NRI Corner
1. Who is a non-resident Indian (NRI)?
Under the Foreign Exchange Management Act of 1999, Non Resident Indians are defined as follows: Non Resident Indian means an individual being a citizen of India or a person of Indian origin (not being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan) who is not a "resident". Explanation : A person is deemed to be of Indian origin if he/she or either of his/her parents or any of his/her grandparents were born in undivided India.
2. Do non- resident citizens require permission of The Reserve Bank of India to acquire residential/ commercial property in India?
No permission is required by non-resident Indian nationals to acquire immovable property in India.
3. Do foreign citizens of Indian origin require permission of The Reserve Bank of India to purchase immovable property in India for their residential use?
No, Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad to purchase immovable property in India for their bonafide residential purpose.
4. In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?
Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of Non-resident ordinary account (NRO)/Non-resident external account (NRE)/Foreign Currency Non-resident account(FCNR).
5. Do non- resident citizens require permission of The Reserve Bank of India to acquire residential/commercial property in India?
No permission is required by non-resident Indian nationals to acquire immovable property in India.
6. Can such property be sold without the permission of The Reserve Bank of India?
Yes. The Reserve Bank of India 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 of paid out of balances in NRE/FCNR accounts.
7. Can sale Proceeds of such property if and when sold be remitted out of India?
In respect of residential properties purchased on or after 26th May 1993, The Reserve Bank of India considers applications for repatriation of sale proceeds of up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non- resident rupee account of the owner of the property. The Reserve Bank of India also considers repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for acquisition of commercial properties.
8. Are any conditions required to be fulfilled if repatriation of sale 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 the date of payment of final instalment of consideration amount, whichever is later.
9. What is the procedure for seeking such repatriation?
Application for necessary permission for remittance of sale proceeds should be made in Form IPI 8 to the Central Office of The Reserve Bank of India at Mumbai within 90 days of the sale of the property.
10. Can foreign citizens of Indian origin acquire or dispose of residential property by way of gifting it?
Yes. The Reserve Bank of India has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two houses 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, subject to compliance with tax laws.
11. Can sale proceeds of such property be remitted out of India?
Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after May 26, 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final of consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of the Reserve Bank of India within 90 days of the sale of property in Form IPI 8.
12. Can they dispose of such properties?
Yes.
13. Can the properties (residential/commercial) be given on rent if not required for immediate use?
Yes. The Reserve Bank of India has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income has to be credited to NRO account.
14. Can NRIs obtain loans for acquisition of a house flat for residential purpose from authorised dealers/finance institutions providing housing finance?
The Reserve Bank of India has granted general permission to certain financial institutions providing housing finance. 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.
15. Can Indian companies grant loans to their NRIs staff?
The Reserve Bank of India permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.