FEMA Section 6: NRI Property Purchase Rules in India

Section 6 of the Foreign Exchange Management Act, 1999 is the legal provision that governs capital account transactions in India — including the acquisition and transfer of immovable property by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs). When an NRI buys an apartment in Noida, Mumbai, or Bengaluru, the transaction is conducted under the framework set by Section 6 and the Reserve Bank of India's (RBI's) regulations made under it. Understanding Section 6 is the legal foundation of any NRI property purchase in India.

The FEMA Framework

FEMA replaced the Foreign Exchange Regulation Act (FERA) in 1999 to liberalise India's foreign exchange regime. FEMA recognises two types of transactions:

Current Account Transactions (Section 5)

Day-to-day cross-border transfers — remittances, education fees, medical expenses, travel, family maintenance, royalty payments. These are mostly free under FEMA, with only narrow exceptions requiring RBI approval.

Capital Account Transactions (Section 6)

Transactions that change a person's assets or liabilities — property purchase, investment in shares, taking or giving loans, opening foreign accounts. These are regulated by the RBI through specific regulations issued under Section 6.

What Section 6 Does for NRIs

Section 6 itself does not prohibit or permit specific transactions. Instead, it gives the central government and the RBI the power to regulate capital account transactions and to specify which transactions are allowed without approval, with general approval, or only with case-specific approval. The actual rules for NRI property purchases live in:

• FEMA (Acquisition and Transfer of Immovable Property in India) Regulations 2018 — the current rule set governing NRI/PIO/OCI property transactions
• RBI Master Directions issued from time to time
• Specific RBI circulars updating procedures and reporting

Together with these subordinate rules, Section 6 creates a clear, predictable framework for NRI investment in Indian real estate.

What NRIs Can Buy Under FEMA Section 6

Property Type	NRI Permission	Notes
Residential apartment	Yes, freely	No RBI approval needed; any number of units
Residential plot	Yes, freely	Plot can be in NRI's name
Commercial property	Yes, freely	Office, shop, retail unit
Agricultural land	No	Can only be acquired through inheritance
Plantation property	No	Can only be acquired through inheritance
Farmhouse	No	Can only be acquired through inheritance

Payment Rules Under FEMA

All payments for NRI property purchases must be made through Indian banking channels:

• NRO Account (Non-Resident Ordinary): Funds earned in India (rent, dividends, pension)
• NRE Account (Non-Resident External): Funds remitted from abroad in foreign currency, then converted
• FCNR Account (Foreign Currency Non-Resident): Foreign currency deposits
• Inward remittance: Direct foreign currency remittance through normal banking channels

Cash transactions, traveller's cheques, and foreign currency notes are not acceptable. The audit trail through banking channels is mandatory for FEMA compliance.

Documentation Required

1. PAN Card: Mandatory for all property transactions and tax compliance
2. Passport (current and earlier, if name has changed)
3. Visa or OCI card
4. NRI/OCI status declaration for the property registrar
5. Bank statements showing payment from NRO/NRE account
6. Power of Attorney if the buyer cannot be present for registration — the PoA must be notarised and apostilled in the buyer's country of residence — see our Power of Attorney glossary entry

Section 6 vs Earlier FERA Regime

Pre-1999 FERA was punitive and complex. NRIs needed RBI approval for most property purchases, faced restrictions on number of units, and had limited repatriation rights. FEMA reformed this completely:

• FERA: RBI approval required, limited unit count, complex approvals
• FEMA Section 6: No approval required for residential/commercial property; unlimited unit count; clear repatriation framework

Repatriation of Sale Proceeds

An NRI selling a property bought under FEMA Section 6 framework can repatriate the sale proceeds, subject to:

• Up to two residential properties qualify for repatriation of sale proceeds
• The property must have been held for a minimum period (typically 3 years for repatriation purposes)
• The annual repatriation limit from an NRO account is USD 1 million
• Form 15CA and Form 15CB (CA certificate) are required for repatriation
• Tax clearance must be obtained — the buyer also deducts TDS on the sale

FEMA and Tax Interaction

FEMA governs the foreign exchange aspect of NRI property; the Income Tax Act governs the tax aspect. The two operate in parallel:

• NRIs pay capital gains tax on Indian property sales
• Long-term capital gains qualify for indexation; short-term gains are taxed at slab rates
• NRIs can claim tax treaty benefits if applicable; India has DTAAs with most countries
• Section 24 home loan interest deductions and Section 80C principal repayment deductions also apply to NRIs — see our Section 24 deduction guide

FEMA Section 6 and Forbes Fab Luxe Residences

Forbes Fab Luxe Residences in Sector 4, Greater Noida West — developed by Forbes Global Properties — has a dedicated NRI investment desk that handles all FEMA-compliant documentation, payment routing, and PoA coordination. The project's RERA registration, NBCC construction monitoring, and transparent escrow practices give NRI investors the assurance framework they need. For a complete walkthrough of NRI property buying, read our NRI Guide to Buying Property in India 2026, our FEMA-compliant NRI investment guide, and the NRI investment outlook 2026. Buyers in Greater Noida West specifically should also review our entry on Jewar Airport for the connectivity context.

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