Buyer Guide Finance and Loans

Buyer Guide

Finance & Loans

Finance and Loans Graph

Can such property be sold without the permission of Reserve Bank?

Yes. The Reserve Bank has granted general permission for the sale of such property. However, when such a 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.

Are there any conditions which are required to be fulfilled if repatriation of sales 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.

Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift

Yes. The Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of up to two properties 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 the due gift tax has been paid.

Can foreign citizens of Indian origin acquire commercial properties in India?

Yes. Under the general permission granted by the Reserve Bank of India, properties other than agricultural lands/farm houses/plantation properties 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.

Can the properties (residential/commercial) be given on rent, if not required for?

Yes. The 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 have to be credited to an NRO account in the name of the owner.

Where can one find regulations/directions issued by Reserve Bank for acquisition and transfer of immovable property in India, by a person resident outside India?

Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India has been notified vide RBI Notification No. FEMA 21/2000-RB, dated May 3, 2000, as amended vide Notification No. FEMA 64/2002-RB, dated June 29, 2002, and Notification No. FEMA 65/2002-RB, dated June 29, 2002, and relevant directions issued in the form of A.P. (DIR Series) Circulars. All concerned details are available on the RBI website.

Is there any restriction on the number of residential/commercial property that an NRI/PIO can purchase under the general permissions available?

There is no restriction on the number of residential/commercial property that an NRI/PIO can purchase under the general permissions available.

Can a foreign national of non-Indian origin acquire residential property on a lease in India?

Yes. A foreign national of non-Indian origin, including a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan, may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission from the Reserve Bank of India.

Can a foreign national of non-Indian origin, resident outside India, acquire residential/commercial in India by way of gift?

No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999, "Transfer" includes, among others, "gift." Therefore, a foreign national of non-Indian origin, resident outside India, cannot acquire residential/commercial property in India by way of gift.

Can a PIO transfer, by way of sale, his residential/commercial property to an NRI or a PIO?

No. He would need to seek the Reserve Bank's prior approval for transfer, by way of sale, residential/commercial property in India to an NRI or a PIO.

Can Non-Resident Indians purchase property in India through an agent or through the Power of Attorney?

The Non-Resident Indians who are staying abroad may give authority to their relatives/ agents by executing Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or developer, drafting and signing of agreements, taking possession, etc.). Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be prepared on a stamp paper bought in India.

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