NRI Investment in Immovable Property

  1. Do non-resident Indian citizens require permission of Reserve Bank to acquire residential/commercial properly in India?
  2. Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?
  3. In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?
  4. 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
  5. Can such property be sold without the permission of Reserve Bank
  6. Can sale proceeds of such property if and when sold be remitted out of India?
  7. Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?
  8. What is the procedure for seeking such repatriation?
  9. Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?
  10. Can foreign citizens of Indian origin acquire commercial properties in India?
  11. Can they dispose of such properties?
  12. Can sale proceeds of such property be remitted out of India?
  13. Can the properties (residential/commercial) be given on rent if not required for immediate use?
  14. Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?
  15. Can authorized dealer grant loans to NRIs for acquisition of a flat/house for residential purposes?
  16. Can Indian companies grant loans to their NRI staff?

 

Ans.I

No.

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Ans.II

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.

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Ans.III

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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Ans.IV

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 alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

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Ans.V

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.

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Ans.VI

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.

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Ans.VII

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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Ans.VIII

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.

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Ans.IX

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.

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Ans.X

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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Ans.XI

Yes.

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Ans.XII

Yes. 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 instalment 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 in form IPI 8.

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Ans.XIII

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.

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Ans.XIV

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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Ans.XV

Authorized 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.

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Ans.XVI

Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.

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