| REAL
ESTATE
GUIDELINES
FOR NRI’s |
1) Who
is a foreign
citizen
of Indian
Origin? |
A
foreign
citizen
is deemed
to be
of Indian
Origin
if :
i) he
held
an Indian
Passport
at any
time
or ii)
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.
However
this
does
not
apply
to citizens
of Pakistan,
Bangladesh,
Afghanistan,
Bhutan,
Sri
Lanka
or Nepal) |
2) To
acquire
any residential/commercial
property
in India
do a non-resident
Indian
citizens
require
permission
of The
Reserve
Bank? |
| Not
necessary.
All Indian
citizens
are entitled
to buy
Residential/Commercial
type of
property
in India,
irrespective
of their
residential
status. |
3) Do
foreign
citizens
of Indian
origin
require
permission
of the
Reserve
Bank to
purchase
immovable
property
in India
for their
residential
use? |
Yes.
However,
the
RBI
has
granted
general
permission
to foreign
citizens
of Indian
origin,
whether
resident
in India
or abroad,
to purchase
immovable
property
in India
for
their
bonafide
residential
purpose.
They
are,
therefore,
not
required
to obtain
separate
permission
from
the
Reserve
Bank. |
4) How
should
the purchase
of residential
immovable
property
be paid
for by
foreign
citizens
of India
origin
under
the general
permission? |
| The
purchase
consideration
should
be met
either
out of
inward
remittance
in foreign
exchange
through
normal
banking
channels,
or out
of funds
from NRE/FCNR
accounts
maintained
with banks
in India. |
5)
What formalities
have to
be completed
by foreign
citizens
of Indian
origin
to purchase
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 immovable
property
or final
payment
of purchase
consideration
along
with a
certified
copy of
the documentary
evidence
for the
transaction
and bank
certificate
for the
money
paid. |
6)
Can such
property
be sold
without
the permission
of Reserve
Bank? |
| Yes.
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. |
7)
Can sale
proceeds
of such
property
(if and
when sold)
be remitted
out of
India? |
| For
residential
properties
purchased
on or
after
26 May
1993,
the Reserve
Bank considers
applications
for repatriation
of sale
proceeds.
Approval
is usually
granted
for up
to the
consideration
amount
remitted
in foreign
exchange
in acquiring
the property
for a
maximum
of two
such properties.
The balance
amount
of sale
proceeds,
if any,
or sale
proceeds
for properties
purchased
prior
to 26
May 1993,
will have
to be
credited
to the
ordinary
non- resident
rupee
account of the
owner
of the
property. |
8) Are
any conditions
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
installment
of the
consideration
amount,
whichever
is later. |
9) What
is the
procedure
for seeking
such repatriation? |
| Applications
for necessary
permission
for remittance
of sale
proceeds
should
be made
in form
IPI 8
to the
Central
Office
of The
Reserve
Bank at
Mumbai
within
90 days
of the
sale of
the property. |
10) Can
foreign
citizens
of Indian
origin
acquire
or dispose
residential
property
by way
of gift? |
| 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. |
11) Can
immoveable
property
held in
India
be transferred
by way
of gift
to in
India? |
| General
permission
has been
granted
by Reserve
Bank to
non-resident
persons
(foreign
citizen)
of Indian
Origin
to transfer,
by way
of gift,
immoveable
property
held by
them in
India
to relatives
and charitable
trusts
/ organisations
subject
to the
condition
that the
provisions
of all
other
laws,
as applicable
are complied
with. |
12) Can
foreign
citizens
of Indian
origin
acquire
commercial
properties
in India? |
| 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
purchaser's
NRE/FCNR
accounts
maintained
with banks
in India.
A declaration
has to
be 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. |
13) Can
they dispose
of such
properties? |
| Yes. |
14) Can
sale proceeds
of such
property
be remitted
out of
India? |
| Yes.
Repatriation
of original
investment
in respect
of properties
purchased
by foreign
citizens
of Indian
origin
on or
after
26 May
1993 can
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,
which
ever 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. |
15) Can
the properties
(residential/commercial)
be given
on rent
if not
required
for immediate
use? |
| The
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. |
16) Can
NRI’s
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
and authorised
dealers
to grant
housing
loans
to non-resident
Indian
nationals
for acquisition
of a house/flat
for self-occupation,
subject
to certain
conditions.
Criteria
regarding
the purpose
of the
loan,
margin
money
and the
quantum
of loan
will be
at par
with those
applicable
to resident
Indians.
Repayment
of the
loan should
be made
within
a period
not exceeding 15 years,
out of
inward
remittance
through
banking
channels
or out
of funds
held in
the investors'
NRE/FCNR/NRO
accounts. |
17) Can
Indian
companies
grant
loans
to their
NRI staff? |
| The
Reserve
Bank permits
Indian
firms
to grant
housing
loans
to their
employees
deputed
abroad
and holding
Indian
passport
subject
to certain
conditions. |
18) Can
an authorised
dealer
grant
a housing
loan to
non-residents
of Indian
nationality
where
the NRI
is the
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.
However
in such
cases
the payment
of margin
money
and repayment
of loan
installments
should
be made
by the
NRI borrower. |
| |
Disclaimer:
The purpose
of this
FAQ is
to provide
the visitors
a general
understanding
on the
various
issues
relating
to House
Property.
The above
FAQ been
prepared
on the
basis
of advice
received
and may
vary from
person
to person,
based
on facts
of such
case.
Reasonable
efforts
have been
taken
in collecting,
preparing
and providing
quality
information,
but we
do not
warrant
or guarantee
the accuracy,
completeness,
adequacy
or currency
of the
information.
The contents
of the FAQ are
subject
to changes
/ amendments
made by
the CBDT
/ Finance
Ministry. |
