NRE, NRO and FCNR Accounts for Land Deals (2026)

The three accounts at a glance

The table summarises the RBI Master Direction on deposits and accounts. We read it on the RBI website; we did not read any bank's own product page and state no interest rate, charge or minimum balance.

NRE account

Paragraph 5(A) allows NRIs and PIOs to open NRE accounts in Indian rupees. The account may be a savings, current, recurring or fixed deposit. Inward and outward remittances through the account are permitted, loans against the funds may be granted subject to usual margins, and current income such as rent, dividend, pension or interest is a permitted credit if tax is deducted, paid or provided for.

The Master Direction states that interest is exempt from income tax. That sentence comes from the text of the Direction, and tax law changes, so confirm the current position on incometaxindia.gov.in before you rely on it. For a land buyer, the NRE account is usually the cleanest route: money comes in from abroad, and the funds are freely repatriable if the land is later sold under the permitted conditions.

NRO account

Paragraph 5(C) lets any person resident outside India open an NRO account, in Indian rupees for bona fide rupee transactions. It can be a savings, current, recurring or fixed deposit. Balances can be repatriated only for current income and up to USD 1 million per financial year by NRIs and PIOs, subject to the Remittance of Assets Regulations, 2016. Transfers to an NRE account count within the limit.

The NRO account is where Indian income lands: rent, farm income received in India, and often the proceeds of sale of inherited land. It can also be used for a land purchase: paragraph 3.3(1) of the property Master Direction lists a debit to an NRO account among the permitted payment sources, alongside inward remittance and NRE or FCNR(B) accounts. Loans from the account are available to the holder or a third party, subject to usual norms.

FCNR(B) account

Paragraph 5(B) lets NRIs and PIOs hold an FCNR(B) account in any permissible foreign currency, defined as a freely convertible currency. It can only be a term deposit. Paragraph 5(B)(iii) applies the NRE rules on joint accounts, repatriation and loans with necessary modifications. For a land buyer, this is a useful way to hold foreign currency until the deal is certain, but the money needs to be converted to rupees for payment in India.

Paying for land: what RBI allows

The RBI Master Direction on acquisition and transfer of immovable property says at paragraph 3.3(1) that payment may come from funds received in India through banking channels by inward remittance, or by debit to an NRE, FCNR(B) or NRO account. Paragraph 3.3(2) bars payment by traveller's cheque, foreign currency notes or any other mode. Paragraph 8.2, on repatriating sale proceeds, looks back at how you paid: purchase money paid in foreign exchange received through banking channels or from FCNR(B) or NRE accounts counts for repatriation.

Practically, pay for land from the account whose source you can prove, and keep the bank advice for every transfer. If you pay from NRO funds, the sale money may sit in a less freely repatriable account, so ask the bank how the later remittance will be handled before you choose. Remember that these permissions do not cover agricultural land, a farm house or plantation property; see OCI vs NRI vs PIO: what each can buy.

Receiving and sending sale proceeds

When you sell, the money will come to an Indian account of the NRI seller. Paragraph 8.2 allows repatriation for non-agricultural property when conditions are met, with the two-residential-property limit. The NRO account route has its own USD 1 million per financial year limit. We could not confirm from the two Master Directions how the two limits interact in a given case, or the documents each bank asks for.

Withholding tax is deducted from the sale price before it reaches you; see TDS section 195 when buying from an NRI and capital gains and DTAA for NRI sellers. For the full sequence, read repatriating land sale proceeds.

Joint accounts and family

The NRE account may be held jointly with eligible NRIs or PIOs, or with a resident relative on a former or survivor basis (paragraph 5(A)(x)). The NRO account may be held with residents on a former or survivor basis, or among NRIs and PIOs (paragraph 5(C)(vi)). A resident joint holder is often a convenience for an NRI who lives abroad.

A joint account does not by itself make the resident holder an owner of land bought with the money. Ownership is decided by the sale deed. Our guide to power of attorney for NRI land transactions covers the safe way to let a family member sign for you.

Mistakes that block a deal

• Paying a token amount in cash or by a foreign currency note. RBI lists only banking channels.
• Paying from a resident family member's account, which breaks the trail of source.
• Not keeping bank advices, which are needed when proceeds are repatriated.
• Putting sale proceeds into the wrong account type and then finding the limit lower than expected.
• Believing a broker who says that an NRI can buy farmland through a joint account. See NRI land fraud.
• Treating a power of attorney as ownership. See GPA land sales risk.

Where to read more

Our broad guides are the NRI land investment guide, FEMA 1999 and Indian land and can NRIs buy agricultural land in India. Verify the land first: the land due diligence checklist.

What is unconfirmed

We could not confirm any bank's interest rate, minimum balance, charges or documentation list, because we read only RBI pages. We did not confirm the current income tax treatment of interest on NRE, NRO and FCNR(B) deposits or tax deducted on NRO interest. We could not confirm how the property Master Direction and the deposit Master Direction limits interact on repatriation of sale proceeds. The Master Direction on deposits and accounts we read may have been amended since; check the RBI website.

Frequently Asked Questions

Sources

• RBI Master Direction on Deposits and Accounts (FEMA Deposit Regulations, 2016): NRE, NRO and FCNR(B) accounts
• RBI Master Direction on Acquisition and Transfer of Immovable Property in India
• RBI: Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 (Notification FEMA 21(R)/2018-RB)