FAQ FOR NRI'S

1. WHO CAN PURCHASE IMMOVABLE PROPERTY IN INDIA?

The Reserve Bank of India ("RBI") has granted general permission to the following persons to purchase immovable property in India:
Non-Resident Indian (NRI)- that is a citizen of India resident outside India;
Person of Indian Origin (PIO)- that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who: at any time, held Indian passport, or who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
The general permission, has however, been granted only purchase of residential & commercial property and not for purchase of agricultural land/plantation property/farm house in India.

2. WHETHER NRI/PIO CAN ACQUIRE AGRICULTURAL LAND/PLANTATION PROPERTY/FARM HOUSE IN INDIA?

No. Since general permission is not available to NRI/PIO to acquire agricultural land/plantation property/farm house in India, such proposals will require specific approval of RBI and the proposals are considered in consultation with the Government of India.

3. WHETHER NRI/PIO ARE REQUIRED TO MAKE ANY FILINGS WITH RBI AFTER PURCHASE OF PROPERTY?

No. An NRI/PIO who has purchased residential/commercial property under general permission, is not required to file any documents with the RBI.

4. HOW MANY RESIDENTIAL/COMMERCIAL PROPERTIES CAN NRI/PIO PURCHASE UNDER THE GENERAL PERMISSION?

There are no restrictions on the number of residential/commercial properties that can be purchased.

5. HOW CAN AN NRI/PIO MAKE PAYMENT FOR PURCHASE OF RESIDENTIAL/COMMERCIAL PROPERTY IN INDIA ?

The payment can be made by NRI/PIO out of: Funds remitted to India through normal banking channel; or funds held in NRE/FCNR (B)/NRO account maintained in India
No payment can be made either by traveller's cheque or by foreign currency notes. Further, no payment can be made outside India.

6. WHAT SHALL BE THE OPTION IF THERE IS REFUND OF APPLICATION MONEY/PAYMENT MADE BY THE BUILDING AGENCIES/SELLER BECAUSE OF NON-ALLOTMENT OF FLAT/PLOT/CANCELLATION OF BOOKINGS/CONTRACTS ?

The amount of refund, together with interest (net of income tax) can be credited to NRE account. This is subject to condition that the original payment was made by way of inward remittance or by debit to NRE/FCNR (B) account.

7. CAN NRI/PIO AVAIL OF LOAN FROM AN AUTHORISED DEALER FOR ACQUIRING FLAT/HOUSE IN INDIA FOR HIS OWN RESIDENTIAL USE AGAINST THE SECURITY OF FUNDS HELD IN HIS NRE FIXED DEPOSIT ACCOUNT/FCNR (B) ACCOUNT?

Yes, such loans are subject to the terms and conditions as laid down in Schedules 1 and 2 to Notification No. FEMA 5/2000-RB dated May 3, 2000 as amended from time to time. However, banks cannot grant fresh loans or renew existing loans in excess of Rs. 20 lakh against NRE and FCNR(B) deposits either to the depositors or to third parties.
Repayment of loans
Such loans can be repaid:
By way of inward remittance through normal banking channel or
By debit to his NRE/FCNR (B)/NRO account;
or out of rental income from such property.
By the borrower's close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower's loan account.
Repatriation:
In case the amount has been received from inward remittance or debit to NRE/FCNR(B)/NRO account for acquiring the property or for repayment of the loan, the principal amount can be repatriated outside India.
For this purpose, repatriation outside India means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency; in case the property is acquired out of rupee resources and/or the loan is repaid by close relatives in India (as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account. NRI/PIO are also allowed by the Authorised Dealers to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account for all bonafide purposes to the satisfaction of the authorised dealers, subject to tax compliance

8. CAN NRI/PIO AVAIL OF HOUSING LOAN IN RUPEES FROM AN AUTHORISED DEALER OR HOUSING FINANCE INSTITUTION IN INDIA APPROVED BY THE NATIONAL HOUSING BANK FOR PURCHASE OF RESIDENTIAL ACCOMMODATION OR FOR THE PURPOSE OF REPAIRS/RENOVATION/IMPROVEMENT OF RESIDENTIAL ACCOMMODATION? HOW CAN SUCH LOAN BE REPAID?

Yes, NRI/PIO can avail of housing loan in rupees from an Authorised Dealer or housing finance institution subject to certain terms and conditions.
Such a loan can be repaid:
By way of inward remittance through normal banking channel; or
By debit to his NRE/FCNR (B)/NRO account; or
Out of rental income from such property.
By the borrower's close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower's loan account.

9. CAN A FOREIGN NATIONAL OF NON-INDIAN ORIGIN RESIDENT OUTSIDE INDIA PURCHASE IMMOVABLE PROPERTY IN INDIA?

No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he/she may take residential accommodation on lease provided the period of lease does not exceed five years. In such cases, there is no requirement of taking any permission of or reporting to RBI.

10. CAN AN OFFICE OF A FOREIGN COMPANY PURCHASE IMMOVABLE PROPERTY IN INDIA?

A foreign company which has established a branch office or other place of business in India, in accordance with FERA/FEMA regulations, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through proper banking channel. A declaration in form IPI should be filed with RBI within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for other borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of RBI. Further, acquisition of immovable property by entities incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan who have established branch offices in India would require prior approval of RBI to acquire such immovable property. A foreign company having a Liaison Office in India, can not acquire immovable property. A liaison office is permitted to take on lease the property for a period not exceeding 5 years.

11. WHETHER IMMOVABLE PROPERTY IN INDIA CAN BE ACQUIRED BY WAY OF GIFT?

Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from:
A person resident in India or
An NRI or
A PIO.
However, the property can only be commercial or residential. Agricultural land/plantation property/farm house in India cannot be acquired by way of gift.

12. CAN AN NRI/PIO SELL HIS RESIDENTIAL/COMMERCIAL PROPERTY?

NRI can sell property in India to
A person resident in India or
An NRI or
A PIO.
PIO can sell property in India to:
A person resident in India.
An NRI or
APIO - with the prior approval of RBI.

13. CAN A NON-RESIDENT GIFT HIS RESIDENTIAL/COMMERCIAL PROPERTY?

Yes, NRI/PIO may gift residential/commercial property to 
A person resident in India or
An NRI or
A PIO.

14. CAN RESIDENTIAL/COMMERCIAL PROPERTY BE MORTGAGED?

NRI/PIO can mortgage their residential/commercial property to:
An institution in India -without the approval of RBI
A party abroad - with prior approval of RBI.

15. IF A RUPEE LOAN WAS TAKEN BY NRI/PIO FROM AUTHORISED DEALER OR HOUSING FINANCE INSTITUTION FOR PURCHASE OF RESIDENTIAL PROPERTY CAN AN NRI/PIO REPATRIATE THE SALE PROCEEDS OF SUCH PROPERTY?

Yes, provided the loan has been subsequently repaid by remitting funds from abroad or by debit to NRE/FCNR(B) accounts.

16. IF THE PROPERTY WAS PURCHASED FROM FOREIGN INWARD REMITTANCE OR FROM NRE/FCNR (B) ACCOUNT, CAN THE SALE PROCEEDS OF PROPERTY BE REPATRIATED IMMEDIATELY?

Yes

17. IS THERE ANY RESTRICTION ON NUMBER OF RESIDENTIAL PROPERTIES IN RESPECT OF WHICH SALE PROCEEDS CAN BE REPATRIATED BY NRI/PIO?

Yes, sale proceeds of not more than two residential properties can be repatriated.

18. IF THE IMMOVABLE PROPERTY WAS ACQUIRED BY WAY OF GIFT BY THE NRI/PIO, CAN HE REPATRIATE ABROAD THE FUNDS FROM SALE?

The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes.

19. CAN NRI/PIO RENT OUT THE RESIDENTIAL/COMMERCIAL PROPERTY PURCHASED OUT OF FOREIGN EXCHANGE/RUPEE FUNDS?

Yes, NRI/PIO can rent out the property without the approval of the RBI. Rent received can be credited to NRO/NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.

Disclaimer: The Company holds no responsibility for change in the aforesaid information due RBI notification or direction or government action.