Under the general permission available, the following categories can freely purchase immovable property in India:
i) Non-Resident Indian (NRI) — that is a citizen of India resident outside India.
ii) Person of Indian Origin (PIO) — that is an individual, who at any time, held Indian passport, or who or his/her father or grandfather was a citizen of India by asset of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). The general permission cover-up only purchase of residential and commercial property and not for purchase of agricultural land/plantation property/farm house in India.
A foreign company which has established a branch office or other place of business in India can acquire any immovable property in India, which is mandatory for or accompanying to carrying on such activity. Payment for obtaining such property should be made by way of foreign inward remittance through proper banking channel. On winding up of the business, the sale proceeds of such property can be repatriated only with prior permission of Reserve Bank. Though, if the foreign company has established a liaison office, it cannot get hold of immovable property. In those cases, association offices can take property by way of lease not above five years.
Certainly, a person resident outside India i.e,
i) An NRI
ii) A PIO
iii) A foreign national of non-Indian ancestor can accomplish and embrace immovable property in India from a person who was resident in India. However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek particular approval of the Reserve Bank of India.
A person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) can inherit immovable property from
(a) Person resident in India.
(b) Person resident outside India
However, the person from whom the property is bequeathed should have acquired the same in accordance with the foreign exchange regulations applicable at that time.
a) NRI can sell property in India to:
1. A person resident in India or
2. An NRI
3. A PIO
(b) PIO can sell property in India to
1. A person residing in India.
2. An NRI or
3. A PIO — with the prior approval of the Reserve Bank of India
c) 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 can sell property in India with prior approval of the Reserve Bank of India to: i.a person resident in India ii.An NRI iii.A PIO
i) NRI/PIO can mortgage to:
(a)An authorized dealer/housing finance institution in India without the permission of the Reserve Bank of India
(b) A party abroad with prior approval of the Reserve Bank of India
ii) A foreign national of non-Indian origin can mortgage only with prior approval of the Reserve Bank of India
iii) A foreign company which has established a branch office or other place of business in accordance with FERA/FEMA rules has general permission to mortgage property with an well-known dealer in India.
Payment can be made out of:
(a) funds remitted to India through normal banking channels
(b) funds held in NRE/FCNR (B)/NRO account maintained in India.
No payment can be made either by traveler’s cheque or by foreign currency notes. No payment can be made outside India.
Yes. However, banks cannot grant fresh loans or renew existing loans in excess of Rs 20 lakh against NRE and FCNR (B) deposits either to the depositors or to third parties.
Such loans can be repaid
(a) by way of inward remittance through normal banking channel or
(b) by debit to NRE/FCNR (B)/NRO accounts
(c) out of rental income from such property.
(d) By the borrower’s close relatives.
In case the amount has been received from inward remittance or debit to NRE/FCNR (B)/NRO account for acquiring the property or for repayment of the loan, the principal amount can be transfer outside India.
Lets suppose that the property is acquired out of rupee resources and/or the loan is repaid by close relatives in India, the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also credited to the NRO account. NRI/PIO are also allowable by the authorized dealers to repatriate an amount up to $1 million per financial year out of the balance in the NRO account for all legitimate purposes to the execution of the authorized dealers which subject to tax compliances.
Yes, NRI/PIO can avail of housing loan in rupees from an Authorized Dealer or housing finance institution subject to proper rules and regulations.
Such a loan can be repaid
a) by way of inward remittance through normal banking channel or
b) by debit to his NRE/FCNR (B)/NRO account or
c) out of rental income from such property
d) By the borrower’s close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower’s loan account.
NRI/PIO may repatriate the sale proceeds of immovable property
a) If the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels/by debit to NRE/FCNR (B) account. The amount which is to be repatriated should not surpass the amount paid for the property:
1. in foreign exchange received through normal banking channel
2. By debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.
Repatriation of sale proceeds of residential property purchased by NRI/PIO out of foreign exchange is restricted to not more than two such properties. Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to $1 million, per financial year, as discussed beneath.
b) If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to $1 million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
Yes, provided the loan has been subsequently reimbursed by remitting funds from abroad or by debit to NRE/FCNR (B) accounts. If the property was purchased from foreign inward remittance or from NRE/FCNR (B) account, can the sale proceeds of property be repatriated immediately?
The sale proceeds of resolute property attained by gift should be credited only to NRO account. From the balance in the NRO account, NRI/PIO may transfer up to $1 million, per financial year, subject to the satisfaction of Authorized Dealer and payment of appropriate taxes.
Surely, common approval is available to NRIs/PIO to repatriate the sale proceeds of the immovable property inherited from a person resident in India. NRIs/PIO may repatriate an amount not exceeding $1 million, per financial year, on production of documentary proof in support of acquisition/inheritance of assets, an undertaking by the remitter and certificate by a Chartered Accountant.
In foreign national case, sale proceeds can also be repatriated even if the property is connate from a person dweller outside India. But this is permutable only with prior permission of Reserve Bank of India (RBI). The foreign national has to approach the RBI with documentary evidence in lieu of inheritance of the immovable property and the undertaking and the C.A. Certificate as cited above.
The general approval for repatriation of sale proceeds of immovable property is not available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan and Iran and an individual has to look for particular authorization of RBI.
Definitely, foreign embassies/ diplomats/consulate generals can buy and sell any immovable property outside of agricultural land/plantation property/farm house in India with prior consent from Government of India, Ministry of External Affairs. The payment should be made by foreign inward remittance through normal banking channels.
Certainly, NRI/PIO can rent out the property without the approval of the RBI. Rent taken can be credited to NRO/NRE account or remitted abroad. Powers have been empower to the Authorized Dealers to allow reestablishment of present revenue such as rent, dividend, retirement fund, interest, etc. of NRIs/PIO who do not preserve an NRO account in India establish a suitable access by a chartered accountant, declare truly that the amount planned to be send is worthy for remittance and applicable taxes have been paid or provided for.
An individual resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan is administered by victuals of the Foreign Exchange Management Regulations, 2000. The concerned resident would require prior authorization of the RBI for receiving and transfer of fixed property in India although the person‘s resident is India. These petitions are examined by RBI in discussion with Government in India.