Vital Information Revealed
- Non-resident Indians holding Indian passport do not require any permission from RBI for acquiring immovable property for bonafide residential purposes.
- Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of NRO/ NRE/ FCNR account.
- RBI has granted general permission to non-resident Indians holding foreign passport to acquire, hold, transfer or dispose off by way of sale or inheritance, immovable property situated in India provided:
- The property is for the purchaser's bonafide residential purpose
- The purchase consideration is met either by remittance of funds from abroad through normal banking channels or out of NRE/FCNR/ FCNR special deposit account.
- Foreign citizens of Indian origin are required to declare the properties to RBI within a period of 90 days from the date of purchase. The following documents must be submitted along with the declaration.
- A certified copy of the purchase deed or a certificate from the Co-operative Housing Society or an association of the apartment owners as an evidence of transfer / registration of the property in the declarant's name
- Certificate from the declarant's bank in India evidencing receipt of inward remittance(s) in foreign exchange through normal banking channel or withdrawal of funds from the declarant's NRE / FCNR / FCNR special deposit account and payment of consideration for the property out of those funds.
- If a Foreign Citizen of Indian origin wishes to acquire a property out of funds held in NRO Account, he will need to acquire a permission from RBI, to be applied for in Form IPI 1.
- If a foreign citizen of Indian origin wishes to acquire a property from the sale proceeds of another property, he will need to acquire a prior permission from RBI. The same may be obtained by applying in Form IPI 1.
- Under Section 29 of the Foreign Exchange Regulation Act 1973, the Reserve Bank of India has granted general permission to foreign citizens of Indian origin and Indian citizens residing outside India to let out their immovable properties (commercial / residential). The rental income or proceeds of any investments out of such income shall be legally allowed outside India subject to Income tax being paid.
Q. How should the foreign citizens of Indian origin pay purchase consideration for the residential immovable property under the general permission?
A. 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. Are there any formalities remitted in foreign exchange for the acquisition of up to 2 properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993, will have to be credited to the ordinary non-resident rupee account of the property owner.
Q. Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?
A. Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed/ date of payment of final installment of consideration amount, whichever is later.