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FAQs

Who is a non Resident Indian (NRI)?

An Indian citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. organizations and officials deputed abroad by Central/ State Governments and Public Sector undertakings on temporary assignments are also treated as non-temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian origin are treated on par with non- resident Indian citizens (NRIs).

Who is a PIO?

A person of Indian origin means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who:
a) held an Indian Passport at any time, or
b) who or whose father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the
Citizenship Act, 1955

What are the various facilities available to NRIs/ OCBs?

NRIs/OCB's are granted the following facilities:
1. Maintenance of bank accounts in India
2. Investments in securities/shares of, and deposits with, Indian firms/companies
3. Investments in immovable properties in India

Who can purchase immovable property in India?

A.1 Under the general permission available, the following categories can freely purchase immovable property in India:
i) Non-Resident Indian (NRI) - that is a citizen of India resident outside India
ii) Person of Indian Origin (PIO) - that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
1. at any time, held an Indian passport
2. who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
The general permission, however, covers only purchase of residential and commercial property.

Can NRIs sell the properties they hold in India without Reserve Banks permission?

Yes.

Can NRI's/PIO's rent out the properties (residential/commercial) if not required for immediate use?

Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income is eligible for repatriation.

Can NRI’s acquire or dispose residential property by way of gift?

Yes, the Reserve Bank has granted general permission to NRIs to acquire or dispose of properties by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin (PIO) whether resident in India or not.

Can NRIs acquire commercial properties in India?

Yes, under the general permission granted by the Reserve Bank, property other than agricultural land/farm house/plantation property can be acquired by NRIs provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser's 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.

Can NRIs obtain loans for acquisition of a house/ flat for residential purpose from financial institutions providing housing finance?

The Reserve Bank has granted some general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to NRI nationals for acquisition of a NRI 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.

Can sale proceeds of immovable property be remitted out of India?

Yes! The sale proceeds of immovable property can be remitted out of India to the home country of the NRI or PIO, up to the maximum limit of the consideration amount originally remitted from abroad to purchase the property. However, the property has to be sold after a period of three years, from the date of the final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Additionally, the following points also need to be adhered to in this respect:
i. The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Laws in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999;
ii. The amount to be repatriated does not exceed: -
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(s) or -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(s) for acquisition of the property; and in case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
iii. Finally, an application for the purpose of repatriation is required to be made to the Central Office of Reserve Bank within 90 days of the sales of property in Form IPI 8.

Can an NRI give a Power of Attorney to a person in India for completion of loan formalities on their behalf?

Yes. NRIs can definitely appoint a Power of Attorney to complete all loan formalities towards the purchase of a property in India, considering the fact that an NRI wouldn't be in India for long periods of time. The stringent formalities followedby Indian banks, only means that the appointment of a Power of Attorney would be ideal.

Is there a limit to the number of investments an NRI can make in acquiring Residential/ Commercial properties in India?

The Reserve Bank of India has not fixed any restrictions on the purchase of Residential/Commercial properties for both Non Resident Indians (NRIs), as well as Foreign Citizens of Indian Origin (PIOs). However, the RBI has a restriction in the purchase of Agricultural Land/Plantation Property or Farmhouses in India.