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NRI Guidelines

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INVEST IN INDIA:

Below are a set of guidelines for your perusal, to keep in mind before purchasing property as a Non-Residential Indian or a Foreign National residing in India.

Exchange Control Regulations Affecting the Acquisition of Residential Property in India
Consequent to the introduction of Foreign Exchange Management Act (FEMA), 1999 the Reserve Bank of India has made the following regulation called as the Foreign Exchange Management (Acquisition & Transfer of Immovable Property in India) Regulation with effect from June 1, 2000.

The current position is therefore as under:
Important Definitions

  1. A person of Indian origin (PIO) means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who –
    1. At any time, held Indian passport; or
    2. Who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955);
  2. A person residing in India means
    1. A person residing in India for more than 182 days during the preceding financial year but does not include
      1. A person who has gone out of India or who stays outside, in either case
        1. For taking up employment outside India; or
        2. For carrying on outside India business or vocation or for any other purpose as would indicate his intention to stay outside India for an uncertain period
      2. A person who comes to or stays in India otherwise than
        1. For taking up employment in India
        2. For carrying on business or vocation in India or
        3. For any other purpose as would indicate his intention to stay in India for an uncertain period.
    2. Any person or body corporate registered or incorporated in India.
    3. An office, branch or agency in India owned or controlled by a person residing outside India
    4. An office, branch or agency outside India owned or controlled by a person residing inside India
  3. Person residing outside India means a person who is not residing in India.

Acquisition & transfer of property in India by an Indian citizen residing outside India
He can:

  1. Acquire any immovable property in India other than agricultural plantation/ farmhouse; Further, in case of purchase the funds should be received in India by way of inward remittance from any place outside India or from funds held in any Non-Residing Account maintained under FEMA/ RBI regulations.
  2. Transfer any immovable property in India to a person residing in India and
  3. Transfer any immovable property other than agricultural plantation/ farmhouse to a person residing outside India if he is a citizen of India or person of Indian origin.

Acquisition & transfer of property in India by a person of Indian origin residing outside India
He can:

  1. Acquire any immovable property other than agricultural land, farm house & plantation by purchase, gift, and inheritance subject to the following conditions:
    1. In case of purchase the funds should be received in India by way of inward remittance from any place outside India or from funds held in any Non-Residing Account maintained under FEMA/ RBI regulations.
    2. Gift can be from a person residing in India or from a person residing outside India who is either a citizen of India or a Person of Indian origin. However, the property can only be commercial or residential in nature. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift.
    3. Inheritance can be from a person residing outside India provided that person had acquired the property in accordance with the provisions of the Foreign Exchange Law in force at the time of acquisition or from a person residing in India.
  2. Transfer any immovable property in India other than agricultural land, farm house, plantation by way of sale to a person residing in India or transfer residential or commercial property in India by way of gift to a person residing in India or to person residing outside India who is either a citizen of India or a person of Indian origin.
  3. Transfer agricultural land, farm house or plantation property in land by way of gift or sale to a person residing in India who is a citizen of India.

Repatriation of sale proceeds
In the event of sale of immovable property other than agricultural land/ farm house/ plantation property in India by the above two categories of persons repatriation of sale proceeds is possible subject to the following conditions:-

  1. Immovable property was acquired in accordance with the provisions of Foreign Exchange law/ Regulations in force at the time of acquisition.
  2. Amount to be repatriated should not exceed (a) amount paid for acquisition of the property in foreign exchange remitted into India or out of Funds held in FCNR account OR (b) the foreign currency equivalent as on the date of payment of the amount paid from funds held in NRE account for acquisition of property.
  3. Repatriation of sale proceeds in case of residential properties is restricted to maximum two properties.

In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India (as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account. NRI/PIO are also allowed to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account / sale proceeds of assets by way of purchase / the assets in India acquired by him by way of inheritance / legacy. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 (US Dollar One million only) in any financial year requires prior permission of the Reserve Bank.

Acquisition or transfer of immovable property in India by citizens of certain countries
Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal , Bhutan, Macau or Hong Kong can take immovable property in India by way of lease for a period not exceeding 5 years without permission from RBI. For all other types of acquisition or transfer of immovable property in India they need to take prior permission of RBI.

Summary of acquisition and transfer of immovable property in India:

Indian Nationals Residing In India Indian Nationals Residing Outside India Persons of Indian Origin Residing Outside India.
No restrictions 1. Can acquire any immovable property other than agricultural land / plantation / farm house. 1. Can acquire any immovable property other than agricultural land / plantation / farm house out of foreign currency funds or by way of gift from person residing in India or from a person residing outside India who is either a citizen of India or a Person of Indian origin or by way of inheritance from person residing outside India provided that person had acquired the property in accordance with the provisions of the Foreign Exchange Law in force at the time of acquisition or from a person residing in India
2. Can acquire any immovable property other than agricultural land / plantation / farm house. 2. Can sell any immovable property other than agricultural land / Plantation / farm house to a person residing in India.
3. Can acquire any immovable property other than agricultural land / plantation / farm house. 3. Can gift residential or commercial property to a person Residing in India or to person resident outside India who is a citizen of India or PIO
4. Can sell / gift any agricultural land / plantation / farm house to an Indian citizen residing in India.

 
Persons of Indian origin does not include citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan.

Foreign Citizens Residing in India Foreign Citizens Residents Outside India Indian Branch/ Office of Foreign Concern.
No restrictions, except in case of Nationals of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal , Bhutan, Macau or Hong Kong who will require prior permission from RBI in all cases except where the immovable property is acquired by way of lease for less than 5 years. Can acquire only after prior permission from RBI. Can acquire immovable property which is required for carrying on its activities, a declaration in From IPI will have to be filed with RBI within 90 days of such acquisition (the above procedure is not applicable to a liaison office)

 
 

NRI FAQs

NRI means a person who is a citizen of India and has not been residing in India for more than 182 days during preceding financial year, or has gone out of India for the purpose of employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration.
A person of Indian origin means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who has: • Held an Indian Passport at any time, or • Who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955
Yes, NRIs/PIOs can acquire immoveable property in India other than agricultural land/farm house/plantation property i.e. residential and commercial property.
Payments can be made in Indian Rupees from funds held in non-resident accounts maintained by the NRI/PIO by any of these methods: • Cheque • Draft • Pay Order • Banker's Cheque • Wire Transfer • RTGS/NEFT
Yes, the Reserve Bank has granted general permission to NRIs/PIOs to acquire or dispose off commercial or residential properties by way of gift from or to a person resident in India or NRI or PIO. However, agricultural land / plantation property / farm house in India cannot be acquired by way of gift. Further, NRI / PIO can gift an agricultural land / a plantation property / a farm house in India only to a person resident in India who is a citizen of India
The Reserve Bank has granted general permission to certain financial institutions and authorized dealers for providing housing finance to NRIs/PIOs for acquisition of a house/flat subject to certain conditions. The criteria regarding quantum of loan, margin money and period of repayment will be at par with those applicable to resident Indians.
Documents with the following details need to be furnished: • Nationality • Whether NRI or PIO (Person of Indian Origin) • Residential status • Passport details • Complete postal & permanent address (local or overseas, as applicable) • Name, address & account no. of customer's bank These details need to be produced because this is a directive by the Government of India to all builders as a mandatory requirement. Failure to furnish the details called for is an offence punishable under the Foreign Exchange Management Act, 2000.
Yes, definitely. Our projects are pre-approved by leading HFIs/Banks. We can help you acquire necessary approvals for your home loan from these HFIs and co-ordinate with them (as developers) to provide all necessary documents.
It is the sum of the Built-Up Area (Carpet Area + Wall Area) and the Common Area.
General Power of Attorney (GPA) is an authorization given by the customer to a person if he is, owing to his professional commitments, unable to personally attend to the purchase, negotiations, registration and completion of other formalities pertaining to the apartment that he has bought. He will appoint and constitute one person known to him as agent and attorney in his name. And on his behalf, this one person will do any of the following acts deeds and things; this is given in general to do all the activities on his behalf. Power of attorney given to a person only for a specific purpose, for example, possession or registration purposes is called Specific Power of Attorney.
Agreement to sell is a legal document which is executed between the builder and the customer, after the customer has paid 20% of the agreement value of the apartment. This document will have the terms and conditions of the seller and the buyer after the purchase of the property. This is a basic document on which bank or any financial institution will lend money to the customer. But this is not considered as the final document when it comes to the title of the property. Sale deed is the final and very important document which authenticates that the title of the property is conveyed to the buyer.
Any legal document which is not executed on a stamp paper has to be registered with the Government by paying the necessary judicial charges. This is called e-stamping/franking. Though printed on the stamp paper, some documents need to be authenticated by a legal person or an advocate who is called a notary and the process is called notarizing. Documents such Power of Attorney, Affidavit, etc. need to be notarized.
Stamp Duty is payable on ‘Government Market Value’ of property or the consideration agreed to be paid for purchase of the same, whichever is higher. In areas within the limits of the Municipal Corporation, the rate of Stamp Duty payable is 6% whereas for areas outside the Corporation Limits, the rate is 5%.
If the construction of the project in which the flat / commercial premises is situated is in progress, the agreed purchase price is to be paid to the promoter in instalments according to the progress of the construction of the building in which the flat / commercial premises is situated.
A duly registered Agreement for Sale coupled with possession effectively completes the de-facto title of such a purchaser to the unit agreed to be purchased by him / her. However, in case of a co-operative housing society being formed by all the purchasers in the project, the land and all the buildings thereon are conveyed to the co-operative housing society. The purchaser of every unit in the project will be admitted as a member of the society and share certificate of five shares will be allotted to each purchaser. In the event a Condominium of Apartment Owners of all the units in a project is to be formed, a Deed of Apartment will be executed in favour of the purchasers of each unit, thereby conveying the unit together with a pro-rata undivided share in the land covered by the project and in the common areas and facilities thereof.
All transactions are governed by the provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963. Neither the promoter nor the purchaser can contract out of the said Act.
'Carpet area' is the entire area measured from wall-to-wall excluding the thickness of all walls.
'Carpet area' of a terrace is the entire area thereof measured from wall-to-wall excluding the thickness of all walls.
The saleable built-up area of any unit is the actual area including the thickness of the interior / exterior walls, the area of any balconies or sit-outs at eye-level and adjoining terraces and a certain percentage of the aggregate area of the common areas of the building in which such a unit is situated.
Capital Gain will accrue from the date of Sale Deed or possession or whichever is earlier and if the property is sold within 3 years of the above date, the same will be treated as Short Term Capital Gain if this period is more than 3 years from the above, the same will be treated as Long Term Capital Gain.

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