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For NRI’s Interest

The Indian real estate sector has witnessed a revolution. It has emerged as one of the most appealing investment areas for domestic as well as foreign investors.

With the Indian Government liberalizing the foreign direct investment in real estate, host of investors have shown confidence in the enormous potential of the real estate market in India. Supported by infrastructure development, contemporary architecture and state-of-the art facilities in aesthetically designed environs, India’s real estate has much to offer to the NRIs.

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. organisations and officials deputed abroad by Central/State Governments and Public Sector undertakings on 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) for the purpose of certain facilities.

Do Non-Resident Indian nationals require permission of the Reserve Bank of India to acquire residential/commercial property in India?

No permission is required by non-resident Indian nationals to acquire immovable property in India.

Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?

Yes, foreign nationals of Indian origin, whether resident in India or abroad, have been granted general permission to purchase immovable property in India. However, this general permission is only available for the purchase of immovable property in India for their bonafide residential purpose.

What should be the method of payment for purchasing residential immovable property in India by foreign nationals of Indian origin under the general permission?

Yes. The Reserve Bank of India has granted general permission for sale of such 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.

Can such property be sold without the permission of the Reserve Bank of India?

Can foreign citizens of Indian origin acquire commercial properties in India?

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 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 the properties (residential/commercial) be given on rent if not required for immediate use?

Yes. The Reserve Bank of India 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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