Common Questions
A Acquisition of immovable property in India by way of purchase by a person resident outside India
1. Under the Extant Foreign Exchange Regulations to whom is General Permission available for Purchase Immovable Property in INDIA ?
General Permission is available to purchase only a residential/commercial property in India to a person resident outside India who is a citizen of India (NRI) and who is a Person of Indian Origin (PIO).
2. Who is a Person of Indian Origin (PIO)?
For the purpose of acquisition and transfer of immovable property in India, a PIO means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (i) at any time, held Indian passport; or (ii) who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
3. Is NRI / PIO who has Purchased Residential / Commercial Property under General Permission required to file any document with Reservie Bank of India ?
NRI/PIO who has purchased residential/commercial property under general permission is not required to file any documents with the Reserve Bank.
4. Is there any Restriction on number if Residential / Commercial Property that NRI/PIO Purchase ?
There is no restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available
5.Can a Name of Foreign National of Non Indian Origin be added as a Second holder to a propert purchased by NRI/PIO ?
NO
6. Can a Foreign National of Non - Indian Origin resident outside acquire any Immovable Property by way of Purchase ?
No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer' includes among others, ‘purchase'. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of purchase.
7. 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 or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission of Reserve Bank of India.
8.Can a Person Resident outside India NRI / PIO or Foreign National of Non Indian Origin , acquire Agricultural Land ?
NO
B Transfer / sale of Immovable Property
1. Under General Permissions available to whom can NRI transfer by way of Sale his Residential / commercial Property ?
NRI can transfer by way of sale residential/commercial property in India to a person resident in India or to a NRI or a PIO.
2. Under General Permissions available to whom can PIO transfer by way of Sale his Residential / commercial Property ?
PIO can transfer by way of sale residential/commercial property in India only to a person resident in India
3. Can PIO Transfer by way of sale his Residential / commercial Property to NRI or PIO ?
No. He would need to seek Reserve Bank prior approval for transfer by way of sale residential/commercial property in India to a NRI or a PIO.
4. Can a Foreign National of Non- Indian Origin whether Resident in India or Outside India trasfer by way of sale Residential / commercial Propert in India acquired with the specific permission of Reserve Bank to a Person resident in India or outside India ?
No. A foreign national of non-Indian origin whether resident in India or outside India would need to seek prior approval of Reserve Bank for transfer by way of sale residential/property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India
C . Transfer of Residential / Commercial property in India by way of mortgage by a person resident outside India
1. Can NRI/PIO transfer by way of mortgage his residential/commercial property to an authorized dealer/housing finance institution in India?
Yes
2. Can NRI/PIO transfer by way of mortgage his residential/commercial property in India to a party abroad ?
No. He should seek prior approval of RBI.
3. Can a foreign national of non-Indian origin resident in India or outside India transfer by way of mortgage his residential/commercial property in India acquired with the specific approval of Reserve Bank to a party in India or abroad ?
No. He should seek prior approval of RBI. However, immovable property purchased by a person resident outside India who has established a Branch Office or other place of business for carrying on in India any activity in accordance with FERA/FEMA regulations, may under general permission available, mortgage such a property with an authorized dealer as a security for any borrowing.
D Mode of payment for purchase of Residential / Commercial property in India by NRI/PIO
1. Under the general permission available what is mode of payment for purchase of residential/commercial property in India by NRI/PIO ?
Under the general permission available NRI/PIO may purchase residential/commercial property in India out of funds remitted to India through normal banking channel or funds held in his NRE/FCNR (B)/NRO account. No consideration shall be paid outside India.
2. Can NRI/PIO for the purpose of acquisition of flat/house in India for his own residential use avail of loan from authorized dealer against the security of funds held in his NRE Fixed Deposit account/FCNR (B) account ?
Yes, subject to certain terms and conditions
E Repatriation of sale proceeds of Residential/Commercial property purchased by NRI/PIO
1. Can NRI/PIO repatriate the sale proceeds of residential/commercial property in India acquired by way of inward remittance through normal banking channel or by debit to NRE/FCNR (B)/NRO account? If so, what is the quantum ?
NRI/PIO may repatriate the sale proceeds of residential/commercial property in India acquired by way of inward remittance through normal banking channel or by debit to NRE/FCNR (B) account. The amount to be repatriated should not exceed the amount paid for acquisition of residential/commercial property (a) in foreign exchange received through normal banking channel or by debit to FCNR (B) account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid by debit to NRE account. The sale proceeds of residential/commercial property in India acquired by way of debit to NRO account cannot be repatriated and should be credited to NRO account only.
2. Is there any lock in period for sale of residential/commercial property purchased out of inward remittance/debit to NRE/FCNR(B) account ?
No lock in period is applicable for sale of such property.
3. Can NRI/PIO rent out the residential/commercial property purchased out of foreign exchange/rupee funds, if not required for immediate use?
Yes. Rent received, being current income may be credited to NRO/NRE account or remitted abroad.
