Funding a property closing in India from the US involves transferring large sums of money through official banking channels, ideally via a Non-Resident Ordinary (NRO), Non-Resident External (NRE), or Foreign Currency Non-Resident (FCNR) account. Transfer method options include wire transfer, NRE/NRO account transfer, or digital remittance services. Before sending, double-check the closing amount and the recipient’s bank details.
The essential information
- Non-resident Indians (NRIs) can purchase commercial and residential property in India, often using an NRE, NRO, or FCNR bank account.
- Choose the right funding method between wire transfer, NRE/NRO account transfer, and digital remittance services—each of these comes with its own limits, fees, and processing times.
- Digital remittance services often offer more transparent fees and faster processing times, making your transfer simple and secure.
- Always verify the final closing amount and the recipient’s bank details before sending money and keep all transaction records for taxes in both countries.
What to expect when funding a property closing in India
Buying property is an accomplishment no matter where you are, but buying property in India while you’re living in the US is an even more exciting milestone.
However, it’s also a significant undertaking; moving money across borders for a property closing in India can feel overwhelming. Closing on a property often involves time-sensitive transfers of large sums of money, and at Remitly, we know how much accuracy and security matter.
In this article, you’ll learn everything you need to know about funding a property closing in India, including legal considerations, funding options, a simple step-by-step process, and tips for avoiding delays or extra costs when transferring money. With the right tools and preparation, closing on a property in India can be a smooth, secure process.
The basics of NRI property transfers and RBI regulations
The first thing to consider is India’s rules about non-resident Indians (NRIs) purchasing property in the country. The Reserve Bank of India (RBI) oversees and regulates property transactions by NRIs under the Foreign Exchange Management Act (FEMA), which was enacted in 1999.
Under this law, NRIs can buy only certain types of property. NRIs can acquire an unlimited number of the following:
- Residential property such as houses, apartments, villas, etc.
- Commercial property for business in India, such as office spaces, shops, warehouses, etc.
- Non-agricultural land, for example, a residential or commercial lot.
NRIs cannot, however, legally purchase agricultural land, farms, or plantations.
The RBI property rules for NRIs also include approved payment methods. Traveler’s checks and foreign currency in cash cannot be used for these transactions. NRIs looking to buy property must use official banking channels, and the transaction must be completed in the Indian rupee (INR). Using one of the following account types is recommended:
- NRE account: A bank account designed specifically for NRIs, maintained in Indian rupees, to manage income earned outside of India.
- NRO account: A bank account designed specifically for NRIs, maintained in Indian rupees, to manage income earned inside of India.
- FCNR account: A fixed deposit account that holds money in foreign currencies aside from the Indian rupee.
RBI compliance at a glance
- NRIs can legally buy commercial or residential property, but not agricultural property.
- There is no limit on how much of the approved property types NRIs can buy.
- Transactions for property closing in India must go through official banking channels, and using an NRE, NRO, or FCNR account is recommended.
NRI remittance: Which funding method is right for you?
Since a property closing in India involves transferring large sums of money, you want to be sure you’re choosing the right funding method.
Bank wire transfers (SWIFT), NRE or NRO account transfers, and digital remittance services like Remitly are all trusted options. The method you choose will depend on your specific circumstances: how quickly you need to make the transfer and the amount of money involved. Let’s compare these three methods:
| Method | Typical Processing Time | Transfer Limit | Associated Fees |
| Bank wire transfer (SWIFT) | 1 to 5 business days depending on the banks involved | No legal maximum limit—heavily depends on banks involved. Usually ranges from $1,000 to $50,000 per day | Sender fees start around $30 USD, plus any intermediary fees and a recipient bank fee in India |
| NRE/NRO account transfer | 1 to 5 business days depending on the banks involved | No limit | Upfront fees start around $30 USD, plus any intermediary fees and a foreign exchange markup |
| Digital remittance service (Remitly) | 1 to 3 business days for Economy transfers, minutes for Express transfers | Up to $300,000 in a single transfer | Depends on the amount you’re sending—first-time transfers and transfers of over $1,000 cost $0, while transfers under $1,000 cost $3.99 |
A digital remittance service like Remitly can be a practical option for a property closing in India, especially when timing is tight. With Remitly, you can track your transfer in real time, and funds often arrive sooner than with a traditional bank wire. You’ll also see the transfer fee and exchange rate before you confirm, so you know the total cost upfront.
Transferring large sums of money can be nerve-racking, but with a regulated, secure provider, you minimize the risk.
How to transfer funds for a property closing in India: Step-by-step guide
To make the process of closing on your property in India as smooth as possible, follow these simple steps:
- Confirm the final closing amount with your builder, seller, or real estate agent before you send any money. Make sure you get this in writing, and make sure to include any stamp duty or registration fees to avoid surprises later.
- Verify the recipient’s bank details, including the Indian Financial System Code (IFSC), bank account number, and branch if applicable, to avoid mistakes or delays.
- Choose your transfer method (traditional bank wire transfer, NRE/NRO transfer, or digital remittance service), and initiate the transfer with plenty of time (at least 5 days in some cases) before your closing date.
- Track your transfer using the tracking tools given to you by your provider to make sure delivery is smooth and timely.
- Confirm receipt with the recipient once your transfer is complete. Keep all records of the transaction for tax and documentation purposes.
Common mistakes (and how to avoid them)
With transfers involving such large sums of money, there are indeed a few hiccups you can encounter, causing delays or costing you more money than expected.
Incorrect bank account details and other pitfalls can cause unexpected delays, but these are usually easily avoided. Before you send any money, verify the recipient’s account details, and choose the transfer method that fits your timeline best. In addition, take into account any bank holidays—both in the US and India—that may delay your transfer and plan accordingly. Even if there are no bank holidays, it’s a good idea to initiate your transfer a few days early just in case.
Unfavorable exchange rates and hidden fees can also end up costing you more money than planned. This is why it’s important to look for a provider who’s as transparent as possible. Check the USD to INR exchange rate of your provider before you transfer—our guide to the best Indian rupee rates explains what to look for. In addition, ensure you understand the upfront fees, intermediary fees, and recipient fees to avoid surprises.
Finally, maintain records of all documentation related to your property purchase, including any invoices, agreements or contracts, and fund transfer receipts. You will need this to do your taxes both in the US and India.
Legal considerations: Taxes and documentation
When buying property in India, it’s important to consider the tax implications on both the Indian and the US side.
When you buy property in India from the US, you’ll typically need your passport, your Permanent Account Number (PAN), the agreement for sale, and the registered sale deed. If the property costs ₹50 lakh or more and the seller is a resident, you’ll generally withhold 1% tax (TDS) and report it on Form 141 (previously Form 26QB). You may also see Forms 145 and 146 (previously Forms 15CA and 15CB) mentioned, but they don’t apply to money you send into India unless the seller is also an NRI. They’re more relevant if you later sell or rent out the property and send that money back to the US.
Buying property in India from the US usually does not have tax implications on the US side, but this can vary depending on your specific circumstances.
We recommend consulting a tax professional who’s familiar with NRI property transactions in order to avoid any compliance issues.
Make your property closing in India simple
Transferring large amounts of money for a property closing in India can sound overwhelming, but with the right preparation, you can ensure a smooth transaction.
First, understand the RBI rules about which type of property you can buy, and which you cannot: NRIs can buy commercial and residential property, but not agricultural property. Next, choose a reliable funding method that fits your timeline with transparent fees and exchange rates. Finally, prepare all documentation related to your transfer in advance, and keep all of it for your tax records.
With careful planning and a reliable transfer service, funding a property closing in India from the US can be simple and safe. And if you’re planning on living temporarily in India, our guide to the cost of living in India will explain what to expect.
Explore Remitly’s international transfer options when you’re ready to send money to India for your property closing safely and quickly.
FAQs
How much money can an NRI send to India for property?
The US and India do not specify a legal transfer limit between the two countries, so your transfer limit will depend heavily on your bank or transfer service. Remitly allows you to send up to $300,000 in a single transfer, while some NRE/NRO and traditional bank accounts may cap the limit at a lower number.
What documents are needed to fund a property purchase in India?
You will need a variety of identity and status documents as an NRI buying property in India. This includes your Indian passport and proof of US address. You will also need your PAN (permanent account number) card, which is mandatory for all property transactions in India. Financially, you need your NRE/NRO/FCNR account statements and source-of-funds documentation such as an income tax return or wire transfer receipts.
What are the tax implications of buying property in India?
It depends on your situation, but buying property in India can have tax implications in both the US and India, especially if you earn rental income or sell later. A tax professional familiar with NRI property purchases can give you personalized, up-to-date advice.
