Q: Do foreign citizens
of Indian origin require permission of Reserve Bank to purchase
immovable property in India for their residential use?
A: Reserve Bank has granted general permission
to foreign citizens of Indian origin, whether resident in India
or abroad, to purchase immovable property other than agricultural
land/farm house/plantation property, in India. They are, therefore,
not required to obtain separate permission of Reserve Bank or
file any declaration.
Q: In what manner the
purchase consideration for the immovable property should be paid
by foreign citizens of Indian origin under the general permission?
A: The purchase consideration should be met
either out of inward remittances in foreign exchange through normal
banking channels or out of funds from any non resident accounts
maintained with banks in India.
Q: Can such property
be sold without the permission of Reserve Bank?
A: 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 non-resident accounts maintained with banks
in India.
Q: Can sale proceeds
of such property if and when sold be remitted out of India?
A: In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a person resident outside India, who is a citizen of India, or a person of Indian origin, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied:-
the immovable property was acquired by the seller in accordance
with the provisions of the Exchange Control Rules/Regulations/Law
in force at the time of acquisition, or the provisions of the
Regulations framed under the Foreign Exchange Management Act,
1999;
the sale takes place after three years from the date of acquisition
of such immovable property of from the date of payment of final
installment of consideration for its acquisition, whichever is
later;
the amount to be repatriated does not exceed(a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency non-resident account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property; and in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
In all other cases prior permission 9 RBI is required
Q: Can foreign citizens
of Indian origin acquire or dispose of residential property by way
of gift?
A: Yes. Reserve Bank has granted general permission
to foreign citizens of Indian origin to acquire or dispose of
immorelde properties other than agricultural land/farmhouse/plantation
property 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.
Q: Can foreign citizens
of Indian origin acquire or dispose of residential property by way
of gift?
A: Yes. Reserve Bank has granted general permission
to foreign citizens of Indian origin to acquire or dispose of
immorelde properties other than agricultural land/farmhouse/plantation
property 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.
Q: Can NRI's/PIO's rent
out the properties (residential/commercial) if not required for
immediate use?
A: Yes. 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 is eligible for repatriation
Q: Can NRIs obtain loans
for acquisition of a house/flat for residential purpose from financial
institutions providing housing finance?
A: 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 a house/flat
for self occupation subject to certain conditions. The purpose
of loan margin money and the quantum of loan will be at par with
those applicable to housing loans to residents. Repayment of loan
should be made within a period not exceeding 15 years out of inward
remittances or out of funds held in the investor's NRE / FCNR
/ NRO Accounts.