NRI FAQ
Q.PERMISSION FOR PURCHASE OF RESIDENTIAL PROPERTY / COMMERCIAL PROPERTY.
- Ans. 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 along with 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.
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 sale proceeds of such property if and when sold be remitted out of India?
- Ans.With respect to the 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 off dispose of residential property by way of gifting it?
- 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 off such properties?
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.
Q. Can a 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 a 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.
