A pioneer in developing ventures in Andhra Pradesh
A pioneer in developing ventures in Andhra Pradesh
Definition of an NRI
An Indian Citizen who stays abroad for employment/ carrying on business or vacation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. organizations and officials deputed abroad by Central/ State Government and Public Sector Undertakings on temporary assignments are also treated as non-resident) Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens.
For Investment 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,
Additional Details
Acquisition and Transfer of Immovable Property in India by a person resident outside India.
These Frequently Asked Question have been prepared in order to address various issues relating to acquisition and transfer of immovable property in India by a person resident outside India under the provisions of the Foreign Exchange Management Act, 1999. These FAQs seek to cover the broad spectrum of issues relating to acquisition and transfer of immovable property in India by a non-resident Indian (NRI) or a foreign national of Indian origin (PIO) or a foreign national of non-Indian origin as also by a person resident in India who is not a citizen of India
Questions and Answers
Do non-resident Indian citizens require permission of Reserve Bank to acquire residential/commercial property in India?
No
Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?
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 prior permission of Reserve Bank.
In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?
The purchase consideration for the property has to be made only from funds that have been remitted to India through normal banking channels. Alternatively, they can pay the sale consideration from funds held in a non-resident (external) rupee account (NRE) or non-resident (ordinary) account (NRO) or non resident (foreign currency) account (FCNRB).
What are the formalities required to be completed by 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 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.
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.
Can sale proceeds of such property if and when sold 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 original investment 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 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 instalment of consideration amount, whichever is later.
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 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?
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, subject to compliance with applicable tax laws.
Can they dispose of such properties?
Yes
