Unlocking Real Estate Opportunities: Can Overseas Indian Citizens Purchase Immovable Property in India?

Shivendra Pratap Singh


High Court Lucknow


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The Indian diaspora is scattered across the globe, establishing new homes and building prosperous lives. Yet, for many, the connection to their homeland remains unbroken, often manifesting in the desire to own a piece of their native land. For the Overseas Indian Citizen (OCI), questions surrounding property rights in India are paramount. Here we shed light on the ins and outs of purchasing immovable property in India as an OCI.

The OCI Defined:

The Overseas Citizenship of India (OCI) is a form of permanent residency that allows individuals of Indian origin to enjoy many rights in India, although it is not equivalent to dual citizenship. One of the significant privileges extended to OCI cardholders revolves around property acquisition.

Rights of OCI Cardholders to Purchase Property in India:

Residential and Commercial Property:

  • Yes, they can! OCI cardholders have the right to purchase residential and commercial properties in India.
  • No Restriction on Number: There isn’t a cap on the number of residential or commercial properties they can own in India.

Agricultural Land, Farmhouse, and Plantation Property:

  • A Clear No: OCIs are prohibited from purchasing agricultural land, farmhouses, and plantation properties. However, they can inherit such properties.

How to Go About the Purchase:

  1. Financial Transactions: The transaction must be carried out in Indian Rupees through regular banking channels using funds in a Non-Resident External (NRE) account, Non-Resident Ordinary (NRO) account, or Foreign Currency Non-Resident (FCNR) account.
  2. Repatriation of Funds: While selling a property, repatriation (transfer of money from an Indian account to a foreign account) of the sale proceeds is limited to the equivalent of two residential properties.
  3. Legal Due Diligence: Always ensure that the property has clear legal titles, free from any encumbrances. It’s advisable to engage a local lawyer to navigate the legal landscape.

Tax Implications:

  • Capital Gains Tax: Just like Indian residents, OCIs are subject to capital gains tax on profits generated from the sale of property in India.
  • Rental Income: If an OCI chooses to rent out their property, the rental income is taxable in India.

Mortgage Possibilities:

  • Securing a Loan: OCIs can avail housing loans from Indian banks to purchase property. The repayment of the principal and interest should be made using the NRE/NRO/FCNR accounts.

In Conclusion:

The allure of owning property in India is evident for many who’ve grown up amid its rich tapestry of cultures and landscapes. For the Overseas Indian Citizen, the journey to property ownership is laden with opportunities and considerations. While they enjoy the privilege to own residential and commercial spaces, agricultural restrictions and legal processes warrant close attention. With proper research and due diligence, purchasing immovable property in India can be a rewarding endeavor, linking them to their roots.