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FAQ of Bhadra Landmarks

FAQ

Who is a Non Resident Indian (NRI)?

The Foreign Exchange Management Act (FEMA) of 1999 states that an Indian Citizen who stays abroad for employment/business or stays outside the country for an indefinite period of time is considered to be an NRI. Non-resident foreign citizens of Indian Origin are considered on par with non- resident Indian citizen (NRIs).

Who is a Person of Indian Origin (PIO)?

PIO is a person of Indian origin whose ancestors were born in India and he/she has an Indian ancestry but not an Indian citizenship. As per the FEMA of 1999, a person of Indian origin can avail bank accounts, invest in shares and securities in India.

Can an NRI/ PIO acquire immovable residential property in India?

An NRI/PIO can acquire a residential property in India by purchasing it or by a way of gift from an Indian, NRI/PIO or purchase it according to the RBI guide lines. As per the Provisions of Section 6(5) of the FEMA, 1999, NRI/PIO can even acquire residential property by way of inheritance from a person who is a resident of India.

Do NRIs/PIOs need to submit any documents with RBI when purchasing immovable residential property in India?

No.

Can an NRI transfer his residential property by way of sale?

Yes, to an Indian resident/ NRI / PIO.

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

Authorised dealers to grant housing loans to NRIs for acquiring a house/flat for personal use but subject to certain conditions as guidelines of Reserve Bank of India. The major financial institutions providing housing finance are HDFC, LIC Housing Finance Ltd. and many more.

Under the general permission, what are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India?

NRIs and PIOs are required to file a declaration in a form IPI 7 with the Central Office of Reserve Bank at Mumbai (within a period of 90 days) from the date of purchase of the property or final payment of the purchase.

Can an NRI give their residential property on rent if not required for immediate use?

Yes. The rental income or proceeds of any investment of such income are eligible for repatriation.

Can NRIs / PIOs repatriate outside India the sale proceeds of immovable property held in India?
  • When an NRI/PIO sells an immovable property other than agricultural land / farm house / plantation property, the authorised dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are followed:
    1. 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 these regulations
    2. 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
      The amount paid out of funds held in Foreign Currency Non-Resident Account
      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
    3. In the case of a residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
  • Repatriation outside India means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency.
  • In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India (as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account. NRI/PIO are also allowed by the authorised dealers to repatriate an amount up to $(US) 1 million per financial year out of the balance in the NRO account / sale proceeds of assets through purchase / the assets in India acquired by him through inheritance / legacy. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 in any financial year requires prior permission of the Reserve Bank.
  • A person referred to in sub-section (5) of Section 6 of the Foreign Exchange Management Act 3[3] [3], or his successor shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section.