Real estate developers and institutional investors in India face long capital cycles, fragmented liquidity, and regulatory friction because property financing remains approval-heavy, transaction processes are highly layered, and capital is typically locked into illiquid assets for extended periods.

As India advances its digital public infrastructure, strengthens compliance frameworks, and accelerates fintech adoption, it presents a promising market for RET. With growing interest in real-world asset tokenisation from certain government authorities, India is setting the stage for tokenisation to reshape how real estate capital is raised, distributed, and governed.

This article explains how real estate tokenisation in India works, where it fits within existing laws, and what it means for buyers, investors, developers, and professionals across the property sector.

Key Takeaways

• Real estate tokenisation in India operates within existing property, securities, and tax frameworks, not outside them.

• Legal structuring and regulatory compliance matter more than blockchain choice.

• Liquidity is improving but remains platform-dependent and non-guaranteed.

• Tokenisation lowers entry barriers without eliminating real estate risk.

• Long-term viability depends on governance, transparency, and investor discipline.

What Is Real Estate Tokenisation?

Real estate tokenisation refers to the process of converting ownership or economic rights in a property into digital tokens recorded on a blockchain. Each token represents a defined interest in the underlying asset, such as rental income, capital appreciation, or fractional ownership.

Real estate tokenisation in India is not about replacing land ownership laws. Instead, it structures property exposure through compliant legal entities and contracts, enabling smaller, traceable participation while preserving regulatory oversight under Indian law.

For homebuyers and students, it offers exposure without full ownership. For HNIs, family offices, and institutions, it enables precision allocation and diversification across assets, cities, and use cases.

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This leads to how this process functions within India’s legal and financial systems.

How Real Estate Tokenisation Works in India

Real estate tokenisation is improving property investment by converting assets into tradable digital tokens. Understanding the legal, financial, and operational workflow is crucial for developers, investors, and institutional participants.

1. Property Selection

Tokenisation begins with income-generating or institutionally viable assets such as commercial offices, logistics parks, or premium residential units. Developers and platforms prioritise properties with stable cash flows, clean titles, and long-term lease visibility.

2. Legal Due Diligence

Legal teams conduct title verification, land-use checks, RERA compliance, lease validation, and encumbrance reviews. This step ensures the asset aligns with Indian property laws and investor protection standards.

3. Valuation

Independent valuers assess market value, rental yield, and risk factors. This valuation defines the token issuance size and pricing, critical for investor transparency and regulatory alignment.

4. Token Creation

Tokens are issued on a blockchain, typically representing economic rights through a special-purpose vehicle or trust structure. Smart contracts govern distribution, transfers, and disclosures, reinforcing compliance.

5. Investor Onboarding

Platforms implement strict AML, KYC, and investor accreditation processes. This aligns tokenised offerings with Indian financial regulations and prevents misuse.

6. Trading and Liquidity

Some platforms allow peer-to-peer transfers or controlled secondary trading within regulatory limits. While liquidity remains a concern, real estate tokenisation in India is gradually improving exit optionality.

As real estate ownership models change from physical assets to digital participation, execution quality remains central. BCD India’s long track record in compliant, large-scale development offers a grounded reference point for assets entering tokenised structures.

With the mechanics clear, it’s important to explore the tangible advantages this brings to stakeholders.

6 Benefits of Real Estate Tokenisation

Tokenised property provides wider access, enhanced liquidity, and diversified investment opportunities. Both developers and investors can optimise capital, mitigate risks, and participate in scalable real estate projects.

1. Access to a Broader Investor Base: Tokenisation opens participation to retail investors, HNIs, and global Indians, expanding capital sources beyond traditional debt or private equity.

2. Faster Capital Raising: Digital issuance reduces fundraising timelines by standardising documentation, onboarding, and settlement.

3. Reduced Reliance on Traditional Financing: Developers can lower dependence on bank loans, improving balance sheet flexibility and project viability.

4. Lower Investment Thresholds: Fractional tokens allow participation at smaller ticket sizes, benefiting first-time buyers and young professionals.

5. Enhanced Liquidity: Compared to direct property sales, tokenised interests offer relatively faster exit routes within platform frameworks.

6. Diversification Opportunities: Investors can spread exposure across cities, asset types, and lease tenures, strengthening portfolio resilience.

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To fully grasp its potential, one must also consider the various forms it can take.

5 Types of Real Estate Tokenisation

Real estate tokenisation in India is not a single structure but a set of legally engineered models designed to fit within existing property, securities, and trust laws. Each model differs in how investor rights are defined, how income is distributed, and how regulators view the instrument.

1. Economic-Right Tokens (Cash Flow–Linked Tokens)

These tokens provide investors with rights to a share of rental income or capital appreciation without direct ownership of the property. In India, such structures are typically routed through SPVs or LLPs to comply with the Companies Act, 2013, and are aligned with contract law rather than land transfer laws. They are commonly used for Grade A offices and leased commercial assets where predictable yields matter more than title transfer.

2. Revenue-Sharing Tokens

Revenue-sharing models distribute periodic income based on net operating income after expenses, similar to structured real estate notes. These arrangements must comply with Indian tax laws, including income classification under “Income from Other Sources” or “Business Income,” as applicable. According to RBI data, commercial real estate rental yields in India typically range between 6-8%, making this model attractive for HNIs and family offices seeking steady cash flows.

3. Trust-Based Fractional Ownership Tokens

In this structure, property is held through a trust or trustee-managed vehicle, with tokens representing beneficial interest. This model draws parallels with REIT frameworks regulated by SEBI, though most current platforms remain outside listed REIT regulations. 

4. Debt-Linked or Structured Yield Tokens

These tokens resemble secured real estate–backed instruments, where investor returns are linked to fixed or floating yield structures rather than property upside. Such models must carefully comply with SEBI’s regulations on debentures and collective investment schemes to avoid regulatory misclassification. They are often used for construction-stage or bridge-financing scenarios.

5. Hybrid Token Models

Hybrid structures combine rental income rights with partial capital appreciation participation. These are legally complex and require precise drafting of shareholder agreements, waterfall clauses, and exit triggers. In India, these models often rely on SPVs with tightly defined investor rights to remain compliant with RERA and corporate governance norms.

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Once the type is chosen, the next step is implementing the tokenisation process.

How to Tokenise Real Estate in India: A Step-by-Step Guide

Tokenising real estate in India is a structured, compliance-driven process that sits at the intersection of property law, securities regulation, and financial technology. It requires asset owners to translate physical ownership and cash flows into legally enforceable digital representations without violating existing statutes.

1. Asset Identification and Structuring

The process begins with selecting stabilised, income-generating assets, typically Grade A commercial offices, warehouses, or leased retail, where title clarity and cash flow predictability are high. Assets are usually ring-fenced within an SPV or LLP to comply with the Companies Act, 2013, and to isolate project risk.

2. Title Verification and Legal Due Diligence

Comprehensive due diligence is conducted under Indian property law, covering land title, encumbrances, zoning, and RERA registration where applicable. A clean title is critical, as tokenisation does not bypass the Transfer of Property Act, 1882, or state-level land records systems.

3. Valuation and Yield Assessment

Independent valuers registered under the Companies (Registered Valuers and Valuation) Rules, 2017, assess asset value using income capitalisation and discounted cash flow methods. Commercial real estate yields in major Indian cities typically fall in the mid-single-digit range, forming the basis for token pricing and investor return projections.

4. Legal Entity and Investor Rights Design

Tokens are mapped to economic or beneficial interests rather than direct land ownership, avoiding restrictions under state stamp and registration laws. Shareholder agreements, trust deeds, or debenture documents clearly define voting rights, income distribution waterfalls, and exit mechanisms.

5. Token Creation and Smart Contract Deployment

Smart contracts encode ownership units, income distribution logic, and transfer restrictions on a blockchain ledger. While blockchain technology enables automation, contractual enforceability remains governed by the Indian Contract Act, 1872, making legal drafting as important as code.

6. Regulatory Classification and Compliance Review

Structures are assessed to ensure they do not fall under SEBI’s Collective Investment Scheme regulations unless explicitly registered. Depending on design, compliance may also involve SEBI norms for debentures, RBI guidelines on payment flows, and FEMA provisions for non-resident participation.

7. Investor Onboarding and KYC Controls

Platforms implement KYC, AML, and source-of-funds checks in line with the Prevention of Money Laundering Act (PMLA) requirements. Investor eligibility, including any accreditation thresholds, is clearly defined to manage risk and regulatory exposure.

8. Custody, Reporting, and Ongoing Disclosure

Independent custodians or trustees safeguard documents, cash flows, and compliance records. Periodic reporting on occupancy, lease performance, and distributions mirrors disclosure standards seen in SEBI-regulated REITs, enhancing transparency for investors.

9. Secondary Transfers and Exit Frameworks

Token transferability is typically restricted through contractual clauses to remain compliant with securities and property laws. Where secondary trading is permitted, it is structured as a private transfer mechanism rather than an open exchange, reflecting India’s cautious regulatory stance.

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Success also depends on recognising the critical factors that influence each tokenised asset.

11 Factors to Consider When Tokenising Real Estate

Successful real estate tokenisation in India depends less on technology and more on how carefully legal, financial, and regulatory fundamentals are structured. Each decision directly affects compliance, investor confidence, and the long-term viability of the tokenised asset.

1. Type of Interest: Clearly define how tokens confer rights to rental income, capital appreciation, or a structured combination, as this determines investor expectations and regulatory treatment.

2. Legal Entity: Assets are typically housed within SPVs, LLPs, or trusts to ring-fence liabilities and align with the Companies Act, 2013, and Indian ownership norms.

3. Smart Contracts: Smart contracts must precisely encode distribution schedules, governance rights, and transfer restrictions while remaining enforceable under the Indian Contract Act, 1872.

4. Securities Regulations: Token structures must be carefully designed to avoid unauthorised public offerings and comply with applicable SEBI regulations governing securities or investment schemes.

5. Asset Type and Location: Institutional-grade commercial assets in well-regulated urban markets generally provide stronger lease stability, valuation transparency, and risk-adjusted returns.

6. Tokenisation Ratio: Issuing tokens beyond prudent asset value thresholds can weaken yield sustainability and undermine investor confidence.

7. Mortgage Issues: Any existing charges, liens, or lender rights must be fully disclosed and contractually addressed before token issuance.

8. Tracking Tokenholders: Maintaining an accurate and auditable tokenholder registry is essential for governance, compliance reporting, and income distribution.

9. International Sales: Allowing non-resident participation requires strict adherence to FEMA regulations governing foreign investment and repatriation.

10. Tax and Reporting: Rental income, interest, and capital gains distributions must comply with the Income Tax Act, 1961, and applicable withholding requirements.

11. AML, KYC, and Accreditation: Secure onboarding processes under PMLA guidelines protect platforms, issuers, and investors from regulatory and reputational risk.

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These factors must be understood alongside India’s changing legal and regulatory framework.

6 Legal and Regulatory Frameworks Governing Real Estate Tokenisation in India

Real estate tokenisation in India operates within existing financial, property, and foreign exchange laws rather than a standalone crypto-specific statute. Understanding how these frameworks intersect is critical for developers, platforms, investors, and advisors seeking compliant and scalable structures.

1. Foreign Exchange Management Act (FEMA)

FEMA governs any foreign participation in tokenised real estate, including investments by NRIs and overseas investors. Tokens offering economic exposure to Indian property must align with FDI norms, sectoral caps, pricing guidelines, and repatriation rules administered by the RBI.

2. IFSCA Initiatives

The International Financial Services Centres Authority has emerged as a regulatory testbed for digital securities and tokenised assets. Through its FinTech regulatory sandbox, IFSCA allows controlled experimentation with asset-backed tokens, enabling platforms to test compliance, custody, and settlement models.

3. GIFT City as a Tokenisation Hub

GIFT City provides a ring-fenced jurisdiction where tokenised real estate instruments can be structured under global-standard regulations. Its unified regulator model and dollar-denominated system reduce friction for cross-border participation while maintaining regulatory oversight.

4. SEBI Regulatory Oversight

Depending on structure, tokenised real estate may fall under SEBI regulations governing securities, REITs, or collective investment schemes. Revenue-linked or profit-participating tokens risk classification as securities, requiring disclosures, investor suitability checks, and distribution controls.

5. RERA Compliance of Underlying Assets

All residential and applicable commercial projects must comply with the Real Estate (Regulation and Development) Act, 2016. Tokenisation does not exempt assets from RERA obligations related to registration, disclosures, escrow norms, and delivery timelines.

6. Taxation, AML, and Reporting Obligations

Rental income and capital gains from tokenised assets are taxed under the Income Tax Act, 1961, with applicable TDS provisions. Platforms must enforce KYC and AML compliance under the PMLA to prevent misuse and ensure traceability of funds.

This layered regulatory environment makes legal structuring a foundational requirement rather than an afterthought in India’s real estate tokenisation system.

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Even with regulation, challenges persist that require careful planning.

5 Challenges in Real Estate Tokenisation in India

While tokenisation introduces efficiency and access into property markets, its adoption in India faces structural, regulatory, and operational constraints. For developers, investors, and professionals, understanding these challenges and the solutions emerging around them is essential to assessing risk and long-term viability.

1. Lack of Regulatory Clarity

India does not yet have a single statute governing real estate tokenisation, leaving platforms to operate across SEBI, RBI, FEMA, and RERA frameworks. This raises questions about whether tokens are considered securities, collective investment plans, or digital ownership representations.

Solution:
Platforms are increasingly structuring tokens through SPVs or LLPs compliant with the Companies Act and SEBI norms, while sandbox initiatives under IFSCA at GIFT City offer a regulated testing environment for tokenised assets.

2. Technology Integration and Cost Burden

Deploying blockchain infrastructure involves smart contract development, cybersecurity audits, custody systems, and compliance tooling, which raise upfront costs for developers and PropTech firms. Smaller developers often struggle to justify these investments at scale.

Solution:

White-label tokenisation platforms and permissioned blockchains are reducing costs by offering modular infrastructure, audited smart contracts, and shared compliance layers aligned with Indian IT and data protection standards.

3. Low Investor Awareness and Trust Gap

Many Indian homebuyers and HNIs remain unfamiliar with tokenised ownership, fractional rights, and blockchain settlement, leading to hesitation despite attractive yield propositions. Trust deficits are amplified by past crypto volatility.

Solution:

Education-led onboarding, SEBI-style disclosures, property-level cash flow reporting, and RERA-aligned documentation are being used to mirror traditional real estate transparency and build investor confidence.

4. Limited Secondary Market Liquidity

Secondary trading of real estate tokens remains thin due to regulatory uncertainty and the absence of regulated exchanges, restricting exit flexibility for investors seeking short- to medium-term liquidity.

Solution:

Closed-network trading windows, periodic buyback mechanisms, and migration toward regulated digital asset exchanges under IFSCA frameworks are gradually improving liquidity without compromising compliance.

5. Dependence on Platform Governance and Reliability

Token holders rely heavily on platform operators for asset management, rent distribution, compliance reporting, and dispute resolution, making governance failures a material risk.

Solution:

Leading platforms are appointing independent trustees, third-party custodians, and statutory auditors, while embedding on-chain governance and escrow-controlled cash flows to reduce single-entity risk.

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Investors can mitigate these risks by following strategic precautions.

8 Tips for Investors to Make Safer Tokenised Decisions

Tokenised property introduces new access points, but it also shifts responsibility onto investors to assess structure, governance, and compliance. These safeguards are particularly critical in real estate tokenisation in India, where regulation is still changing, and platforms differ widely in quality.

1. Evaluating Platform Credibility: Check if the platform operates through an SPV, LLP, or trust structure compliant with the Companies Act and SEBI norms. Verify the presence of independent trustees, audited financials, and clearly disclosed fee structures.

2. Checking Property Fundamentals: Assess the underlying asset as you would any physical property, including location quality, tenant profile, lease tenure, and yield stability. Rental agreements, occupancy rates, and operating expenses should be transparently disclosed.

3. Reviewing Legal Ownership Models: Confirm how token holders derive economic rights, be it through equity in an SPV or beneficial interest in a trust. Legal opinions should clearly define voting rights, exit rights, and dispute resolution mechanisms under Indian law.

4. Diversifying Across Multiple Properties: Avoid concentrating exposure in a single asset or city, even if projected IRRs appear attractive. Diversification across commercial, logistics, and mixed-use assets reduces location-specific and tenant-specific risk.

5. Watching Liquidity Dynamics: Understand how and when exits are permitted, including secondary trading windows, lock-in periods, and buyback provisions. Limited liquidity should be priced into return expectations.

6. Monitoring Cash Flow Cycles: Track rental collection schedules, expense deductions, and distribution timelines, which often operate quarterly rather than monthly. Consistency in payouts is a key indicator of platform discipline.

7. Tracking Regulatory Changes: Stay informed on updates from SEBI, RBI, IFSCA, and tax authorities, as classification changes can affect token treatment. Regulatory clarity directly impacts liquidity, taxation, and platform operations.

8. Avoiding Hype-Driven Decisions: Ignore marketing-led yield projections disconnected from lease fundamentals or market benchmarks. Long-term income stability matters more than short-term price appreciation in tokenised real estate.

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These precautions also point toward the broader outlook for the tokenisation market.

Future Prospects of Real Estate Tokenisation

Real estate tokenisation is transitioning from experimentation to structured deployment as India’s digital and regulatory infrastructure matures. The next phase will be shaped by policy clarity, institutional participation, and integration with mainstream financial systems.

1. Fast Market Growth

India’s digital real estate market is scaling alongside rising investor demand for fractional access to stabilised, income-generating assets, particularly in commercial segments.

• Technology Enablers in Focus: Blockchain-based asset registries and automated distribution engines are being deployed to manage fractional ownership at scale while preserving immutable transaction records.

• Founder-Led Market Momentum: Early-stage platforms are concentrating on Grade A office assets in Bengaluru, Mumbai, and NCR, prioritising rental yield visibility over speculative capital appreciation.

2. Greater Regulatory Clarity

Developments at GIFT City under IFSCA and SEBI’s shifting approach to digital securities are expected to define clearer classification and compliance frameworks.

• Compliance-First Platform Architecture: Tokenisation platforms are embedding regulatory logic into issuance workflows to align with securities law, RERA disclosures, and audit-ready reporting standards.

• Designing for Policy Growth: New entrants are structuring offerings around SPVs and trust-based models to remain adaptable as India’s digital asset regulations mature.

3. 24/7 Global Trading

Blockchain settlement enables round-the-clock participation from global investors, expanding controlled offshore access to Indian real estate assets.

• Automated Settlement Infrastructure: Smart contracts are facilitating near-real-time settlement, ownership updates, and rental distributions without manual reconciliation.

• Liquidity-Conscious Platform Strategy: Most platforms continue to limit secondary transfers to verified participants, balancing liquidity creation with regulatory discipline.

4. Integration With Fintech and DeFi

Tokenisation is converging with regulated fintech rails to improve capital efficiency, transparency, and operational resilience.

• Regulated Financial Connectivity: Integration with RBI-compliant escrow accounts and API-driven banking layers is reducing friction across onboarding, collections, and payouts.

• Controlled Experimentation Models: Rather than open DeFi exposure, Indian platforms are favouring permissioned blockchain environments to preserve governance and investor protection.

5. Institutional Participation

Family offices and alternative investment funds are beginning to allocate selectively to tokenised real estate, raising governance expectations.

• Institutional-Grade Data Systems: Platforms now offer dashboards with real-time NAV tracking, tenant performance analytics, and compliance documentation.

• Shift Toward Conservative Structures: Offerings are being redesigned around third-party valuation, trustee oversight, and predictable income streams to meet institutional risk frameworks.

6. Governance-First Startup Models

Indian tokenisation platforms are increasingly positioning real estate tokens as long-term investment instruments rather than trading products.

• Integrated Operating Stacks: End-to-end systems now combine legal documentation, token issuance, investor reporting, and compliance monitoring within a single platform.

• Yield-Led Product Positioning: Startups are emphasising long-duration assets, conservative exposure, and transparent cash-flow reporting, aligning tokenised real estate with traditional portfolio construction logic.

Insights from industry leaders can help contextualise these prospects.

Ashwinder R. Singh’s Perspective on Bridging Traditional Real Estate and the Tokenised Future

Ashwinder R. Singh stands at the intersection of finance, real estate, and PropTech, making him a credible voice in the real estate conversation. With senior leadership experience across global banking institutions and India’s largest real estate platforms, he brings rare depth in risk management, capital structuring, and investor trust, foundational elements for any tokenised asset platform. 

His transition from banking to real estate entrepreneurship laid critical groundwork for India’s PropTech growth. As a co-founder of IndiaHomes, one of India’s earliest tech-enabled real estate platforms, and later as CEO at JLL Residential India and ANAROCK, Mr. Singh helped institutionalise data, advisory standards, and technology-led decision-making in a fragmented sector. These experiences are directly relevant to real estate tokenisation, where valuation discipline, legal clarity, and investor confidence determine if digital ownership models can scale responsibly.

Today, as Vice Chairman and CEO of BCD Group, Mr. Singh is leading large-scale, future-ready developments that integrate digital advancement, sustainability, and long-term community value. His broader influence extends into policy and public education through roles with CII, NAR-India, and RICS School of Built Environment and as a regular keynote speaker, where he consistently emphasises ethical structuring, regulatory alignment, and investor protection. 

His insights reach a wider audience through Republic TV’s R Estate, where he decodes changing real estate and investment trends for homebuyers, investors, and professionals dealing with new asset classes, including tokenised real estate.

Colonel Sirinder Raj Singh's Legacy: The Basis of Leadership

Underlying this philosophy is a deeply rooted legacy of service and integrity. Mr. Singh’s father, the late Colonel Sirinder Raj Singh, exemplified duty beyond self, from commanding infantry units in the 1971 Indo-Pak War to overseeing the historic surrender of arms at Dhaka and later serving the United Nations in Cambodia, where he made the ultimate sacrifice in 1993. 

This legacy of discipline, moral authority, and accountability continues to shape Ashwinder R. Singh’s approach to building institutions, be it in physical real estate or its emerging digital extensions.

Read Ashwinder R. Singh’s Biography to understand how principled leadership, financial rigour, and long-term vision are shaping India’s transition from traditional property ownership to the next frontier of real estate tokenisation.

Conclusion 

As India’s real estate sector formalises through RERA compliance, digitised land records, and stronger securities oversight, tokenisation offers a credible pathway to generating liquidity in otherwise illiquid assets while preserving legal ownership, governance, and income visibility.

For homebuyers, investors, developers, and industry professionals, real estate tokenisation in India introduces a framework where access, transparency, and capital efficiency improve without diluting regulatory safeguards. Its long-term success will depend on platform credibility, alignment with Indian securities and property laws, and responsible participation rather than speculative adoption. 

Understand what real estate tokenisation means for long-term investors, developers, and homebuyers. Subscribe to Ashwinder R. Singh’s newsletter for grounded analysis and policy-aware perspectives.

FAQs

1. Can tokenised real estate be inherited or transferred to legal heirs in India?

Yes. Inheritance depends on the underlying legal structure, typically an SPV or trust, where token ownership transfers as per succession laws and platform documentation.

2. How are rental distributions handled for token holders?

Rental income is credited proportionately to token holders after expenses, usually via escrow accounts, based on ownership recorded on the platform’s cap table.

3. Does tokenisation reduce stamp duty or registration costs?

No. Stamp duty and registration apply at the asset or SPV level; tokenisation does not exempt properties from state-level statutory charges.

4. Are tokenised real estate investments eligible for bank financing or pledging?

Currently, Indian banks do not accept tokens as collateral; financing remains limited to the underlying property-owning entity, not fractional token units.

5. What happens if the tokenisation platform shuts down?

Investor rights remain tied to the legal entity owning the asset, provided custodial agreements and trustee safeguards are properly structured and documented.