| Q.1. |
Do
the non-resident Indians require permission from the Reserve Bank of India
for the purchase of immovable property in India? |
| Ans |
The non-resident Indians
can be broadly divided into two parts. Non-residents who are Indian
citizens and Non-residents of Indian origin holding foreign passports.
Non-residents who are Indian citizens do not require any permission from
the Reserve Bank of India for the purchase of immovable property in India
provided the purchase considerations are settled in the manner which does
not violate foreign exchange regulations in India. Non -residents
of Indian origin holding foreign passports require prior permission of
the Reserve Bank of India.
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| Q.2. |
What
precautions should be taken even before purchasing a flat in India? |
| Ans |
It was found that on
the basis of advertisements issued in the newspapers or on the basis of
brochures issued by the builders and developers copies of which are sent
abroad, non-resident Indians used to purchase immovable property or flats.
Subsequently, it was found that the builders didn't have a marketable title
to the property.
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INVESTMENT
IN IMMOVABLE PROPERTY (GUIDELINES BY RESERVE BANK OF INDIA) |
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| Q.1. |
Do
non-resident Indian citizens require permission of Reserve bank to acquire
residential/commercial property in India? |
| Ans |
No
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| Q.2. |
Do
foreign citizens of Indian origin require permission of 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 RBI.
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| Q.3. |
In
what manner the purchase consideration for the residential Immovable property
should be paid by foreign citizens of Indian origin under the general permission? |
| Ans |
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.
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| Q.4. |
What
are the formalities required to be completed by foreign citizens of Indian
origin for purchasing residential immovable property in India under the
general permission? |
| Ans |
They are required to
file a declaration in the prescribed form with the Central Office of Reserve
Bank at Bombay within a period of 90 days from the date of purchase of
immovable property or final payment of purchase consideration.
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| Q.5. |
Can
such property be sold without the permission of the RBI? |
| Ans |
Yes. RBI has granted
general permission for the sale o fsuch 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.
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| Q.6. |
Can
sale proceeds of such property if and when sold are remitted out of India? |
| Ans |
In respect of residential
properties purchased on or after 26th May 1993, the RBI considers applications
for repatriation of sale proceeds upto the consideration amount remitted
in foreign exchange for the acquisition of the property for two such 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 (NRO account) of the owner of
the property.
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| Q.7. |
Are
any Conditions required to be fulfilled it repatriation of sale proceeds
is desired? |
| Ans |
Applications for repatriation
of sale proceeds are considered to provide the sales takes place after
three years from the date of final purchase deed or from the date of payment
of final installment of consideration amount, whichever is later.
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| Q.8. |
What
is the procedure for seeking such repatriation? |
| Ans |
Applications for necessary
permission for remittance of sale proceeds should be made in the prescribed
form to the Central Office of Reserve Bank at Bombay within 90 days of
the sale of the property.
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| Q.9. |
Can
foreign citizens of Indian origin acquire or dispose of residential property
by way of gift? |
| Ans |
Yes. Under the
general permission granted by Reserve Bank properties upto two houses can
be acquired, transferred or disposed of 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.
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| Q.10. |
Can
foreign citizens of Indian origin acquire commercial properties in India? |
| Ans |
Yes. Under
the general permission granted by Reserve Bank properties other than agricultural
land/farm house/ plantation property can be acquired by foreign citizens
of Indian origin provided the purchase consideration is met either out
of inward remittances in foreign exchange through normal banking channels
or out of funds from the purchasers NRE/FCNR accounts which maintained
with banks in India and a declaration is submitted to the Central office
of Reserve Bank in the prescribed form within a period of ninety days from
the date of purchase of the properties / final payment of purchase consideration.
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| Q.11. |
Can
they dispose of such properties? |
| Ans |
Yes
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| Q.12. |
Can
sale proceeds of such property sold would be permitted to be remitted out
of India? |
| Ans |
Yes. Repatriation
of Original investments in respect of properties purchased on or after
the 26th May 1993 will be allowed to be remitted upto the consideration
amount originally remitted from abroad provided the property is sold after
a period of three years from the date of ten final purchase deed or from
the date of payment of final installment of consideration amount, whichever
is later. Applications for the purpose are required to be made to
the Central Office of Reserve Bank within 90 days of the sale of property
in the prescribed form.
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| Q.13. |
Can
the properties (residential/commercial) be given or rent if not required
for immediate use? |
| Ans |
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
has to be credited to NRO account.
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