The FEMA compliance check must happen before the NRI pays any token amount or signs any agreement. Once money has moved — even as a token payment — the transaction has been entered into, and any FEMA non-compliance becomes a contravention requiring compounding with the RBI. The most common mistake GP encounters in NRI property transactions is a client who has paid a significant advance on a property without ever checking the FEMA position — and then discovers that the property is in a restricted category or that the funding source is not permissible.
For NRI sellers, the key issue is Section 195 of the Income Tax Act — which requires the purchaser to deduct TDS at 20% (for long-term capital gains) or 30% (for short-term) on the entire sale consideration before payment. For a property sold for ₹3 crore with a capital gain of ₹40 lakh, the purchaser must deduct ₹60 lakh — leaving the NRI to claim a ₹20 lakh refund after filing the income tax return. The solution is a Section 197 lower-deduction certificate — applied for before the sale closes, which limits TDS to the actual tax on the capital gain. GP applies for Section 197 certificates as a standard part of every NRI property sale.
FEMA permissibility analysis before any money is committed — confirming the property category (residential, commercial — not agricultural or plantation), the permissible funding sources (NRE account, NRO account, inward remittance), and any additional RBI conditions. Simultaneously, GP conducts title due diligence — confirming the seller's ownership, tracing the chain of title, searching for encumbrances, litigation, and pending dues. No NRI property transaction should proceed to payment without both checks completed.
Management of the complete NRI property purchase — from the FEMA check and title due diligence through the sale agreement negotiation and drafting, stamp duty and registration charges advisory, and the registered conveyance deed. GP executes the transaction via a registered power of attorney in India — the NRI does not need to travel to India for the registration. Post-registration, GP obtains the registered document and advises on the mutation application in the revenue records.
Management of the complete NRI property sale — including the Section 197 lower-deduction certificate application (filed before the sale closes, to limit TDS to the actual capital gains tax rather than 20% of the entire sale price), negotiation and drafting of the sale agreement, registration, and FEMA repatriation of the net proceeds to the NRI's overseas account. GP prepares the Form 15CA/CB package required by the authorised dealer bank and manages the complete repatriation documentation.
FEMA advisory and documentation for property gifts between NRIs and India-resident family members. An NRI can gift Indian immovable property to any resident Indian — or to another NRI or OCI who is a close relative. A resident Indian can gift property to an NRI close relative. Each direction of gift has different FEMA implications and different income tax consequences for the recipient. GP advises on the FEMA position, prepares the gift deed, and manages registration — advising on the income tax position for both donor and recipient.
Advisory for NRIs on managing rental property in India — the income tax obligations on Indian rental income (taxed in India at applicable slab rates, with TDS at 30% by the tenant where the tenant is not an individual), the crediting of rental income to the NRO account, the annual repatriation of rental income (subject to the USD 1 million annual cap and Form 15CA/CB), and the management of the property through a power of attorney to a trusted India-based person. GP also drafts lease agreements for NRI-owned properties.
Disputes involving NRI-owned property — including encroachment by neighbours or family members, occupation by tenants who refuse to vacate, disputes with builders on under-construction projects, and inheritance disputes where India-based family members have taken possession of property the NRI has inherited. GP files urgent injunctions in appropriate cases and represents NRI clients in property dispute litigation — managed entirely from India via power of attorney, with the NRI client participating by video conference.
Unlike some other countries, India imposes no limit on the number of residential or commercial properties an NRI can own in India. An NRI can purchase as many residential or commercial properties as they wish — subject to each purchase being FEMA-compliant in its funding and category. The prohibition on agricultural land applies to each purchase — but there is no cap on the total value or number of permitted properties.
An NRI can mortgage Indian property to an authorised dealer bank in India — for the purpose of obtaining a home loan to purchase the property, or as security for a loan for any other purpose. The loan repayment must be from NRE or NRO funds, from rental income of the property, or from inward remittances. NRIs can also obtain home loans from Housing Finance Companies (HFCs) — subject to the lender's credit policies. GP advises on the mortgage documentation and the FEMA position of the loan repayment structure.
The sale proceeds of Indian property (net of taxes) can be repatriated to an NRI's overseas account — subject to a limit of USD 1 million per financial year from NRO credits. Where the sale proceeds exceed this limit, the balance can only be repatriated in subsequent years (each subject to the annual cap) or with RBI approval for a larger remittance. For large property sales, GP advises on the sequencing of repatriation across multiple years and on the RBI approval process where the cap must be exceeded.
The most damaging NRI property problems GP sees are those where the FEMA check was not done before the transaction was entered into. A token payment made on an agricultural property, a purchase funded from an overseas account rather than an NRE/NRO account, a gift to a non-close-relative — each is a FEMA contravention that requires expensive compounding to regularise. GP's standard process is FEMA check first, before any money moves. This one step prevents the vast majority of NRI property compliance problems.
For NRI property sellers, the Section 197 lower-deduction certificate is one of the most valuable services GP provides — and one of the most consistently overlooked by lawyers who handle NRI property transactions only occasionally. GP applies for Section 197 certificates as a standard part of every NRI property sale engagement — not as an optional extra. The saving for a ₹2 crore property sale can exceed ₹10 lakh in avoided TDS overpayment and the cost of the delayed refund claim.
GP manages the complete NRI property transaction in India — the NRI executes a power of attorney before a notary in their country of residence, which GP then uses for all filings and registrations in India. The NRI participates in the transaction by video conference at key decision points — reviewing the agreement, approving the terms, confirming the registration documents. The NRI does not need to travel to India for a standard property purchase or sale. GP has completed property transactions for NRI clients in all six major corridors without the client visiting India.
Managed the complete purchase of a ₹2.8 crore Mumbai residential flat for a Dubai-based NRI. GP confirmed FEMA permissibility (residential property — permitted), verified the funding source (NRE account — freely permissible), conducted title due diligence including 30-year title search and encumbrance certificate, negotiated the sale agreement (adding warranties on OC/CC status, property tax dues clearance, and vacant possession), and registered the conveyance deed via a registered POA in GP's name. The NRI client participated by video conference for the agreement review and the final document verification. The client did not travel to India for the transaction. Total time from instruction to registration: 11 weeks.
Acted for a London-based NRI on the sale of a Delhi residential property for ₹1.8 crore. Without intervention, the purchaser would have deducted TDS at 20% of the sale consideration — ₹36 lakh. GP applied for a Section 197 lower-deduction certificate before the sale agreement was signed, submitting the indexed cost of acquisition, the capital gains computation, and the applicable tax on the gain. The Income Tax Department issued a certificate limiting TDS to ₹21.6 lakh — the approximate tax on the computed capital gain. The saving at completion was ₹14.4 lakh compared to the default TDS position. GP then prepared the Form 15CA/CB documentation and managed the repatriation of the net proceeds to the client's UK account — completing within the financial year's USD 1 million cap.
Advised a New Jersey-based NRI who, on consulting GP before a planned return to India, discovered that a piece of land purchased in 2014 in rural Maharashtra was classified as agricultural in the land records — a FEMA-prohibited category for NRIs. The client had not conducted a FEMA compliance check before the purchase, having relied on a local lawyer who had not flagged the issue. GP filed a compounding application with the RBI's Compounding Authority, setting out the circumstances of the inadvertent contravention, the client's clean FEMA record otherwise, and the absence of any financial gain from the violation. The RBI compounded the contravention on payment of a penalty, regularising the client's position. GP simultaneously advised on the conversion application for the land — seeking a change of classification from agricultural to non-agricultural use under the Maharashtra Land Revenue Code, which was subsequently granted.
Every NRI property engagement begins with the FEMA compliance check — confirming permissibility before any commitment is made. Section 197 lower-deduction certificates are applied for as a standard part of every NRI sale instruction — not as an optional extra requested by those who know to ask for it.
For NRI property disputes — encroachment, occupation, inheritance disputes — the same remote engagement model applies: GP manages the proceedings in India, the NRI client participates by video conference, and travel to India is required only in genuinely exceptional circumstances.
FEMA permissibility, property category, permitted funding sources, due diligence — the ten steps that must be completed before any NRI property purchase begins.
Read Guide →How Section 195 TDS works, what Section 197 does, and the application process — with a worked example showing the saving on a typical NRI property sale.
Read Insight →Whether you are buying, selling, gifting, or managing Indian property from abroad — speak to GP today. FEMA check first, transaction second. Always.
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