NRI Information
THE FOLLOWING CONTAINS BULLET POINTS ON INFORMATION PERTAINING TO PURCHASE OF PROPERTY BY NON – RESIDENT INDIANS IN INDIA:
- A NON RESIDENT INDIAN IS an Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad. (Persons posted in U.N. organizations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens (NRIs) for the purpose of certain facilities.
- A PERSON OF INDIAN ORIGIN IS A foreign citizen (other than a citizen of Pakistan or Bangladesh) who is deemed to be of Indian origin, if, – he, at any time, held an Indian passport, or – he or either of his parents or any of his grandparents was citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955). Note: A spouse (not being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons only jointly with their NRI spouses. For investments in immovable properties. (A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka, or Nepal), is deemed to be of Indian origin if) – he held an Indian passport at any time, or – he or his father or paternal grand-father was a citizen of India by virtue of the (Constitution of India or the Citizenship Act, 1955 (57 of 1955).
NRI BUYER GUIDELINES
Whether Non resident indian Citizens can acquire property residential or commercial in India? Whether permission of the Reserve Bank is required to be obtained for such purchase?
NON RESIDENT INDIAN CITIZENS can acquire property
(Residential/Commercial) in India. NON RESIDENT INDIAN CITIZENS do not
require permission of Reserve Bank to acquire residential/commercial
property in India
Whether Foreign Citizens can acquire property residential or commercial in India? Whether permission of the Reserve Bank is required to be obtained for such purchase?
FOREIGN CITIZENS of INDIAN ORIGIN whether resident in India or abroad,
can purchase immovable property in India for their bona fide residential
purpose. Reserve Bank has granted general permission to foreign citizens of
Indian origin, whether resident in India or abroad, to purchase immovable
property in India for their bona fide residential purpose. They are, therefore,
not required to obtain permission of Reserve Bank for purchase of immovable
property in Indian for “bonafide residential purpose”.
How is the consideration for purchase of Residential Immovable Property, required to be paid by the Foreign Citizens of Indian Origin?
The purchase consideration for residential immovable property should be met
by foreign citizens of Indian Origin under the general permission either out of
inward remittances in foreign exchange through normal banking channels or
out of funds from NRE/FCNR accounts maintained with banks in India.
Are there any procedural compliances required to be met or complied with by a Foreign Citizen of Indian Origin for purchase of Residential Immovable Property?
Foreign Citizens of Indian Origin are required to file a declaration in form IPI 7
with the Central Office of Reserve Bank at Mumbai within a period of 90 days
from the date of purchase of immovable property or final payment of purchase
consideration along with a certified copy of the document evidencing the
transaction and bank certificate regarding the consideration paid.
Whether Residential Immovable Property be sold by Foreign Citizen of Indian Origin. Whether any permission from the Reserve Bank is required for such sale?
Such property can be sold without the permission of the Reserve Bank.
Reserve Bank has granted general permission for sale of such property.
However, where the property is purchased by another foreign citizen of Indian
origin, funds towards the purchase consideration should either be remitted to
India or paid out of balances in NRE/FCNR accounts.
Whether sale proceeds received from the sale of Residential Immovable Property be remitted out of India?
Sale Proceeds of such property if and when sold can be remitted out of India.
In respect of residential properties purchased on or after 26th May 1993,
Reserve Bank considers applications for repatriation of sale proceeds up to
the consideration amount remitted in foreign exchange for the acquisition of
the property for two such properties. The balance amount of sale proceeds if
any or sale proceeds in respect of properties purchased prior to 26th May
1993, will have to be credited to the ordinary non-resident rupee account of
the owner of the property.
Are there any restrictions or terms and conditions governing the repatriation of Sale Proceeds?
Applications for repatriation of sale proceeds are considered provided the sale
takes place after three years from the date of final purchase deed or from the
date of payment of final installment of consideration amount, whichever is
later.
How can the application for repatriation of sale proceeds be made?
For repatriation of sale proceeds, applications for necessary permission for
remittance of sale proceeds should be made in form IPI 8 to the Central Office
of Reserve Bank at Mumbai within 90 days of the sale of the property.
Whether Foreign Citizens of Indian Origin can acquire or dispose of residential property as and by way of gift? Whether a specific permission in this regard is required to be obtained from the Reserve Bank?
Yes, Foreign Citizens of Indian Origin can acquire or dispose of residential
property as and by way of gift. Reserve Bank has granted general permission
to foreign citizens of Indian origin to acquire or dispose off properties up to
two houses by way of gift from or to a relative who may be an Indian citizen or
a person of Indian origin whether resident in India or not, subject to
compliance with applicable tax laws.
Whether Immovable property held in India, can be transferred by way of gift to relatives/registered charitable trusts/organizations in India? Whether a specific permission in this regard is required to be obtained from the Reserve Bank?
Immovable property held in India, can be transferred by way of gift to
relatives/registered charitable trusts/organizations in India. General
permission has been granted by Reserve Bank to non-resident persons
(foreign citizens) of Indian origin to transfer by way of gift immovable property
held by them in India to relatives and charitable trusts/organizations subject to
the condition that the provisions of any other law, including Foreign
Contribution (Regulation) Act, 1976, as applicable, are duly complied with.
Whether Foreign citizens of Indian Origin can also acquire commercial property in India? Whether there are any exceptions to certain class or categories of properties that are allowed/permitted to be acquired by Foreign citizens of Indian Origin? How are the sale proceeds for the same to be remitted?
Foreign citizens of Indian Origin can also acquire commercial property. Under
the general permission granted by Reserve Bank, properties other than
agricultural land/farm house/plantation property can be acquired by foreign
citizens of Indian origin provided the purchase consideration is met either out
of inward remittances in foreign exchange through normal banking channels
or out of funds from the purchasers’ NRE/FCNR accounts maintained with
banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the
property/final payment of purchase consideration.
Whether Foreign citizens of Indian Origin can dispose off commercial property in India?
Foreign Citizens of Indian Origin can dispose off such properties.
How can the sale proceeds from properties sold by Foreign Citizens of Indian Origin be repatriated out of India?
Sale proceeds of such properties be remitted out of India. Repatriation of
original investment in respect of properties purchased by foreign citizens of
Indian origin on or after 26th May 1993 will be allowed to be remitted up to the
consideration amount originally remitted from abroad provided the property is
sold after a period of three years from the date of the final purchase deed or
from the date of payment of final installment of consideration amount,
whichever is later. Applications for the purpose are required to be made to the
Central Office of Reserve Bank within 90 days of the sale of property in form
IPI 8.
Whether Residential or Commercial Properties owned by Foreign Citizens of Indian Origin be given on rent, if not required for immediate use? Whether rental income or proceeds of such income are eligible for repatriation?
Such properties, Residential or Commercial can be given on rent if not
required for immediate use. Reserve Bank has granted general permission for
letting out any immovable property in India. The rental income or proceeds of
any investment of such income are eligible for repatriation.
Whether NRI’s can obtain loans for acquisition of a house/flat for residential purpose? What are the primary terms and conditions of such loans?
NRI’s can obtain loans for acquisition of a house/flat for residential purpose
from the authorized dealers/financial institutions providing housing finance.
Reserve Bank has granted general permission to certain financial institutions
providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., and
authorized dealers to grant housing loans to non-resident Indian nationals for
acquisition of a house/flat for self-occupation subject to certain conditions.
The purpose of the loan, margin money and the quantum of loan will be at par
with those applicable to housing loans to residents. Repayment of loan should
be made within a period not exceeding 15 years out of inward remittances or
out of funds held in the investors’ NRE/FCNR/NRO accounts.
Whether Indian firms/companies are permitted to grant housing loans to their employees deputed abroad and holding Indian passports?
Reserve Bank permits Indian firms/companies to grant housing loans to their
employees deputed abroad and holding Indian passports subject to certain
conditions.
Whether an authorized dealer can grant housing loan to non - residents of Indian nationality where he is a principal borrower with his resident close relative as a co-obligant/guarantor or where the land is owned jointly by such NRI Borrower with his resident close relative?
Yes, An authorized dealer can grant housing loan to non residents of Indian
nationality where he is a principal borrower with his resident close relative as
a co-obligant/guarantor or where the land is owned jointly by such NRI
Borrower with his resident close relative. However, in such cases the payment
of margin money and repayment of the loan installments should be made by
the NRI borrower