹1 Crore – 23.92%

How to Deposit TDS

TDS must be deposited through the Income Tax Department’s e-Filing website under Form 26QB.

Login using the buyer’s PAN on the Income Tax e-Filing portal
.Select Form 26QB (Payment of TDS on Property).
Enter the seller’s PAN – details will auto-populate.
Enter the sale consideration amount.
For NRI sellers – both PAN and TAN of the buyer are mandatory.
Make the TDS payment via Net Banking through an authorized bank.
Download the TDS Challan immediately after payment.

Our Case Study

In our transaction, the sale consideration was Rs.2.15 Crores (above Rs.50 Lakhs), and the seller is a Resident Indian living in HAL 3rd Stage, Bangalore.

TDS applicable: 1% of Rs.2,15,81,200 = Rs.2,15,812
Buyer logged in using PAN on the e-Filing website.
Under Form 26QB, seller’s PAN and transaction details were entered.
TDS of Rs.2,15,812 was paid through HDFC Bank Payment Gateway.
The TDS challan was generated instantly and downloaded for record.

Refer to below TDS Challan

Step 6: Sale Deed

A Sale Deed is the conclusive legal document that establishes property ownership. It records the transfer of property rights from the seller to the buyer. The Sale Deed includes:

Details of the seller and buyer
Property description
Consideration (purchase amount)
Rights and obligations of the buyer

Documents Required for Sale Deed Registration

Title document showing how the seller acquired the property
Latest Tax Receipt
e-Khata Certificate
Seller’s PAN
Buyer’s PAN
TDS Challan (if applicable)
Sale Deed (to ne registered)

Procedure to Register a Sale Deed in Karnataka

Submit an application in Kaveri Online Services.
The application is verified at the jurisdictional Sub-Registrar Office (SRO).
The SRO raises a payment request for Stamp Duty and Registration Fee.
Make the payment through integrated net banking or payment gateway.
Book a registration slot online.
Visit the Sub-Registrar Office with the seller and buyer to execute and register the Sale Deed.

Below is our registered Sale deed:

On the very next day, my client flew back to the USA. We began working on the Khata transfer and property tax update remotely, as the buyer’s physical presence is not required for these processes.

Edit (19th Aug 2025): With recent updates, once the Sale Deed is registered, the mutation of Khata from seller to buyer is now done automatically, and there is no need to submit a separate application for the same.

We are well-versed in handling transactions for international clients. Our proven techniques and strategies help reduce your cost, save valuable time, and significantly improve your property-buying efficiency.

Write to us at pgnproperties@gmail.com or WhatsApp us at +91-97424-79020 to get started.

Frequently Asked Questions (FAQs)

Can NRIs buy agricultural land in India?

No, NRIs can only purchase residential or commercial properties in India. Buying agricultural land, plantations, or farmhouses is not permitted unless inherited or purchased by a resident Indian using foreign remittance.

Is a Power of Attorney (POA) mandatory for NRIs to register property?

If the NRI cannot be physically present in India for registration, a valid POA, preferably notarized (and consular-attested where required) is required to act on behalf of the buyer.

Can NRIs get home loans for property purchase in India?

Yes, leading Indian banks like SBI, HDFC, and ICICI offer dedicated home loan services for NRIs. The process is largely online, requiring standard documents like PAN, proof of income, and property documents.

What are the TDS rates for property transactions involving NRIs?

TDS must be deducted as follows:

1% if the seller is a resident Indian and the sale is above ₹50 lakh.
20–24% (depending on slab) if the seller is an NRI.

Are there restrictions on the number of properties NRIs can purchase?

No, NRIs and OCIs are allowed to purchase any number of residential or commercial properties. The only restrictions apply to agricultural, plantation, or farmhouse lands.

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