FAQ

Question :

Who is a Non-Resident Indian (NRI) and Person of Indian Origin (PIO)?

Answer :

Any Indian citizen staying abroad for employment or business or staying for an uncertain duration is a non-resident. Persons posted in U.N. Organizations and officials deputed abroad by Central / State Government and PSUs on temporary assignments are also treated as non-residents. Non-resident foreign citizens of Indian Origin are treated on par with NRIs for the purpose of certain facilitations.

A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal), is deemed to be of the Indian Origin if he held an Indian Passport at any time, or he or his father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955.

Question :

Do NRIs require permission of the Reserve Bank of India to acquire residential/commercial property in India?

Answer :

No, permission is not required by non-resident Indian nationals to acquire immovable property in India.

Question :

>Are foreign nationals of Indian origin allowed for purchasing immovable property in India?

Answer :

Yes, foreign nationals of Indian origin, whether resident in India or abroad, have been granted general permission to purchase immovable property in India.

Question :

What should be the method of payment for purchasing residential immovable property in India by foreign nationals of Indian origin under the general permission?

Answer :

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.

Question :

Are there any formalities to be completed by foreign nationals of Indian origin for purchasing residential immovable property in India?

Answer :

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.

Question :

Can such property be sold without the permission of the Reserve Bank of India?

Answer :

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.

Question :

Can sale proceeds of such property if and when sold, be remitted out of India?

Answer :

In respect of 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.

Question :

What are the conditions required to be fulfilled for repatriation of sale proceeds?

Answer :

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 or consideration amount, whichever is later.

Question :

What is the procedure for seeking such repatriation?

Answer :

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.