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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.
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