Q1. Can
non-resident Indian citizens require permission of The
Reserve Bank to acquire residential/commercial property
in India?
Ans. No.
All Indian citizens are entitled to buy property in
India, irrespective of their residential status.
Q2. Do
foreign citizens of Indian origin require permission of
the Reserve Bank to purchase immovable property in India
for their residential use?
Ans. Yes.
However, the RBI 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
The Reserve Bank.
Q3. Who
is a foreign citizen of Indian Origin?
Ans. A
foreign citizen is deemed to be of Indian Origin if : i)
he held an Indian Passport at any time or ii) he or his
father or paternal grand father was a citizen of India
by virtue of the Constitution of India or the
Citizenship Act, 1955. However this does not apply to
citizens of Pakistan, Bangladesh, Afghanistan, Bhutan,
Sri Lanka or Nepal)
Q4. How
should the purchase of residential immovable property be
paid for by foreign citizens of India origin under the
general permission?
Ans. The
purchase consideration should be met either out of
inward remittance in foreign exchange through normal
banking channels, or out of funds from NRE/FCNR accounts
maintained with banks in India.
Q5.
What formalities have to be completed by foreign
citizens of Indian origin to purchase residential
immovable property in India under the general
permission?
Ans. 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
along with a certified copy of the documentary evidence
for the transaction and bank certificate for the money
paid.
Q6. Can
such property be sold without the permission of Reserve
Bank?
Ans. 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.
Q7. Can
foreign citizens of Indian origin acquire or dispose
residential property by way of gift?
Ans. The
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.
Q8. Can
immoveable property held in India be transferred by way
of gift to in India?
Ans.
General permission has been granted by Reserve Bank to
non-resident persons (foreign citizen) of Indian Origin
to transfer, by way of gift, immoveable property held by
them in India to relatives and charitable trusts /
organisations subject to the condition that the
provisions of all other laws, as applicable are complied
with.
Q9. Can
NRIs obtain loans for acquisition of a house/flat for
residential purpose from financial institutions
providing housing finance?
Ans. The
Reserve Bank has granted general permission to certain
financial institutions providing housing finance e.g.
HDFC and authorised dealers to grant housing loans to
non-resident Indian nationals for acquisition of a
house/flat for self-occupation, subject to certain
conditions. Criteria regarding the purpose of the loan,
margin money and the quantum of loan will be at par with
those applicable to resident Indians. 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 investors' NRE/FCNR/NRO
accounts.
Q10. Can
Indian companies grant loans to their NRI staff?
Ans. The
Reserve Bank permits Indian firms to grant housing loans
to their employees deputed abroad and holding Indian
passport subject to certain conditions.
Q11. 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
Q12. The
NRI's are staying abroad can the property be purchased
through the agent or through the Power of Attorney?
Ans. The
NRI's who are staying abroad may enter into an agreement
through their relatives and/or by executing the Power of
Attorney in their favor as it is not possible for them
to be present for completing the formalities of purchase
(eg, 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.
Q13. Can
such residential property be given on rent if not
required for immediate residential use?
Ans. YES
Q14. 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.
