Disclaimer

General Guidelines

• Who is a NRI?
  
  As defined by the Foreign Exchange Management Act of 1999 (FEMA), Non Resident Indian (NRI) is a citizen of India, 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 is a non-resident. Non-resident foreign citizens of Indian Origin are treated at par with Non Resident Indian (NRIs).

• Can a NRI/PIO acquire agricultural land/plantation property/farm house in India?
  
  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 Reserve Bank and the proposals are considered in consultation with the Government of India

• What mode of payment can an NRI/PIO make to purchase a residential property in India?
  
  Under the general permission, an NRI/PIO may purchase a residential property in India by funds remitted to India through normal banking channel or funds held in his NRE/FCNR (B)NRO account. No consideration shall be paid outside India.

• Can a NRI/PIO transfer his residential property by way of gift?
  
  Yes. An NRI/PIO can transfer their residential property in India by way of a gift to an Indian resident/NRI/PIO

• Can a PIO transfer his residential property by way of sale?
  
  Yes. Under general permission an NRI can sell his or her residential property in India to an Indian resident only.
• Can a NRI transfer his residential property by way of sale?
  
  Yes. Under general permission an NRI can sell his or her residential property in India to an Indian resident/NRI/PIO
  
  
• Who is a PIO?
  Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
  
  (a) at any time, held Indian passport, or
  
  (b) who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the 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.

• Who is OCI?
  
  (a) Any person of full age and capacity:
  
  • (i) Who is a citizen of another country, but was a citizen of India at the time of, or at any time after, the commencement of the constitution, or (ii) Who is a citizen of another country, but was eligible to become a citizen of India at the time of the commencement of the constitution, or (iii) Who is a citizen of another country, but belongs to a territory that became part of India after the 15th Day of August, 1947. (iv) Who is a child of such a citizen, or
  • (b) A person, who is minor child of a person mentioned in clause (a)

           Provided that no person, who is or had been a citizen of Pakistan, Bangladesh shall be eligible for registration as an

          Overseas Citizen of India.

          Documents required for buying property

• – Pan card (Permanent account number)
• – OCI/PIO card (In case of OCI/PIO)
• – Passport (In case of NRI)
• – Passport size photographs
• – Address proof

• Who can purchase immovable property in India?
  
  Under the general permission granted by RBI, the following categories can freely purchase immovable property in India:
  
  (a) Non-Resident Indian (NRI)- that is a citizen of India residing outside India
  
  (i) 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
  
  (ii) who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
  
  The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land/plantation property/farm house in India. OCI can purchase immovable property in India except agricultural land/plantation property/farmhouse.
• Can an NRI/foreign national acquire immovable residential property in India?
  
  Acquisition by purchase:
  
  Yes, under general permission granted by the RBI an NRI/PIO can purchase a residential property in India
  
  Acquisition by gift:
  
  Yes, under general permission granted by the RBI an NRI/PIO can acquire a residential property by way of gift from a person in India or an NRI or a PIO.
  
  Acquisition by inheritance:
  
  Yes, an NRI/PIO/foreign national of Indian origin can acquire residential property by way of inheritance from a person who is a resident of India as per the Provisions of Section 6(5) of the Foreign Exchange Management Act, 1999. An NRI/PIO/ foreign national of Indian origin can also acquire residential property by way of inheritance from a person who is a resident outside of India, with specific approval of Reserve Bank, provided the bequeathor had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations.
• Do non-resident Indian citizens require permission of Reserve Bank to acquire residential/commercial property in India?
  
  Answer: No
  
  
• Is It true that foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?
  
  Answer: Yes. However, 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 separate permission of Reserve Bank
  
  
• How should the purchase consideration for the residential immovable property be paid by foreign citizens of Indian origin under the general permission?
  
  Answer: 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.
  
  
• While purchasing residential immovable property in India under the general permission, what are the formalities to be completed by a foreign citizen of Indian origin and whether they are allowed to sell it further without the permission of Reserve Bank?
  
  Answer: 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 document evidencing the transaction and bank certificate regarding the consideration paid. 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.
  
  
• Can sale proceeds of such property if and when sold be remitted out of India?
  
  Answer: 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.
  
  
• What are the conditions to be fulfilled if repatriation of sale proceeds is desired? What is the procedure for seeking such repatriation?
  
  Answer: 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. 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.
• Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?
  
  Answer: Yes. 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.
  
  
• Are they allowed to acquire and dispose of commercial properties in India? Can sale proceeds of such property be remitted out of India?
  
  Answer: Yes, They can dispose of such property. 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 installments 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 info.

• Can the properties (residential/commercial) be given on rent if not required for immediate use
  
  Answer: Yes. 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.

• Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance? Are there any authorized housing loan dealers, which can grant loan to NRIs acquisition of a flat/house for residential purposes?
  
  Answer: 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. Authorized housing loan dealers have been granted permission to grant loans up to non-resident Indian nationals for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. 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 investments' NRE/FCNR accounts.

• What are the options available for obtaining guarantors while applying for a HDFC/LIC loan?
  
  Answer: One will need a guarantor for a loan mainly for collateral security. The guarantor will have to demonstrate appropriate net worth to cover for the loan. Usually one can have a guarantor in any city where the loan issuer has a branch. Talk to loan issuers they will work something out for NRIs and foreign banks.

• Is there any way to avoid Power of Attorney demanded by the developers in their favour at the time of purchase?
  
  Answer: One can choose not to grant the Power of Attorney (POA) to the developers. However this will mandate the mailing of all documents to your foreign residence and associated time delays. A good compromise is to grant the POA to the builder only for specific necessary items.

• Can a PIO transfer by way of sale his residential/commercial property to NRI or a PIO?
  
  Answer: No. He would need to seek Reserve Bank prior approval for transfer by way of sale residential/commercial property in India to a NRI or a PIO But he can sell it to a person who is resident of India.

• Is NRI/PIO who has purchased residential/commercial property under general permission required to file any documents with Reserve Bank of India? Are there any restrictions on the number of such property that he can purchase under general permission available?
  
  Answer: NRI/PIO who has purchased residential/commercial property under general permission is not required to file any documents with the Reserve Bank. There is no restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available.
  
  
• Can a foreign national of non-Indian origin resident outside India acquire any immovable property in India by way of purchase? Can they have the property on lease?
  
  Answer: 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 but any foreign National of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or 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.
  
  
• Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of purchase?
  
  Answer: No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.

• Under general permission available to whom can NRI transfer by way of sale his residential/commercial property?
  
  Answer: NRI can transfer by way of sale residential/commercial property in India to a person resident in India or to a NRI or a PIO.

• Can a PIO transfers by way of sale his residential/commercial property to a NRI or a PIO?
  
  Answer: No. He would need to seek Reserve Bank prior approval for transfer by way of sale residential/commercial property in India to a NRI or a PIO.