Finding 1: FEMA / RBI Master Direction — NRI Immovable Property Rules (Active 2026)
Oracle Run: oracle-2026-04-23-regulatory
Date Compiled: 2026-04-23
Topic: NRI Real Estate / FEMA
Source Tier: S (Primary / Regulatory)
Date Tier: T2 — Governing framework active in 2026 (base regulation 2018, last amended 2024)
Summary
The governing FEMA framework for NRI property acquisition in India remains the FEMA (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 issued by RBI under Section 6(3)(i) of FEMA 1999. No new 2026 NRI-specific property circular has been issued as of April 23, 2026 (verified on RBI press release portal, which showed no FEMA immovable property notification in April 2026).
Key Rules in Force (2026)
| Provision | Status |
|---|---|
| NRI can purchase residential/commercial property | Permitted (unlimited count) |
| NRI cannot purchase agricultural land / farmhouse / plantation | Prohibited (FEMA Regulation) |
| Source of funds | NRE / NRO / FCNR(B) accounts or inward remittance |
| Repatriation of sale proceeds | Up to USD 1 million per FY from NRO account (2 properties for residential) |
| NRI selling to resident — TDS | Buyer must deduct TDS u/s 195 (NOT 194-IA) |
| LTCG rate post Budget 2024 | 12.5% without indexation (for property purchased after July 23, 2024) |
| LTCG rate — pre-July 23, 2024 property | Optionally 20% with indexation OR 12.5% without |
NRI vs Resident Buyer TDS Gap (Critical for Runwal)
- Resident seller: Buyer deducts 1% TDS under Sec 194-IA
- NRI seller: Buyer deducts 20% (LTCG) or 30% (STCG) TDS under Sec 195 + surcharge + cess
- Effective TDS for NRI seller holding >2 years (LTCG): ~12.5%–13.25% post-FY26 Budget
- NRI can obtain Lower Withholding Certificate (Form 13) from Income Tax Officer to reduce TDS at source — procedurally complex; 3–6 week timeline
2026 Watch: Budget 2025-26 Impact
- Finance Act 2025 (effective Apr 1, 2025) brought TDS for NRI property sellers closer to LTCG rate of 12.5%, addressing the earlier 20%/30% mismatch
- Net effect for Runwal NRI buyers: Reduces TDS friction for NRI sellers, potentially improving secondary market liquidity for NRI-owned units and reducing “NRI discount” demanded by sellers
Source URLs
- RBI Master Directions (FEMA) Index: https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10288
- RBI Press Releases (Apr 23, 2026 — no NRI property circular): https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx
- FEMA Immovable Property Regulations 2018: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/FEMA21NT28052018.PDF
Runwal Relevance
- Moderate-positive: No tightening of NRI property rules in 2026
- NRI buyers remain fully eligible for Runwal’s Mumbai coastal / suburban projects
- Lower TDS on sale side may encourage more NRI sellers to list, potentially moderating resale competition
- USD 1M repatriation cap per FY remains unchanged — adequate for single high-end unit resale