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| NRI Section |
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Non-Resident Indians (NRIs) to consider
investing in the country. And the boom times aren't
limited to just the metros. The concept of ultra-modern
private integrated townships and world class
infrastructure has taken wing in a big way in
practically all cities and satellite townships in the
country, thereby making investments in property in India
most lucrative. |
Q1: Do non-resident
Indian nationals require permission of the Reserve Bank
of India to acquire residential/commercial property in
India?
Ans: No permission is required by non-resident Indian
nationals to acquire immovable property in India.
Q2: Are foreign nationals of Indian
origin allowed to purchase immovable property in India?
Ans: Yes, foreign nationals of Indian origin, whether
resident in India or abroad, have been granted general
permission to purchase immovable property in India..
Q3: What should be the method of
payment for purchasing residential immovable property in
India by foreign nationals of Indian origin under the
general permission?
Ans: The purchase consideration should be met either out
of inward remittances in foreign exchange through normal
banking channels or out of funds from NRE/FCNR accounts
maintained with banks in India.
Q4: Are there any formalities to be
completed by foreign nationals of Indian origin for
purchasing residential immovable property in India?
Ans: They are required to file a declaration in Form IPI
7 with the Central Office of the Reserve Bank of India
at Mumbai within a period of 90 days from the date of
purchase of immovable property or final payment of
purchase consideration alongwith a certified copy of the
document evidencing the transaction and bank certificate
regarding the consideration paid.
Q5: Can such property be sold without
the permission of the Reserve Bank of India?
Ans: Yes. The Reserve Bank of India 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.
Q6: Can the rental income from such
property be remitted outside India?
Ans: No. Such income cannot be remitted abroad and will
have to be credited to the ordinary non-resident rupee
account of the owner of the property. Restricted
remittances are, however, now permitted.
Q7: Can such property be sold without
the permission of the Reserve Bank of India?
Ans: Yes. However, such property can be sold to other
foreign nationals of Indian origin provided funds
towards the purchase consideration are either remitted
to India or paid out of balances in NRE/FCNR account.
Q8: Can sale proceeds of such property
if and when sold be remitted out of India?
Ans: In respect of residential properties purchased on
or after May 26, 1993, the Reserve bank of India
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 May 26, 1993, will have to be credited to the
ordinary non-resident rupee account of the owner of the
property. The Reserve Bank of India also considers
repatriation of sale proceeds up to the consideration
amount remitted in foreign exchange for acquisition of
commercial properties.
Q9: What are the conditions required to
be fulfilled for repatriation of sale proceeds?
Ans: 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 of consideration amount,
whichever is later.
Q10: What is the procedure for seeking
such repatriation?
Ans: Application for necessary permission for remittance
of sale proceeds should be made in Form IPI 8 to the
Central Office of the Reserve Bank of India at Mumbai
within 90 days of the sale of the property.
Q11: Can foreign citizens of Indian
origin acquire or dispose of residential property by way
of gifting it?
Ans: Yes. The Reserve Bank of India 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.
Q12: Can foreign citizens of Indian
origin acquire commercial properties in India?
Ans: Yes. Under the general permission granted by the
Reserve Bank of 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 and a declaration is
submitted to the Central Office of the Reserve Bank of
India in Form IPI 7 within a period of 90 days from the
date of purchase of the property/final payment of
purchase consideration.
Q13: Can they dispose of such
properties?
Ans: Yes.
Q14: Can sale proceeds of such property
be remitted out of India?
Ans: Yes. Repatriation of original investment in respect
of properties purchased by foreign citizens of Indian
origin on or after May 26, 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 of
consideration amount, whichever is later. Applications
for the purpose are required to be made to the Central
Office of the Reserve Bank of India within 90 days of
the sale of property in Form IPI 8.
Q15: Can the properties
(residential/commercial) be given on rent if not
required for immediate use?
Ans: Yes. The Reserve Bank of India has granted general
permission for letting out any immovable property in
India. The rental income or proceeds of any investment
of such income has to be credited to NRO account.
Q16: Can NRIs obtain loans for
acquisition of a house/flat for residential purpose from
financial institutions providing housing finance?
Ans: The Reserve Bank of India has granted general
permission to certain financial institutions providing
housing finance. HDFC, LIC Housing Finance Ltd., etc.,
to grant housing loans to non-resident Indian nationals
for acquisition of a house/flat for self-occupation
subject to certain conditions.
Q17: Can an dealer grant loans to NRIs
for acquisition of a flat/house for residential
purposes?
Ans: Dealers have been granted permission to grant loans
to non resident Indian nationals for acquisition of
house/flat for self-occupation on their return to India
subject to conditions. Repayment of the loan should be
made within a period not exceeding 15 years out of
inward remittance though banking channels or out of
funds held in the investors’ NRE/FCNR/NRO account.
Q18: Can Indian companies grant loans
to their NRI staff?
Ans: The Reserve Bank of India permits Indian
firms/companies to grant housing loans to their
employees deputed abroad and holding Indian passport
subject to certain conditions.
Q19: Can an dealer grant housing loan
to non-residents of Indian nationality where he is a
principal borrower with his resident close relative as a
co-obligate/guarantor, or where the land is owned
jointly by such NRI borrower with his resident close
relative?
Ans: Yes. However, in such cases the payment of margin
money and repayment of the loan installments should be
made by the NRI. |
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