NRI FAQ's

General FAQs:

What is the definition of an NRI?
An Indian Citizen who stays abroad for employment / carrying on business or vacation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of staying abroad is a non-resident. (Persons posted in U.N. organizations and officials deputed abroad by Central / State Government and Public Sector Undertakings on temporary assignments are also treated as non-residents) Non-resident foreign citizens of Indian Origin are treated at par with non-resident Indian citizens.
What is the definition of a foreign citizen?
A foreign citizen is deemed to be of Indian origin if,
  • He held an Indian passport at any time, OR
  • He or his father or paternal grand-father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
    This citizen should be other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal)
Do NRI citizens require permission of The Reserve Bank to acquire residential/commercial property in India?
No.
Do foreign citizens of Indian origin require permission of The Reserve Bank to buy immovable property in India for their residential use?
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 bona fide residential purpose. They are therefore not required to obtain separate permission from The Reserve Bank.
How can foreign citizens of Indian origin pay for a residential immovable property in India?
The payment should be made either out of inward remittances in foreign exchange through normal banking channels or out of funds from NTE/FCNR accounts maintained with banks in India.
What are the formalities to be completed to purchase residential immovable property in India?
They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase along with a certified copy of the document confirming the transaction and bank certificate regarding the payment.
Can foreign citizens of Indian origin acquire or dispose off residential property by way of gift?
Yes. The Reserve Bank 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.
Can foreign citizens of Indian origin acquire commercial properties in India?
Yes. Under the general permission granted by the reserve Bank of India with the same procedure as residential property.
Can the properties (residential/commercial) be given on rent by foreign citizen of Indian origin if not required for immediate use?
Yes. The rental income or proceeds of any investment of such income has to be credited to NRO account.
Can NRIs obtain loans for acquiring house for residential purpose from financial institutions providing housing finance?
Yes. Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC,LIC Housing Finance Ltd. etc. to grant housing loans to non-resident Indian nationals for acquiring houses for self-occupation subject to certain conditions.
Can NRI staff avail loans from their Indian companies?
Yes. Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.
Where can one find regulations/directions issued by Reserve Bank for acquisition and transfer of immovable property in India by a person resident outside India?
Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India have been notified vide RBI Notification No. FEMA 21/2000-RB dated May 3, 2000 as amended vide Notification No. FEMA 64/2002-RB dated June 29, 2002 and Notification No. FEMA 65/2002-RB dated June 29, 2002 and relevant directions issued in the form of A. P. (DIR Series) Circulars. These are available on RBI web site: www.fema.rbi.org.in
Can a person resident outside India (i.e. a NRI or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of purchase?
No.

Sales of Property

Can NRI sale property in India?
Yes.
Whom can an NRI sale/ transfer a property in India?
An NRI can sell/ transfer the property in India to a citizen of India or NRI or foreign national if Indian origin.
Whom can NRI/PIO transfer by way of sale his agricultural land/plantation property/farm house in India?
Under the general permission available NRI/PIO may transfer by way of sale his agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.
Can such property be sold without the permission of Reserve Bank?
Yes. Reserve Bank 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.
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, Reserve Bank 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 26th May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.
We have tried to dispel the general doubts and queries, still in case of any question, query or doubt feel free to contact us.

FAQs DISCLAIMER

The FAQs are based on the current legalities and practices. Narayan Realty makes no claim for its authentication. The answers mentioned are the views and general knowledge and no legal claim or justification.


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