East Bengaluru buyer answers
Can NRIs pay for a Bengaluru flat from NRE or NRO, and take the money back later?
Direct answer: Yes to both, with conditions. RBI lets NRIs and OCIs pay through banking channels, by inward remittance or from NRE, FCNR(B) or NRO accounts, but not with traveller's cheques or foreign currency notes. When you sell, your bank can let the proceeds go abroad if you paid in foreign exchange or from NRE/FCNR(B), for up to two residential properties.
Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.
Verify with your CA and lawyer: This page explains RBI's foreign exchange rules for property. It isn't financial, tax or legal advice. Your bank applies these rules to your transaction, your CA handles the tax side, and your lawyer should check the documents.
Most NRI buyers think about the account they pay from for about five minutes, usually when the builder's first demand arrives. It matters far more at the other end, years later, when you sell and want the money in the country you live in. The account you pay from today decides which route that money takes out of India. So it is worth getting right before the first cheque.
The rules sit in two RBI Master Directions: one on acquiring or transferring immovable property under the Foreign Exchange Management Act, 1999 (FEMA), and one on remittance of assets. RBI also publishes plain-language FAQs on property purchase by non-residents. Everything below comes from those three documents.
Who counts as an NRI or OCI for these rules?
RBI's Master Direction defines a Non-Resident Indian as "a person resident outside India who is a citizen of India". An Overseas Citizen of India is "a person resident outside India who is registered as an Overseas Citizen of India Cardholder under Section 7(A) of the Citizenship Act, 1955."
Days spent in India don't settle residence on their own. The same direction quotes a Government of India press release of 1 February 2009: to be treated as resident in India, a person has to satisfy the period-of-stay condition and also show, through the purpose of stay and the type of visa, an intention to stay for an uncertain period. If you are moving back or moving out around the time of the purchase, ask your CA which status applies on the date you pay.
Under the direction, an NRI or OCI "can acquire by way of purchase any immovable property (other than agricultural land/ plantation property/ farm house) in India." A flat in a Bengaluru apartment project falls inside that permission. Farmland on the city's edges does not, so a plot sold as "farm land" needs a much closer look with your lawyer.
Which accounts can I pay from?
The Master Direction says NRIs or OCIs may pay "out of funds received in India through banking channels by way of inward remittance from any place outside India or by debit to their NRE/ FCNR (B)/ NRO account". It adds that such payments "cannot be made either by traveller's cheque or by foreign currency notes".
| How you pay | Allowed for the purchase? | Counts for the two-property repatriation route later? |
|---|---|---|
| Inward remittance from abroad through a bank | Yes | Yes, it is foreign exchange received through banking channels |
| Debit to your NRE account | Yes | Yes |
| Debit to your FCNR(B) account | Yes | Yes |
| Debit to your NRO account | Yes | No, NRO isn't one of the listed sources |
| Home loan repaid from abroad or from NRE/FCNR(B) | Yes | Yes, RBI treats these repayments as equivalent to foreign exchange received |
| Traveller's cheques or foreign currency notes | No | Not applicable |
RBI's FAQ puts the same point simply: payment "has to be received in India through banking channels and is subject to payment of all taxes and other duties/ levies in India." The direction also says any acquisition or transfer by a person resident outside India "should be through banking channels in India."
What does RBI let me take back when I sell?
This is the part people miss. Paragraph 8.2 of the Master Direction says that when an NRI or OCI sells property other than agricultural land, a farm house or plantation property, the authorised dealer bank "may allow repatriation of the sale proceeds outside India" if three conditions are met:
- the property was acquired "in accordance with the provisions of the foreign exchange law in force at the time of acquisition";
- the purchase was "paid in foreign exchange received through banking channels or out of funds held in FCNR(B) account or NRE account";
- for residential property, repatriation "is restricted to not more than two such properties".
So if you bought with money sent from abroad, or from NRE or FCNR(B), the sale proceeds have a route out through your bank, for up to two homes. If you paid from NRO, that route isn't available for the NRO part, and you look at the separate NRO facility below.
The word "may" matters. Your bank decides on the documents you give it. Keep proof of where every payment came from, from the booking amount onwards.
How do home loan EMIs affect repatriation?
Plenty of NRI buyers fund part of the purchase with an Indian home loan. The Master Direction covers this. Where the property was bought out of a housing loan taken under RBI's rupee borrowing rules, and the repayments "are made out of remittances received from abroad through banking channels or by debit to the NRE/ FCNR(B) account", those repayments "may be treated as equivalent to foreign exchange received."
In plain terms: pay your EMIs from abroad or from NRE/FCNR(B), and the loan-funded part can count towards the repatriation route later. Pay them from rent sitting in your NRO account, and it won't count the same way. Your lender sets the loan terms; ask it which accounts it accepts for EMIs. Our page on how a home loan for an under-construction flat is disbursed explains the staging on the loan side.
What about money paid from NRO, or property bought before I moved abroad?
RBI's Master Direction on remittance of assets has a separate facility. Banks may allow NRIs and PIOs (the direction counts OCI cardholders as PIOs), "on submission of documentary evidence", to remit, including transfer to NRE and SNRR accounts, "up to USD one million, per financial year" out of "balances in their non-resident (ordinary) (NRO) accounts/ sale proceeds of assets/ assets acquired in India by way of inheritance/ legacy".
A few conditions come with it:
- If you send it in instalments, all of them go through the same bank.
- For remittances from NRO balances, the bank takes an undertaking that the money comes from your "legitimate receivables in India and not by borrowing from any other person or a transfer from any other NRO account".
- Going above USD 1 million in a financial year needs RBI's prior approval.
- The remittances are "subject to payment of applicable taxes in India".
Property you bought while you were resident in India, or inherited from someone resident in India, is covered by section 6(5) of FEMA. The Master Direction says such a person or their successor "cannot repatriate outside India the sale proceeds of such immovable property without the prior permission of the Reserve Bank", but if they are resident outside India they can use the remittance-of-assets facilities.
If you are selling a third residential property bought with foreign exchange, or a mix of NRE and NRO money went into one flat, ask your bank in writing how it will treat each part before you agree the sale.
Can my spouse who isn't an NRI or OCI co-own the flat?
Yes, for one property, jointly with you. The Master Direction allows a spouse who is resident outside India and is not an NRI or OCI to acquire one immovable property (other than agricultural land, a farm house or plantation property) jointly with the NRI or OCI spouse. The marriage must have been registered and have subsisted "for a continuous period of not less than two years immediately preceding the acquisition", and the payment has to come through banking channels or from a non-resident account. Your lawyer should check this before the names go on the agreement.
Records to keep from the first payment
- Bank statements showing every payment to the builder or seller, and the account each one came from.
- Inward remittance advices or certificates from your bank for money sent from abroad.
- Your home loan statement and the account your EMIs were debited from.
- The agreement for sale, the registered sale deed and the payment receipts. Our checklist of documents to verify before paying a token advance helps at the start.
- A note of how many residential properties you have repatriated sale money for, since the limit is two.
How does tax fit in?
RBI says outright that it "will not issue any instructions under FEMA clarifying tax issues", and that banks must comply with tax law on these remittances. So two separate checks run side by side: your bank looks at the foreign exchange rules, and the tax rules decide what has to be deducted or paid first.
When you buy, the payment is subject to Indian taxes and levies, and buyers have their own TDS duty. Our page on TDS when you buy a flat explains it. When you sell as an NRI, the buyer deducts tax under different rules, covered in our page on TDS when an NRI buys or sells property. If you are buying from abroad without travelling, our guide to buying in Bangalore from the US with a power of attorney covers the process side.
Frequently asked questions
Can an NRI buy a flat in India using an NRO account?
Yes. RBI's Master Direction allows payment by debit to an NRE, FCNR(B) or NRO account, or by inward remittance through banking channels. NRO money doesn't count for the two-property repatriation route when you sell.
How many properties can an NRI repatriate sale proceeds for?
For residential property, RBI restricts repatriation under the foreign exchange route to not more than two properties. The purchase must have been paid in foreign exchange through banking channels or from NRE or FCNR(B) funds.
Can I pay the builder in cash or foreign currency notes?
No. RBI says payments cannot be made by traveller's cheque or foreign currency notes. They have to come through banking channels, from abroad or from your NRE, FCNR(B) or NRO account.
Do home loan EMIs paid from NRE count for repatriation?
Yes. If the property was bought with a housing loan and the EMIs were paid from remittances from abroad or from NRE/FCNR(B), RBI says those repayments may be treated as equivalent to foreign exchange received.
How much can an NRI send abroad from an NRO account?
Up to USD 1 million per financial year, out of NRO balances, sale proceeds of assets or inherited assets, on documentary evidence and after applicable taxes. Above that you need RBI's prior approval.
References
- Reserve Bank of India, Master Direction – Acquisition or Transfer of Immovable Property under Foreign Exchange Management Act, 1999 (updated as on 1 September 2022), Part II paras 2, 3, 4, 8, 10 and 11: https://www.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=10196, accessed 17 Oct 2026
- Reserve Bank of India, Master Direction – Remittance of Assets (updated as on 29 June 2026), paras 2, 3.2, 4.1 and 5: https://www.rbi.org.in/SCRIPTs/BS_ViewMasDirections.aspx?id=10197, accessed 17 Oct 2026
- Reserve Bank of India, FAQs, Part II: Purchase of immovable property in India by non-resident individuals (Q.2, Q.6, Q.7): https://www.rbi.org.in/Scripts/FAQView.aspx?Id=117, accessed 17 Oct 2026
This page explains public rules and processes. It isn't financial, tax or legal advice. acre&key gives buyers advice for free. We are an authorised sales partner for some projects and may be paid by the developer.