| Frequently
Ask Questions |
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1.
Is it mandatory for non-resident Indian citizens
to obtain permission from the Reserve Bank to
acquire residential/commercial properly in India?
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No |
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2.
Do foreign citizens of Indian origin require the
permission of Reserve Bank to purchase immovable
property in India for their residential use? |
Reserve
Bank of India 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 separate
permission from the Reserve Bank. |
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3.
In what manner should the purchase consideration
for the residential immovable property be paid
by foreign citizens of Indian origin, under the
general permission? |
The
purchase consideration should be met either out
of inward remittances in foreign exchange, through
normal banking channels, or out of funds from
NTE/FCNR accounts maintained with banks in India. |
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4.
What are the formalities required to be completed
by the foreign citizens of Indian origin for purchasing
residential immovable property in India, under
the general permission? |
They 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 the 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. |
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5.
Can such property be sold without the permission
of Reserve Bank? |
Yes.
The Reserve Bank has granted general permission
for the 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. |
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6.
Are there any conditions which required to be
fulfilled if repatriation of sale proceeds is
desired? |
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 instalment of consideration
amount, whichever is later. |
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7.
Can foreign citizens of Indian origin acquire
or dispose of residential property by way of gift?
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Yes.
The Reserve Bank has granted general permission
to foreign citizens of Indian origin to acquire
or dispose of 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, provided gift tax has
been paid |
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8.
Can foreign citizens of Indian origin acquire
commercial properties in India? |
Yes.
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. |
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9.
Can
the properties (residential/commercial) be given
on rent, if not required for? |
Yes.
The Reserve Bank has granted general permission
for letting out of any immovable property in India.
The rental income or proceeds of any investment
of such income has to be credited to NRO account.
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10.
Can NRIs obtain loans for acquisition of a house/flat
for residential purpose from financial institutions
providing housing finance? |
The
Reserve Bank has granted general permission to
certain financial institutions providing housing
finance, e.g. HDFC, LIC Housing Finance Ltd.,
etc., to grant housing loans to non-resident Indian
nationals for acquisition of houses/flats for
self-occupation, subject to certain conditions.
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Regulations/Directions issued by Reserve
Bank of India |
11.
Where can one find regulations/directions issued
by Reserve Bank for acquisition and transfer of
immovable property in India, by a person resident
outside India? |
Regulations
regarding acquisition and transfer of immovable
property in India by a person resident outside
India has been notified vide RBI Notification
No. FEMA 21/2000-RB, dated May 3, 2000, as amended
vide Notification No. FEMA 64/2002-RB, dated June
29, 2002 and Notification No. FEMA 65/2002-RB,
dated June 29, 2002 and relevant directions issued
in the form of A.P. (DIR Series) Circulars. These
are available on the RBI website: |
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12.
Is
the NRI/PIO, who has purchased residential/commercial
property under general permission, required to
file any documents with the Reserve Bank of India? |
The
NRI/PIO who has purchased residential/commercial
property under general permission is not required
to file any documents with the Reserve Bank. |
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13.
Is there any restriction on the number of residential/commercial
property that an NRI/PIO can purchase under the
general permission available? |
There is no restriction on the number of residential/commercial
property that an NRI/PIO can purchase under the
general permission available. |
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14.
Can a foreign national of non-Indian origin, resident
outside India, acquire any immovable property
in India by way of purchase? |
No.
Under section 2 (ze) of the Foreign Exchange Management
Act, 1999 "transfer" includes, among
others, "purchase." Therefore, a foreign
national of non-Indian origin, resident outside
India, cannot acquire any immovable property in
India by way of purchase. |
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15.
Can
a foreign national of non-Indian origin acquire
residential property on a lease in India? |
Yes.
A foreign national of non-Indian origin, including
a citizen of Pakistan, Bangladesh, Sri Lanka,
Afghanistan, China, Iran, Nepal or Bhutan, may
acquire only residential accommodation on lease,
not exceeding five years for which he/she does
not require prior permission of Reserve Bank of
India. |
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Acquisition
of immovable property in India by way of gift
by a person resident outside India |
16.
Can an NRI/PIO acquire residential/commercial
property by way of gift, under the general permission
available? |
Yes.
Under general permission available, an NRI/PIO
may acquire residential/commercial property by
way of gift from a person resident in India or
an NRI or a PIO. |
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17.
Can a foreign national of non-Indian origin, resident
outside India, acquire residential/commercial
in India by way of gift? |
No.
Under section 2 (ze) of the Foreign Exchange Management
Act, 1999, "transfer" includes, among
others, "gift." Therefore, a foreign
national of non-Indian origin, resident outside
India, cannot acquire residential/commercial property
in India by way of gift. |
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Transfer
of immovable property in India, by way of sale
by a person resident outside India |
18.
Under general permission available, to whom can
an NRI transfer, by way of sale, his residential/commercial
property? |
An
NRI can transfer, by way of sale, residential/commercial
property in India to a person resident in India
or to an NRI or a PIO. |
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19.
Under general permission available, to whom can
a PIO transfer his residential/commercial property
by way of sale? |
PIO
can transfer, by way of sale, residential/commercial
property in India only to a person resident in
India. |
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20.
Can a PIO transfer, by way of sale, his residential/commercial
property to an NRI or a PIO? |
No.
He would need to seek Reserve Bank's prior approval
for transfer, by way of sale, residential/commercial
property in India to an NRI or a PIO. |
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