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What are the rules governing the acquisition of
immovable property?
(A) Rules for Indian citizens residing outside
India for acquiring immovable property by way of:
I - Acquisition:
a. Purchase - General permission is granted for purchasing any
immovable property in India (other than agricultural land, plantation or farm
house property).
b. Gift - General permission is granted to acquire any
immovable property (other than agricultural land, plantation or farmhouse
property) as a gift.
c.Inheritance -General permission is granted for inheriting
immovable property including agricultural land, plantation or farm house
property from a person resident in India, or an Indian citizen resident outside
India or a foreign citizen of Indian origin. The inheriting person should have
acquired the said property in accordance with the provisions of Foreign Exchange
Law in force at the time of acquisition. Agricultural land, plantation or
farmhouse property can be acquired by way of inheritance only.
II - Transfer / sell:
General permission is available for transfer of any immovable property (other
than agriculture land, plantation property and farm house) to:
i. Person resident in India;
ii. Person resident outside India, who is an Indian citizen; or
iii. Person resident outside India, who is a foreign citizen of Indian origin.
However, a person can sell, gift or transfer agricultural land, plantation or
farm house properties to a citizen of India who is resident in India only.
(B) Rules for a foreign citizen of Indian origin for acquiring immovable
property by way of:
I - Acquisition:
a.Purchase There is a general permission to acquire any
immovable property (other than agricultural land, plantation or farm-house
property) by way of purchase, provided the payment is made out of foreign
exchange inward remittance or by debit to any Non Resident bank account in
India, i.e. NR(E), FCNR(B) or NRO.
b.Gift - General permission is granted to acquire any immovable
property (other than agricultural land, plantation or farmhouse property) by way
of gift from a person (donor) who is (i) resident in India, or (ii) resident
outside India (an NRI ) Indian citizen or a foreign citizen of Indian origin.
c.Inheritance General permission is granted for inheritance of
immovable property including agricultural land, plantation or farm house
property from a person resident in India, or a person resident outside India who
may be an Indian citizen or foreign citizen of Indian origin. The inheriting
person should have acquired the said property in accordance with the provisions
of Foreign Exchange Law in force at the time of acquisition. Agricultural land,
plantation or farm-house property can be acquired by way of inheritance only.
II - Transfer / sell:
General permission is available for transfer of any immovable property (other
than agricultural land, plantation property or farm house) to a person resident
in India only. However, a person of Indian origin is permitted to make a gift of
such property to a person resident in India or to an Indian citizen, residing
outside India, or to a person of Indian origin resident outside India.
Agricultural land, farm house, and plantation property can be transferred as a
gift or sold only to an Indian resident or a person residing in India.
Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or
Bhutan cannot acquire or transfer immovable property in India, other than on
lease, not exceeding five years, without prior permission from the Reserve Bank
of India.
84. Can an NRI/PIO acquire residential or
commercial property in India by purchase or by way of a gift?
Yes. General Permission is available except for
citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran or Nepal.
85. Can an NRI/PIO acquire immovable property
by inheritance from a person resident outside India?
An NRI can acquire immovable property by
inheritance with the specific approval of the RBI. The property must be acquired
in accordance with the provisions of Foreign Exchange laws in force at the time
of acquisition or under FEMA regulations.
86. Can an NRI/PIO gift his property in
India to another NRI/PIO?
Yes.
87. How should the NRI/PIO pay for acquisition
of property in India?
The property should be acquired using funds
remitted to India through the normal Banking Channel or funds held in NRE/FCNR/NRO
accounts. .Such payments cannot be made using traveler's cheque or by foreign
currency notes.
88. To whom can an NRI/PIO sell his immovable
property in India?
An NRI can sell his property to a resident Indian,
another NRI or a PIO. A PIO can however sell his property only to a resident
Indian.
89. If a PIO wishes to sell his property to an
NRI/PIO what should he do?
He would need to take prior approval of the RBI.
90. Can an NRI repatriate through remittance
from abroad the sale proceeds of his property?
Yes, provided the amount repatriated is less than
the amount paid for acquiring the property in the first place. The amount paid
for acquisition must be received in foreign exchange through normal banking
channels. In addition, this amount must be the foreign currency equivalent as on
date of payment and paid by debit to the NRI account
91. Can an NRI freely repatriate the sale
proceeds of immovable property?
The facility to remit the sale proceeds of
immovable property is not available to a citizen of Pakistan, Bangladesh,
Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
The following conditions apply for repatriation of immovable property:
- Immovable property acquired through
foreign exchange:
- Acquisition should be in accordance
with the existing Foreign exchange laws;
- The purchase price is met out of
Foreign Exchange Inward Remittance or NRE / FCNR (B) account;
- Repatriation is restricted to a
maximum of two properties in the case of residential properties.
Such restrictions do not apply to commercial or industrial
properties.
- The amount of repatriation is
restricted to the foreign exchange equivalent of the purchase price.
- Immovable property acquired through
local funds: NRIs/PIOs are allowed to repatriate funds held in their NRO
account up to US $1 million per financial year. The limit includes sale
proceeds of immovable property also
- Immovable property acquired through
inheritance / settlement and legacy: If a property is acquired by way of
inheritance / settlement or legacy, there is no lock-in-period with
respect to the holding period for the property. The sale proceeds will
be credited to the NRO account and thereafter in view of the permitted
remittance up to US$ 1 million per financial year, the sale proceeds can
be repatriated. However, note that remittance of assets acquired through
"settlement" is available only on the demise of the settler.
- Immovable property acquired by raising
a loan in India: NRI/PIO acquires immovable property through a loan
obtained from authorised dealers or housing finance institutions in
India approved by National Housing Bank. The loan is raised for the
purchase of residential accommodation and is subsequently repaid by
remitting funds from abroad or by debiting NRE/FCNR accounts. Then the
authorised dealers can allow repatriation of the sale proceeds of the
residential accommodation to the extent of such loan's repaid by them
out of foreign inward remittances received through normal banking
channels or by debiting NRE/FCNR accounts.
92. Is there any restriction on repatriation of
sale proceeds of residential property purchased by an NRI/PIO?
Yes. Repatriation is restricted to sale proceeds of
not more then two residential properties.
93. Can sale proceeds of immovable property
inherited by an NRI/PIO from a person resident outside India be repatriated
abroad?
No. Prior approval from RBI is necessary with
documentary evidence in support of inheritance & tax clearance / no objection
from Income Tax authority.
94. Which accounts can sale proceeds of
residential property received by way of gift is credited?
Sale proceeds of residential property can be
credited to an NRO account only
95. Can an NRI/PIO repatriate the sale proceeds
of immovable property inherited from a Resident Indian?
Yes. Sale proceeds not exceeding US$ 1 million
can be repatriated subject to production of documentary evidence of
inheritance & tax clearance certificates to the authorized dealer. Prior
permission from RBI would be required for citizens of Pakistan, Bangladesh,
Sri Lanka, Afghanistan, China or Iran. This facility is not available for
citizens of Nepal & Bhutan.
96. Can an NRI repatriate through remittance
from abroad the sale proceeds of his property?
Yes, provided the amount repatriated is less
than the amount paid for acquiring the property in the first place. The
amount paid for acquisition must be received in foreign exchange through
normal banking channels. In addition, this amount must be the foreign
currency equivalent as on date of payment and paid by debit to the NRI
account. The facility to remit the sale proceeds of immovable property is
not available to a citizen of Pakistan, Bangladesh, Sri Lanka, China,
Afghanistan, Iran, Nepal and Bhutan.
97. Can rent received by NRI/PIO be remitted
abroad?
Yes. It can be credited to NRE/NRO account or
remitted abroad.
98. On return to India, can the NRI retain his
assets abroad?
Yes, on return to India, NRIs need not surrender
their foreign currency assets and the income earned thereon.
99. What are the provisions governing
remittance of assets by a foreign national of non-Indian origin?
A foreign national of non-Indian origin who has
retired from an employment in India or has inherited assets from a person
resident in India or who is a widow of an Indian citizen who was a resident
in India, may remit an amount not exceeding USD one million, per financial
year, on production of documentary evidence in support of acquisition /
inheritance of assets, an undertaking by the remitter and certificate by
Chartered Accountant in the formats prescribed by Central Board of Direct
Taxes.
100. What are the provisions governing
remittance of assets by NRI/PIO?
A Non-Resident Indian (NRI) or a Person of
Indian Origin (PIO) may remit an amount up to USD one million, per financial
year, out of the balances held in his Non-Resident (Ordinary) Rupee (NRO)
account, or out of the sale proceeds of assets (inclusive of assets acquired
by way of inheritance or settlement), for all bonafide purposes. The
remittance facility in respect of sale proceeds of immovable property is not
available to a citizen of Pakistan, Bangladesh, Sri Lanka, China,
Afghanistan, Iran, Nepal and Bhutan.
Remittance of current income
An NRI / PIO can freely remit current income like rent, dividend, pension,
interest etc., even if they do not maintain an NRO account.
Facilities for students
As Non-Residents, they will be eligible to receive remittances from India
based on the following conditions:
i. Up to USD 100,000 from close relatives in India on self declaration
towards maintenance, which could include remittances towards their studies
also
ii. Up to USD 1 million out of sale proceeds of assets or balances in their
account maintained with an AD in India.
International Credit Cards:
NRIs / PIO can use International Credit Cards abroad and settle bills out of
balances held in the cardholder's FCNR / NRE / Non-Resident (Ordinary) rupee
accounts.
101. What are the incomes “Deemed to accrue or
arise in India”?
The following incomes are deemed to arise in India:
- Salaries earned in India for services
rendered in India.
- Salaries payable by the Government of India
to an India citizen for service outside India.
- Dividend paid by an Indian company outside
India.
- Interest.
- Royalty.
- Fees for technical services.
102. What are the investment
opportunities available for Non-Resident Indians in India?
- Government securities or units of Unit
Trust of India
- National Savings Certificates issued by
post offices in India
- Non-convertible debentures of Indian
companies
- Bank Accounts in India
- Investment in securities or shares and
deposits of Indian firms or companies
- Investment in immovable property in India
- Investment in Mutual Funds in India
- Company deposits
103. What are the options available for an NRI
to invest in Shares & Securities in India?
There are many schemes through which an NRI can
invest in shares and securities in India. Depending upon the selected scheme
the investment can be classified as 'Repatriable' or 'Non-repatriable'. The
investment options are as follows:
- An NRI can purchase shares or
convertible debentures of an Indian Company on a Stock Exchange, under
the Portfolio Investment Scheme on repatriation and / or on
non-repatriation basis, provided the Indian Company is not engaged in
the Print Media sector.
- A non-resident Indian or a registered
FII may purchase securities, other than shares or convertible debentures
of an Indian company on repatriation and / or on non-repatriation basis.
- An NRI may invest in exchange traded
derivative contracts approved by SEBI from time to time out of rupee
funds held in India on non-repatriable basis, subject to the limits
prescribed by SEBI. Such investments will not be eligible for
repatriation benefits [FEMA Notification No.85/2003-RB, dated
17-1-2003].
104. I want to open a Portfolio Investment
Scheme A/c?
If you want to open Portfolio Investment scheme,
please contact NRI Branch Mumbai. You may contact NRI Branch, Mumbai on their
email address invest.nrimumbai@sbi.co.in
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