Q. Do non-resident Indian nationals require permission of the
Reserve Bank of India to
acquire residential/commercial property in India?
Ans. No permission is required by non-resident Indian nationals
to acquire immovable property in India.
Q. Are foreign nationals of Indian origin allowed to purchase
immovable property in India?
Ans. Yes, foreign nationals of Indian origin, whether resident
in India or abroad, have
been granted general permission to purchase immovable property in India.
Q. What should be the method of payment for purchasing
residential immovable property in India by foreign nationals of
Indian origin under the general permission?
Ans. The purchase consideration should be met either out of
inward remittances in foreign exchange through normal banking channels or out
of funds from NRE/FCNR accounts maintained with banks in India.
Q. Are there any formalities to be completed by foreign
nationals of Indian origin for purchasing residential immovable property in India?
Ans. They are required to file a declaration in Form IPI 7 with
the Central Office of the Reserve Bank of India at Mumbai within a period of
90 days from the date of purchase of immovable property or final payment of
purchase consideration alongwith a certified copy of the document evidencing
the transaction and bank certificate regarding the consideration paid.
Q. Can such property be sold without the permission of the
Reserve Bank of India?
Ans. 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 or paid out of balances in
NRE/FCNR accounts. Top
Q. Can the rental income from such property be remitted
outside India?
Ans. No. Such income cannot be remitted abroad and will have to
be credited to the ordinary non-resident rupee account of the owner of the
property. Restricted remittances are, however, now permitted.
Q. Can such property be sold without the permission of the
Reserve Bank of India?
Ans. Yes. However, such
property can be sold to other foreign nationals of Indian origin provided funds
towards the purchase consideration are either remitted to India or paid
out of balances in NRE/FCNR account.
Q. Can sale proceeds of such property if and when sold be
remitted out of India?
Ans. In respect of residential properties purchased on or after
May 26, 1993, the Reserve bank of India considers applications for
repatriation of sale proceeds 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 May 26, 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.
Q. What are the conditions required to be fulfilled for
repatriation of sale proceeds?
Ans. 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 of consideration
amount, whichever is later.
Q. What is the procedure for seeking such repatriation?
Ans. 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.
Q. Can foreign citizens of Indian origin acquire or dispose
of residential property by way of gifting it?
Ans. 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,
provided gift tax has been paid. Top
Q. Can foreign citizens of Indian origin acquire commercial
properties in India?
Ans. Yes. Under the general permission granted by the Reserve
Bank of India properties other than agricultural land/farm house/plantation
property 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 purchaser\'s
NRE/FCNR accounts maintained with banks in India and a declaration is submitted
to the Central Office of the Reserve Bank of India in Form IPI 7 within a period
of 90 days from the date of purchase of the property/final payment of purchase
consideration.
Q. Can they dispose of such properties?
Ans. Yes
Q. Can sale proceeds of such property be remitted out of India?
Ans.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.
Q. Can the properties (residential/commercial) be given on
rent if not required for immediate use?
Ans. 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.
Q. Can NRIs obtain loans for acquisition of a house/flat for
residential purpose from financial institutions providing housing finance?
Ans. 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. Top
Q. Can an dealer grant loans to NRIs for acquisition of a
flat/house for residential purposes?
Ans. Dealers have been granted permission to grant loans to non
resident Indian nationals for acquisition of house/flat for self-occupation on
their return to India
subject to conditions. Repayment of the loan should be made within a period not
exceeding 15 years out of inward remittance though banking channels or out of
funds held in the investors’ NRE/FCNR/NRO account.
Q. Can Indian companies grant loans to their NRI staff? Ans. 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. Q. Can an dealer grant
housing loan to non-residents of Indian nationality where he is a principal
borrower with his resident close relative as a co-obligate/guarantor, or where
the land is owned jointly by such NRI borrower with his resident close
relative? Ans. Yes. However, in such cases the payment of margin money and
repayment of the loan installments should be made by the NRI. | 
