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Do
non-resident Indian citizens require permission of Reserve Bank to acquire
residential/commercial properly in India? |
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No. |
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Do foreign
citizens of Indian origin require permission of Reserve Bank to purchase immovable
property in India for their residential use? |
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Yes. However,
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 of
Reserve Bank. |
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In what
manner the purchase consideration for the residential immovable property should be paid by
foreign citizens of Indian origin under the general permission?. |
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The purchase
consideration should be met 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. |
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What are
the formalities required to be completed by foreign citizens of Indian origin for
purchasing residential immovable property in India under the general permission.
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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 consideration alongwith a certified copy of the document evidencing
the transaction and bank certificate regarding the consideration paid. |
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Can such
property be sold without the permission of Reserve Bank? |
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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. |
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Can sale
proceeds of such property if and when sold be remitted out of India? |
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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. |
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Are any
conditions required to be fulfilled if repatriation of sale proceeds is desired?
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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 instalment
of consideration amount, whichever is later. |
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What is
the procedure for seeking such repatriation? |
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Applications
for necessary permission for remittance of sale proceeds should be made in form IPI 8 to
the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property. |
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Can
foreign citizens of Indian origin acquire or dispose of residential property by way of
gift? |
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Yes. 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. |
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Can
foreign citizens of Indian origin acquire commercial properties in India? |
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Yes. Under
the general permission granted by Reserve Bank 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 purchasers' NRE/FCNR
accounts maintained with banks in India and a declaration is submitted to the Central
Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase
of the property/final payment of purchase consideration. |
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Can they
dispose of such properties? |
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Yes. |
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Can sale
proceeds of such property be remitted out of India? |
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Yes.
Repatriation of original investment in respect of properties purchased by foreign citizens
of Indian origin on or after 26th May 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 instalment of consideration amount,whichever is later. Applications for the
purpose are required to be made to the Central Office of Reserve Bank within 90 days of
the sale of property in form IPI 8. |
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Can the
properties (residential/commercial) be given on rent if not required for immediate use? |
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Yes. Reserve
Bank has granted general permission for letting out of any immovable property in India.
The rental income or proceeds of any investment of such income has to be credited to NRO
account. |
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Can NRIs
obtain loans for acquisition of a house/flat for residential purpose from financial
institutions providing housing finance? |
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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 acquisition of houses/flats for self-occupation subject to certain
conditions. |
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Can
authorised dealer grant loans to NRIs for acquisition of a flat/house for residential
purposes? |
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Authorised
dealers have been granted permission to grant loans up to non-resident Indian nationals
for acquisition of house/flat for self-occupation on their return to India subject to
certain conditions. Repayment of the loan should be made within a period not exceeding 15
years out of inward remittance through banking channels or out of funds held in the
investments' NRE/FCNR accounts. |
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Can Indian
companies grant loans to their NRI staff? |
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Reserve Bank
permits Indian firms/companies to grant housing loans to their employees deputed abroad
and holding Indian passport subject to certain conditions. Source: Reserve Bank of
India |
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What are the options available for obtaining guarantors
while applying for a HDFC/LIC loan ? |
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One will need
a guarantor for a loan mainly for collateral security. The guarantor will have to
demonstrate appropriate networth to cover for the loan. Usually one can have a guarantor
in any city where the loan issuer has a branch. Talk to loan issuers they will work
something out for NRIs and foreign banks. |
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While
purchasing real estate most developers demand a Power of Attorney in their favor, is there
a way to avoid it? |
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One can
choose not to grant the Power of Attorney (POA) to the developers. However this will
mandate the mailing of all documents to your foreign residence and associated time delays.
A good compromise is to grant the POA to the builder only for specific necessary items. |
