Is agricultural land open to an NRI buyer in Bangalore?

No. Flats, houses and offices can be bought, but farm land, plantations and farm houses cannot. An NRI can receive such land only by inheritance.

Is there a cap on how many properties an NRI may own?

Buying has no cap. The figure of two applies solely when the sale proceeds of a home are sent abroad.

What is the yearly ceiling on NRO remittances?

It is USD 1,000,000 in a financial year, after tax is paid and the new tax forms are filed. Every NRO remittance made that year uses up part of it.

How is TDS charged when the seller is an NRI?

At the capital gains rate, which for a long-term gain is 12.5% with surcharge and cess, rather than the 1% applied to resident sellers. A lower deduction certificate can reduce it.

May an NRI fund a purchase out of an NRO account?

Yes. NRO money is one of the allowed sources, next to overseas remittances and NRE or FCNR balances. Proceeds from such a purchase count under the USD 1,000,000 annual ceiling.

NRI Property Rules in Bangalore: FEMA, TDS, Repatriation

Overseas Indians who invest in Bangalore homes deal with two sets of law. Foreign exchange regulation under FEMA sets what may be bought and how money moves. Income tax law decides what is owed when the home is sold. Each question below covers one stage of that journey, from choosing the property to wiring the proceeds out of India.

Which Properties Are Allowed?

Anything residential or commercial, with no RBI permission needed. That holds for an NRI and for an OCI cardholder alike, under the 2019 FEMA rules on non-debt instruments. How many flats, houses or offices an NRI holds is not restricted. Barred categories are farm land, plantation property and farm houses.

The test is how the land is classified in law. A plot sold under a "farm land" banner is out. So is any site on revenue land awaiting conversion to residential use. If you are eyeing a plot near the city's edge, ask for the conversion order and the sanctioned layout first.

Property can also arrive without a purchase. A relative, resident in India or abroad, may gift residential or commercial property. Inheritance from someone who held the asset lawfully may include farm land, which the heir can keep or sell. Buying new agricultural land stays prohibited.

How Should the Price Be Paid?

The money has to flow through banks. The permitted sources are a remittance from overseas, the NRE account (Non-Resident External), the FCNR deposit (Foreign Currency Non-Resident) and the NRO account (Non-Resident Ordinary). Travellers' cheques and foreign currency notes are refused.

Pick the source with the exit in mind. Money that came in by remittance, or is held in NRE and FCNR balances, can be repatriated later. NRO balances are mostly India-earned income and face a stricter annual limit.

Financing is available too. NRIs can borrow from banks and housing finance firms and repay by remittance, from NRE or NRO funds or from rent. Instalments paid in foreign exchange or out of NRE and FCNR balances are treated as foreign exchange spent on the home. Try the EMI calculator to see the monthly outgo.

Who Handles the Paperwork From Abroad?

A PAN card is essential for buying, selling or collecting rent. Many NRIs cannot attend every signing in the city, so a trusted relative or adviser usually acts under a power of attorney. It ought to identify the property and list each task, for example executing and registering the sale deed.

A document signed overseas is generally attested by an Indian embassy or consulate, or carries an apostille in countries where that applies. After it arrives in India it needs stamping in Karnataka before the sub-registrar will accept it. Keep the authority narrow and the agent someone you trust fully.

What Happens at Resale: Tax and TDS?

India taxes the gain. Hold the property longer than two years and the gain is long-term, taxed at 12.5% with surcharge and cess added, and no indexation. Hold it for two years or less and it is short-term, taxed on the seller's slab.

The purchaser withholds tax before settling with an NRI. Section 195 of the 1961 Act, which used to govern this, was replaced from 1 April 2026 by Section 393 of the 2025 Act. The withholding uses the gains rates just given and not the 1% levied on resident sellers.

Because deduction is often worked out on the whole price, an NRI with a small gain can seek a certificate for lower deduction before selling. From 1 October 2026, an individual or HUF resident in India who buys from an NRI may pay the TDS using a PAN in place of a TAN. Reinvestment exemptions for a long-term gain used to buy another house apply to NRIs as well.

How Much Can Leave India?

Sale proceeds of a lawfully acquired property can be sent abroad up to the foreign exchange amount first paid for it. For homes, only two properties can use this route.

Anything above that, and proceeds of property paid for from NRO funds, go first into the NRO account. A remittance of up to USD 1,000,000 per financial year, April to March, can then follow. The ceiling counts every NRO remittance of that year, inherited-property proceeds included.

Banks release the money only once the seller has filed the tax forms online. As of 1 April 2026 the new Form 145 replaces Form 15CA and the new Form 146 replaces Form 15CB. Form 146 is the chartered accountant's certificate that tax on the amount remitted has been paid.

A Short List for NRI Buyers

Doing these early avoids trouble later:

Make sure the asset is residential or commercial and is not farm land or a farm house.
Pay by remittance or from NRE and FCNR balances wherever possible, and keep each bank record.
Examine the title and approvals, and look up the RERA registration for a project or resale flat.
Sign a power of attorney limited to the tasks required, if another person will act in Bangalore.
Keep the deed, payment receipts and loan statements ready for the day money leaves India.
Think through TDS and capital gains well before putting the home on the market.

Overseas clients interested in new or ready homes can read about our approach on the NRI page. Treat the rules here as the outline and ask a chartered accountant to review the tax on each sale.