RESERVE BANK OF INDIA (RBI) GUIDELINES ON NRI INVESTMENT
The federal government has considerably eased entry norms for NRI investment in real estate. Foreign citizens of Indian origin (PIOs) have been permitted to invest without the need to obtain approval from the Reserve Bank of India. With the passage of FEMA, the power to affect repatriation proceeds has been decentralized and delegated to authorize foreign exchange dealers. What is more, even the rental income can be repatriated now. It makes sense for NRIs now to earmark a portion of their investment portfolio in Real Estate and earn competitive return on investment.
PERMISSION FOR PURCHASE OF RESIDENTIAL PROPERTY / COMMERCIAL PROPERTY.
- (i) NRIs holding Indian passports - No permission required
- (ii) NRIs holding foreign passports - Intimation to RBI via form
- (iii) PI - 7 within 90 days of purchase of property or final payment of consideration. Funds through NRE/NRO accounts.
SALE OF PROPERTY
- » Property held by NRIs in India can be sold. No permission is required from the Reserve Bank of India.
REPATRIATION OF SALE PROCEEDS
- » Repatriation of proceeds from sale of residential property purchased on or after 26th May 1993 is allowed.
- » The RBI will consider repatriation of the consideration amount remitted in foreign exchange for the acquisition of 2 properties. The sale has to have taken place after 3 years from the date of final purchase deed or from the date of final payment.
- » Application of repatriation (IPI-8) has to be done within 90 days of the sale of the property.
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