NON RESIDENT INDIAN OR PERSON OF INDIAN ORIGIN.

Q. Where can one find regulations / directions issued by Reserve Bank for acquisition and transfer of immovable property in India by a person resident outside India ?
A. Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India have been notified vide RBI Notification No.FEMA 21/2000-RB dated May 3, 2000 as amended by Notification No.FEMA 64/2002-RB dated June 29, 2002, Notification No.FEMA 65/2002-RB dated June 29, 2002 and Notification No.FEMA 93/2003-RB dated June 6, 2003 and relevant directions issued in the form of A.P. (DIR Series) Circulars.
These are available on RBI website: www.fema.rbi.org.in.

Q. Under the extent foreign exchange regulations to whom is general permission available for purchase of immovable property in India ?

A. General permission is available to purchase only a residential / commercial property in India to a person resident outside India who is a citizen of India (NRI) or who is a person of Indian origin (PIO).

Q. Who is a Person of Indian Origin (PIO)?
A. For the purpose of acquisition and transfer of immovable property in India, a PIO means an individual (not being a citizen of Pakistan or Bangaladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (i) at any time, held Indian passport, or (ii) 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).

Q. Is NRI / PIO who has purchased residential / commercial property under general permission required to file any documents with Reserve Bank of India?
A. NRI / PIO who has purchased residential / commercial property under general permission is not required to file any documents with the Reserve Bank.

Q. Is there any restriction on the number of residential / commercial properties that NRI / PIO can purchase under the general permission available ?
A. There is no restriction on the number of residential / commercial properties that NRI / PIO can purchase under the general permission available.

Q. Can a person resident outside India (i.e,. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land / plantation property / farm house in India by way of purchase ?
A. No. A person resident outside India cannot acquire by way of purchase agricultural land / plantation property / farm house in India.

Q. Under the general permission available what is the mode of payment for purchase of residential / commercial property in India by NRI / PIO ?
A. Under the general permission available NRI / PIO may purchase residential / commercial property in India out of funds remitted to India through normal banking channel or funds held in his NRE / FCNR (B) / NRO account. No consideration shall be paid outside India.

Q. Can refund of application / earnest money / purchase consideration made by the house building agencies / seller on account of non-allotment of flat / plot / cancellation of bookings / deals for purchase of residential / commercial property together with interest, if any (net of income tax payable thereon) be credited to NRE account ?
A. Yes, provided original payment was made by way of inward remittance or by debit to NRE / FCNR (B) account. For this purpose no permission of Reserve Bank is required and they may approach the authorised dealer directly in the matter. (Please refer to A.P. (DIR Series) Circular No.46 dated November 12, 2002.

Q. Can NRI / PIO for the purpose of acquisition of flat / house in India for his own residential use avail of loan from an authorised dealer against the security of funds held in his NRE Fixed Deposit account / FCNR (B) account?
A. Yes, subject to certain terms and conditions (Please refer to Schedules 1 and Schedules 2 to Notification No.FEMA 5/2000-RBI dated May 3, 2000).

Q. Can NRI / PIO, avail of housing loan in rupees from an authorised dealer or housing finance institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation ?
A. Yes, subject to certain terms and conditions. Such loans can be repaid by the borrower by way of inward remittance through normal banking channel or by debit to his NRE / FCNR (B) / NRO account or out of rental income derived from renting out such property. Such loan can also be repaid by the borrower's close relatives through their account in India by crediting the borrower's loan account (Please refer to Regulation 8 of Notification No.FEMA 4/2000-RB dated May 3, 2000 and A.P. (DIR. Series) Circular No.95 dated April 20, 2003 and A.P. (DIR Series) Circular No.94 dated May 25, 2003).

Q. Can NRI / PIO repatriate the sale proceeds of residential / commercial property in India acquired by way of inward remittance through normal banking channel or by debit to NRE / FCNR (B) account ? If so, what is the quantum ?
A. NRI / PIO may repatriate the sale proceeds of residential / commercial property in India acquired by way of inward remittance through normal banking channel or by debit to NRE /FCNR (B) account. The amount to be repatriated should not exceed the amount paid for acquisition of residential / commercial property (a) in foreign exchange received through normal banking channel or by debit to FCNR (B) account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid by debit to NRE account.
From out of balances in NRO A/c. he may remit upto USD one million per calendar year, eligible balances including the sale proceeds of immovable property if such property has been sold after being held for 10 years. If such a property was held for less than 10 years, remittance can be made if the sale proceeds were held for the balance period in NRO A/c. (Savings / Term Deposit) or any other eligible investment, provided, such investment is traced to the sale proceeds of the immovable property. (For details please refer Reg.4(3) of FEMA 13 dated May 3, 2000 as amended)

Q. Is there any restriction on number of residential properties in respect of which sale proceeds can be repatriated by NRI / PIO ?
A. Yes. Repatriation of sale proceeds is restricted to not more than two residential properties.

For latest information, please visit: www.fema.rbi.org.in