Q. Do non-resident Indian nationals require permission of Reserve Bank to acquire residential/ commercial property in India?
Ans. No permission is required by non-resident Indian nationals to acquire immovable Property in India.

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

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

Q. What way the Non-resident Indian can finance the flat?
Ans. The purchase of the flats can be financed from the fresh remittance through the normal banking channels or from payment from original non-resident account or from Non-resident (External) Accounts. When the flat is under construction, it may be possible to get instalment facilities from the builder. Loan may also be available in India for purchase of flats, for example from Housing Development Finance Corporation, ANZ Grindlays Bank, Citi Bank etc.

Non-resident Indians who are citizens of India (India Passport holders) are eligible for housing finance for the acquisition of an immovable property or construction of a new house, or a flat for their occupation or for that of their family in India. But the HDFC also considers granting of loans to non-resident Indians even if they are abroad, provided a family member of his or her in India is made a co-borrower and a power of attorney is given to his representative in India.

Q. Non-resident Indians are staying abroad can the property be purchased through the agent or through the Power of Attorney?
Ans. The non-resident Indians who are staying abroad may enter into an agreement through their relatives and/ or by executing the Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or Developer, drafting and signing of agreements, taking possession, etc.). These formalities can be completed through some known person who can be given the Power of Attorney for this purpose. Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be drafted on the stamp paper bought in India.

Q. Are there any formalities to be completed by foreign nationals of Indian origin for purchasing residential immovable property in India?
Ans. They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Bombay within a period of 90 days from the date of purchase of immovable property.

Q. Can such residential property be given on rent if not required for immediate residential use?
Ans. Yes.

Q. Can the rental income from such property be remitted outside India?
Ans. No. Such income cannot be remitted abroad and will have to be credited to the ordinary non-resident rupee account of the owner of the property.

Question Answers Regarding Exchange Control Regulations in Respect of NRI investment in movable property

Q. Do non-resident Indians i.e. Indian citizens resident abroad require permission of Reserve Bank to acquire any immovable property in India?
Ans. No specific permission is required by non-resident Indian nationals to acquire immovable Property in India other than agricultural/ plantation/ farmhouse.

Q. Do non-resident Indians require permission to transfer any immovable property in India to a person resident in India ?
Ans. No specific permission is required by Non-resident Indians to transfer any immovable property in India to a person resident in India.

Q. Do non-resident Indians require permission to transfer any immovable property to a person of Indian origin resident outside India/ Non-resident Indian ?
Ans. No specific permission is required for said transfer of any immovable property, other than agricultural, or plantation property or farm house.

Q. What is the position in respect of a person of Indian origin resident outside India (PIO) for acquisition/ transfer of immovable property in India?

(i) A PIO does not require any specific permission to acquire any immovable property other than agricultural land/ farm house/ plantation property in India by purchase, from out of funds:

received in India by way of inward remittance through banking channel from any place outside India; or
held in any non-resident account maintained in accordance with the provisions of the Foreign Exchange Management Act and the regulations made by the Reserve Bank under the Act.

(ii)A PIO does not require any specific permission to acquire any immovable property in India other than agricultural land/ farm house/ plantation property by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India.

(iii)A PIO does not require any specific permission to acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of the Regulations of FEMA or from a person resident in India.

(iv) A person of Indian origin resident outside India does not require any permission to transfer any immovable property in India other than agricultural land/ farmhouse/ plantation property, by way of sale to a person resident in India.

(v) A PIO does not require any specific permission to transfer agricultural land/ farm house/ plantation property in India, by way of gift or sale to a person resident in India who is a citizen of India.

(vi) PIO does not require any specific permission to transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a PIO.

Q. How should the purchase consideration for acquiring immovable property in India, be met?
Ans. The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from Non-resident accounts maintained with banks in India

Q. What way the Non-resident Indians can finance the flat?
Ans. The purchase of the flats can be financed from the fresh remittance through the normal banking channels or from payment from non-resident accounts. When the flat is under construction, it may be possible to get instalment facilities from the builder. Loan may also be available in India for purchase of flats, for example from Housing Development Finance Corporation, ANZ Grindlays Bank, Citi Bank etc.

Q. Can Non-resident Indians purchase property in India through an agent or through the Power of Attorney?
Ans. The non-resident Indians who are staying abroad may give authority to their relatives/ agents by executing Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or developer, drafting and signing of agreements, taking possession, etc.). Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be prepared on the stamp paper bought in India.

Q.What are the provisions for remittance of sale of proceeds of any immovable property by Non-resident Indians/ Person of Indian origin, resident outside India ?
Ans. Repatriation outside India, including credit to RFC, NRE or FCNR account, of sale proceeds of any immovable property situated in India, requires prior permission of the Reserve Bank except in the following circumstances:

In the event of sale of immovable property other than agricultural land/ farm house/ plantation property in India by a person resident outside India, who is a citizen of India, or a person of Indian origin, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied

the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of Regulations under FEMA
the amount to be repatriated does not exceed

(a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in Foreign Currency Non-Resident account or
(b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property.
(c) In the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

Reserve Bank has removed the existing lock-in-period for repatriation of the sale proceeds of immovable property purchased in India by NRIs/ PIOs. Accordingly, it will be in order for authorized dealers to allow remittace of sale proceeds of immovable property in India acquired by NRIs/ PIOs, irrespective of the period for which the property was held. The sale proceeds allowed to be repatriated should, however, not exceed the foreign exchange brought in to acquire the property.

Q. What is the position regarding Refund of purchase consideration on account of non-allotment of flats/ plots/ cancellation of bookings/ deals in respect of immovable property purchased by NRIs/ PIOs inIndia.
Ans. With a view to allow credit to NRE/ FCNR account of refund of purchase consideration by seller on account of cancellation of bookings/ deals for purchase of residential, commercial property, Reserve Bank clarified that it will be in order for authorised dealers to allow Non-resident Indians/ Persons of Indian Orign to credit refund of application/ earnest money/ purchase consideration made by the housing building agencies/ seller on account of non-allotment of flat/ plot/ cancellation of bookings/ deals for purchase of residential commercial property, together with interest, if any (net ofincome tax payable thereon),to NRE/ FCNR account, provided, the original payment was made out of NRE/ FCNR account of the account-holder or remittance from outside India through normal banking channels and the authorised dealer is satisfied about the genuineness of the transaction.

Q. Can NRI/ PIO rent out their immovable property in India?
Ans. Yes. The NRIs/ PIOs can freely rent out their immovable property in India without seeking any permission from the Reserve Bank. The rental income being a current account transaction is freely repatriable outside India.

Q. Where can one contact with RBI for clarifications/ approvals etc. in respect of immovable property in India?
Ans. The Chief General Manager, Reserve Bank of India, Central Office, Exchange control Department, Foreign Investment Division (III), Mumbai - 400 001.