NRI Guide to Buying Property in Mumbai: Tax, Laws & Payment Structures (2025)

If you're an NRI (Non-Resident Indian) looking to buy property in Mumbai, you’re not alone. Mumbai remains one of the top choices for NRIs thanks to its stable real estate market, high rental yields, and strong long-term capital appreciation.

But the process isn’t always straightforward—especially when it comes to taxation, payment rules, and legal formalities. That’s why we’ve created this easy-to-follow guide, so you can make confident and informed decisions when buying your dream home or investment property in India’s financial capital.

✅ Who Can Buy Property in India as an NRI?

Good news! As an NRI or OCI (Overseas Citizen of India), you can legally buy both residential and commercial property in India—without needing prior approval from the RBI.

However, there are some limitations:

• You cannot buy agricultural land, plantation land, or farmhouses (unless you inherit them).
• All purchases must comply with FEMA (Foreign Exchange Management Act) regulations.
• You must route all funds through Indian banking channels, using NRE, NRO, or FCNR accounts.

📄 Documents You’ll Need to Buy a Home in Mumbai

To complete a real estate transaction in Mumbai, you’ll need the following:

• A valid passport and OCI/PIO card (if applicable)
• An Indian PAN card (mandatory for tax and registration purposes)
• Overseas and Indian address proof
• A Power of Attorney (PoA), if you're not present in India during the purchase
• Bank account statements showing the fund source (from NRE/NRO/FCNR accounts)

Tip: Make sure your PoA is notarized and attested at the Indian Consulate in your country of residence.

💸 How to Pay for the Property as an NRI

All property payments must be made in Indian Rupees through:

• NRE Account (Non-Resident External) – fully repatriable
• NRO Account (Non-Resident Ordinary) – partially repatriable
• FCNR Account (Foreign Currency Non-Resident) – held in foreign currency

You can also take a home loan in India from banks like HDFC, ICICI, Axis, or SBI.
Loan EMIs must be paid through your NRE/NRO accounts, and you can claim tax deductions just like resident Indians.

🧾 Tax Rules NRIs Should Know Before Buying Property in Mumbai

Here’s a simplified breakdown of how taxes work when you buy or sell property in India:

🔹 When Buying:

• If you're buying from a resident Indian seller, 1% TDS (Tax Deducted at Source) is applicable (if the property is over ₹50 lakh).
• If you're buying from another NRI seller, the TDS rate jumps to:
• 20% if the property is held for more than 2 years (long-term capital gains)
• 30% if held for less than 2 years (short-term capital gains)

These TDS amounts must be deposited with the Income Tax Department by the buyer, even if you're overseas.

🔹 When Selling:

• You will need to pay capital gains tax:
• 20% on long-term gains (property held for more than 2 years)
• As per slab rates (up to 30%) on short-term gains
• You can reduce or avoid taxes by reinvesting your gains in:
• Another residential property (Section 54)
• Capital gains bonds (Section 54EC)

Important: If you plan to sell property and take funds back abroad, there’s a limit of USD 1 million per financial year, and repatriation is only allowed if the property was purchased using NRE/NRO/FCNR accounts.

💡 How to Save on TDS as an NRI Seller

You can apply for a lower TDS certificate from the Indian tax department using Form 13. This allows you to deduct only what’s required (and not overpay), especially if your gains are minimal or you're claiming exemptions.

You’ll also need a Tax Residency Certificate (TRC) from your country to claim benefits under DTAA (Double Taxation Avoidance Agreement)—this ensures you’re not taxed twice on the same income.

🏦 What About Rental Income?

If you plan to rent out your Mumbai property:

• Rent received is fully taxable in India
• The tenant must deduct 30% TDS before paying you
• You can claim standard deductions (30%) and interest on home loans (up to ₹2 lakh) under Section 24

⚖️ Legal Tips Before You Buy

• Ensure the title of the property is clear and not under litigation
• Verify that the property is RERA-registered, especially if it’s under construction
• Always go through a local legal advisor or work with verified platforms like HomeSharp, who pre-verify properties
• If you're not present, appoint a PoA to execute documents on your behalf

✈️ Why Mumbai is a Top Choice for NRI Investors

• It’s the financial capital of India with excellent capital appreciation
• High rental yields in prime locations like Bandra, Worli, Mahalaxmi, Versova
• Global connectivity and presence of expat communities
• Major infrastructure upgrades like the Mumbai Coastal Road, Metro expansions, and Trans Harbour Links are boosting long-term value

🗣️ A Word from Yazad Irani, CEO of HomeSharp

“For NRIs, Mumbai continues to be one of the most reliable markets to invest in. But the key is legal clarity and smart financial structuring. At HomeSharp, we help NRIs navigate the entire buying journey—from verified listings to taxation and fund transfers—so you can buy with confidence from anywhere in the world.”

🧳 Final Checklist for NRIs Buying Property in Mumbai

✅ Check eligibility (No agricultural land allowed)
✅ Use NRE/NRO/FCNR accounts for payments
✅ Appoint a Power of Attorney if needed
✅ Deduct and file TDS correctly (buyer or seller)
✅ Understand capital gains tax & exemptions
✅ Choose legally verified and RERA-registered properties
✅ Repatriate funds using ITR, Form 15CA/CB, and bank declarations

🚀 Ready to Invest in Mumbai?

Whether you're planning to buy a luxury apartment in Bandra, a sea-view home in Worli, or a future-ready investment in Navi Mumbai—HomeSharp is your trusted partner.

✅ 100% Verified & RERA-Compliant Listings
✅ Legal Due Diligence Reports
✅ Tax & Payment Advisory for NRIs
✅ Personalized WhatsApp Concierge Support

👉 Start your NRI buying journey at HomeSharp.com
Or connect with us directly on WhatsApp for one-on-one assistance.