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:
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:-
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.
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.
|Indian Nationals Residing In India||Indian Nationals Residing Outside India||Persons of Indian Origin Residing Outside India.|
|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)|