Our Mission NRI Property Buying

An NRI is a person who is not residing presently in India. And according to the Foreign Exchange Management Act (FEMA), 'a person resident in India' includes an individual who is residing in India for more than 182 days during the period of the preceding financial year.

It does not include a person who has gone out of territories of India on employment, business or vocation for any uncertain period.

NRIs are allowed to buy and sell properties in India. The NRIs should do the acquisition and transfer of property in accordance with the FEMA. The properties should be purchased or aquired through a registered conveyance deed.

It case of a purchase being made on a power of attorney ,there should be an agreement to sell and the power of attorney are executed by the seller in favor of the buyer.

RBI Permission not needed
NRIs do not require permission of the Reserve Bank of India (RBI) in acquisition of a residential or commercial property in India. The RBI has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase property in India for their residential purposes. The due payment has to be made either in forms of inward remittances in foreign exchange through normal banking channels or out of funds in a NRE or FCNR account maintained with a bank within India.

Declaration mandatory
Foreign nationals of Indian origin, who are interested in purchasing a residential property in India under the general permission are required to file a declaration with the central office of the RBI at Mumbai within 90 days from the date of purchase of the property or final payment of amount. This needs to include a certified copy of the document as an evidence of the transaction and bank certificate regarding the amount paid.

Sale possible
The RBI has granted an approval for sale of such property without its prior permission. However, where the property is being purchased by another foreign citizen of Indian origin, the funds towards this purchase should either be remitted to India or paid out of the balance in a NRE or FCNR account. The remittance of the sale proceeds depends on the mode of acquisition -whether it was acquired out of funds remitted from outside or out of rupee funds. A property can be acquired out of rupee funds by a NRI before leaving India, or after leaving India, but from a savings bank account in an Indian bank out of income earned in India.

Repatriation
The proceeds can be repatriated provided the amount does not exceed the amount paid to acquire the property in foreign exchange received from overseas, the amount paid from a FCNR account, or the foreign currency equivalent of the amount paid from funds held in a NRE account.

On residential properties purchased, the RBI considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of two properties. The balance amount of sale proceeds, if any, will have to be credited to an ordinary non-resident rupee account of the owner of the property.

Applications for the 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 installment of consideration amount, whichever is later.

Gifting property
The RBI has granted general permission to all the foreign citizens of Indian origin, to acquire or sell -off properties - up to two - by the 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 applicable tax laws.

It also permits foreign nationals of Indian origin to transfer by way of gift property held by them in India to relatives subject to the condition that the provisions of all other laws, including the Foreign Contribution (Regulation) Act, are complied with.

Finance
The RBI granted its approval to the financial institutions lending home loans to the NRIs in the process of acquiring residential property for self –possession under strict guidelines and conditions. The underlining purpose of home loans, the margin money clause and the loan quantum shall be on similar lines as compared with those applicable to housing loans to residents.

The loan repayment period should not exceed a tenure of 15 years out of inward remittances or out of funds held in the investors' NRE, FCNR or NRO account. The amount of the loan cannot be credited to any NRE or FCNR account of a NRI or a PIO. The loan amount needs to be fully secured by equitable mortgage of the proposed property under acquisition.

Also, the loan installments, interest and other miscellaneous charges shall be paid by the NRI or PIO as remittances from outside India. The RBI has granted a general permission to lease out a property in India. The rental income coming in from such investments are also eligible for repatriation.


Interest Rate FAQ

Who is a Non-Resident Indian (NRI)?
A: An Indian Citizen who stays abroad for employment/carrying on business outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Non-residential foreign citizens of Indian Origin are treated on par with non- residential Indian citizens (NRIs).

Who is a person of Indian Origin (PIO) is?
A: A Person of Indian Origin (PIO) is a person residing in any other country but whose ancestors originated from India at least four generations away.

What is an OCB?
A: An OCB(Overseas Corporate Body) is predominantly owned by people of Indian nationality or origin residing outside India and includes companies operating overseas, societies which are owned, directly or indirectly, by individuals of Indian nationality as also overseas trusts in which at least 60% of the beneficial interest is irrevocably held by such individuals. account.

What are the routes of investments for NRIs and Overseas Corporate Bodies (OCBs) in India?
A: NRIs and OCBs are allowed to invest , both, through the RBI route and also the Government route, i.e., through the Foreign Investment Promotion Board. Investments by NRIs and OCBs are permitted up to 100% equity in real estate development activities and civil aviation sectors. Investment, made by the NRIs and OCBs, are fully able of transfer from a foreign country to the investor’s home country, except in the case of real estate, which consists of a 3 year lock-in period on initial investment and, 16% cap on dividend repatriation.

What is the limit to the number of investments in acquiring commercial properties in India?
A: As far as NRI investment is concerned in the real estate sector in India, there is currently no limit on the number of investments that could be made in acquiring any commercial properties in India.

Can an acquisition be made of any immovable property in India by a person of Indian origin, by way of inheritance?
A: A person of Indian origin, residing outside India, is eligible to acquire any immovable property in India by way of inheritance, from a resident outside India, who must have had acquired such property under the provisions of foreign exchange law prevalent at the time of acquisition by the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000.

Would an NRI be permitted to send remittances outside India, from the assets inside India that are inherited by them?
A: Yes. The Reserve Bank Of India considers such applications from NRIs for remittances of assets inherited by them in India. Such a remittance would be permitted up to US$ 100,000 per year.

What is the approved method of sending remittances into India?
A: The approved method of sending remittances into India is through normal banking channels.

What does the Foreign Exchange Management Act (FEMA) pertain to?
A: Any residential status and nature of transaction which may be a capital account transaction (e.g. purchase and sale of shares, property) or a current account transaction (e.g. remittance of income on shares or property) are the cornerstones of FEMA. Under this act, certain types of transactions do not require RBI permissions while others would require prior approval of RBI.

Is a person of Indian origin residing outside India, allowed to gift properties acquired earlier in terms of provisions of FEMA/ FERA?
A: Certainly yes. A person of Indian origin residing outside India is eligible to transfer residential or a commercial property in India in terms of a gift to an indivisual residing in India or to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.


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