|
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 UN 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).
A: For investments in immovable properties A foreign citizen (other than a
citizen of Pakistan, Bangladesh, Afghanistan, China, Iran, Bhutan, Sri Lanka,
or Nepal) is deemed to be of Indian origin if, (i) he held an Indian passport
at any time, or (ii) he or his father or paternal grand-father was a citizen of
India by virtue of the Constitution of India or the Citizenship Act, 1955 (57
of 1955).
Under the general permission available, the following categories can freely
purchase immovable property in India:
i) Non-Resident Indian (NRI)- that is a citizen of India resident outside India
ii) Person of Indian Origin (PIO)- that is an individual (not being a citizen
of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal
or Bhutan), who At any time, held Indian passport, or 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).
The general permission, however, covers only purchase of residential and
commercial property and not for purchase of agricultural land / plantation
property / farmhouse in India.
2.02 Whether NRI/PIO can acquire agricultural land/ plantation property / farm
house in India? No. Since general permission is not available to NRI/PIO to
acquire agricultural land/ plantation property / farm house in India, such
proposals will require specific approval of Reserve Bank and the proposals are
considered in consultation with the Government of India.
No. An NRI / PIO who has purchased residential / commercial property under
general permission, is not required to file any documents with the Reserve
Bank.
There are no restrictions on the number of residential / commercial properties
that can be purchased.
No.
No. A foreign national of non-Indian origin, resident outside India cannot
purchase any immovable property in India. But, he/she may take residential
accommodation on lease provided the period of lease does not exceed five years.
In such cases, there is no requirement of taking any permission of or reporting
to Reserve Bank
Yes, but the person concerned would have to obtain the approvals, and fulfill
the requirements if any, prescribed by other authorities, such as the concerned
State Government, etc However, a foreign national resident in India who is a
citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and
Bhutan would require prior approval of Reserve Bank. Such requests are
considered by Reserve Bank in consultation with the Government of India.
A foreign company which has established a Branch Office or other place of
business in India, in accordance with FERA / FEMA regulations, can acquire any
immovable property in India, which is necessary for or incidental to carrying
on such activity. The payment for acquiring such a property should be made by
way of foreign inward remittance through proper banking channel. A declaration
in form IPI should be filed with Reserve Bank within ninety days from the date
of acquiring the property. Such a property can also be mortgaged with an
Authorized Dealer as a security for other borrowings. On winding up of the
business, the sale proceeds of such property can be repatriated only with the
prior approval of Reserve Bank. Further, acquisition of immovable property by
entities who had set up Branch Offices in India and incorporated in Pakistan,
Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require
prior approval of Reserve Bank to acquire such immovable property. However, if
the foreign company has established a Liaison Office, it cannot acquire
immovable property. In such cases, Liaison Offices can take property by way of
lease not exceeding 5 years.
(a) Yes, NRIs and PIOs can freely acquire immovable property by way of gift
either from
i) a person resident in India or
ii) an NRI or
iii) a PIO.
However, the property can only be commercial or residential. Agricultural land
/ plantation property / farmhouse in India cannot be acquired by way of gift.
(b) A foreign national of non-Indian origin resident outside India cannot
acquire any immovable property in India through gift.
Yes, a person resident outside India i.e.
i) an NRI ii)
a PIO and
iii) a foreign national of non-Indian origin can inherit and hold immovable
property in India from a person who was resident in India. However, a citizen
of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan
should seek specific approval of Reserve Bank.
A person resident outside India (i.e. NRI or PIO or foreign national of
non-Indian origin) can inherit
2.12 immovable property from
(a) a person resident in India.
(b) a person resident outside India However, the person from whom the property
is inherited should have acquired the same in accordance with the foreign
exchange regulations applicable at that point of time.
An NRI can sell property in India to-
i) a person resident in India or
ii) an NRI or
iii) a PIO.
A PIO can sell property in India to
i) a person resident in India.
ii) An NRI or
iii) a PIO – with the prior approval of Reserve Bank
Foreign national of non-Indian origin including a citizen of Pakistan or
Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan can
sell property in India with prior approval of Reserve Bank to
i) a person resident in India
ii) an NRI
iii) a PIO
(a) NRI / PIO may sell agricultural land /plantation property/farm house to a
person resident in India who is a citizen of India.
(b) Foreign national of non-Indian origin resident outside India would need
prior approval of Reserve Bank to sell agricultural land/plantation property/
farm house in India
Yes.
(a) NRI / PIO may gift residential / commercial property to -
(i) person resident in India or
(ii) an NRI or
(iii) PIO.
(b) Foreign national of non-Indian origin needs prior approval of Reserve Bank.
(a) NRI / PIO can gift but only to a person resident in India who is a citizen
of India.
(b) Foreign national of non-Indian origin needs prior approval of Reserve Bank
i) NRI / PIO can mortgage to:
(a) an authorized dealer / housing finance
institution in India – without the approval of Reserve Bank.
(b) a party abroad - with prior approval of Reserve
Bank.
ii) a foreign national of non-Indian origin can mortgage only with prior
approval of Reserve Bank
iii) a foreign company which has established a Branch Office or other place of
business in accordance with FERA/FEMA regulations has general permission to
mortgage the property with an authorized dealer in India.
Payment can be made by NRI / PIO out of
(a) funds remitted to India through normal banking channel or
(b) funds held in NRE / FCNR (B) / NRO account maintained in India
No payment can be made either by traveler’s cheque or by foreign currency
notes.
No payment can be made outside India.
There are no restrictions on the number of residential / commercial properties
that can be purchased.
The amount of refund, together with interest (net of income tax) can be
credited to NRE account. This is subject to condition that the original payment
was made by way of inward remittance or by debit to NRE / FCNR (B) account.
(Please refer to A.P. (DIR) Series Circular No. 46 dated 12.11.2002)
Yes, such loans are subject to the terms and conditions as laid down in
Schedules 1 and 2 to Notification No. FEMA 5/2000-RB dated May 3, 2000 as
amended from time to time. However, banks cannot grant fresh loans or renew
existing loans in excess of Rupees 20 lakh against NRE and FCNR (B) deposits
either to the depositors or to third parties [cf. A.P. (DIR Series) Circular
No. 29 dated January 31, 2007].
Such loans can be repaid
(a) by way of inward remittance through normal banking channel or
(b) by debit to his NRE / FCNR (B) / NRO account or
(c) out of rental income from such property.
(d) by the borrower's close relatives, as defined in section 6 of the Companies
Act, 1956, through their account in India by crediting the borrower's loan
account.
(a). In case the amount has been received from inward remittance or debit to
NRE/FCNR(B)/NRO account for acquiring the property or for repayment of the
loan, the principal amount can be repatriated outside India.
For this purpose, repatriation outside India means the buying or drawing of
foreign exchange from an authorized 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
authorized dealer from which it can be converted in foreign currency
(b) 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 Authorized Dealers to repatriate an amount up
to USD 1 million per financial year out of the balance in the NRO account for
all bonafide purposes to the satisfaction of the authorised dealers, subject to
tax compliance.
Yes, NRI/PIO can avail of housing loan in rupees from an Authorised Dealer or
housing finance institution subject to certain terms and conditions. (Please
refer to Regulation 8 of Notification No. FEMA 4/2000-RB dated 3.5.2000 and
A.P. (DIR) Series Circular No. 95 dated April 26, 2003).
Such a loan can be repaid
(a) by way of inward remittance through normal banking channel or
(b) by debit to his NRE / FCNR (B) / NRO account or
(c) out of rental income from such property. (
d) by the borrower's close relatives, as defined in section 6 of the Companies
Act, 1956, through their account in India by crediting the borrower's loan
account.
Yes, subject
to certain terms and conditions (Please refer to Regulation 8A of Notification
5.3 No. FEMA 4/2000-RB dated May 3,
2000 and A.P. (DIR Series) Circular No.27 dated October 10, 2003).
NRI / PIO may repatriate the sale proceeds of
immovable property in India
(a) If the property was acquired out of foreign
exchange sources i.e. remitted through normal banking channels / by debit to
NRE / FCNR (B) account
The amount to be repatriated should not exceed the
amount paid for the property:
1. in foreign exchange received through normal
banking channel or
2. by debit to NRE account(foreign currency equivalent, as
on the date of payment) or debit to FCNR (B) account.
Repatriation of sale
proceeds of residential property purchased by NRI / PIO out of foreign exchange
is restricted to not more than two such properties.
Capital gains, if any, may
be credited to the NRO account from where the NRI/PIO may repatriate an amount
up to USD one million, per financial year, as discussed below.
(b) If the
property was acquired out of Rupee sources, NRI or PIO may remit an amount up
to USD one million, per financial year, out of the balances held in the NRO
account (inclusive of sale proceeds of assets acquired by way of inheritance or
settlement), for all the bonafide purposes to the satisfaction of the
Authorized Dealer bank and subject to tax compliance.
From the NRO account, NRI/PIO may repatriate up
to USD one million per financial year (April-March), which would also include
the sale proceeds of immovable property.
A: Yes.
Yes, sale proceeds of not more than two
residential properties can be repatriated.
The sale proceeds of immovable property acquired
by way of gift should be credited to NRO account only. From the balance in the
NRO account, NRI/PIO may remit up to USD one million,per financial year,
subject to the satisfaction of Authorised Dealer and payment of applicable
taxes.
Yes, general permission is available to the NRIs/PIO to repatriate the sale
proceeds of the immovable property inherited from a person resident in India.
NRIs/PIO may repatriate an amount not exceeding USD one million, per financial
year, on production of documentary evidence in support of acquisition /
inheritance of assets, an undertaking by the remitter and certificate by a
Chartered Accountant in the formats prescribed by the Central Board of Direct
Taxes vide their Circular No.10/2002 dated October 9, 2002. [cf. A. P. (DIR
Series) Circular No.56 dated November 26, 2002]. In case of a foreign national,
sale proceeds can also be repatriated even if the property is inherited from a
person resident outside India. But this is allowed only with prior approval of
Reserve Bank. The foreign national has to approach Reserve Bank with
documentary evidence in support of inheritance of the immovable property and
the undertaking and the C.A. Certificate as mentioned above. The general
permission for repatriation of sale proceeds of immovable property is not
available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan
and Iran and he has to seek specific approval of Reserve Bank.
As FEMA
specifically permits transactions only in Indian Rupees with citizens of Nepal
and Bhutan, the question of repatriation of the sale proceeds in foreign
exchange to Nepal and Bhutan would not arise.
Yes, Foreign Embassies / Diplomats / Consulate
Generals can purchase and sell any immovable property other than agricultural
land / plantation property / farm house in India with prior clearance from the
Government of India, Ministry of External Affairs. The payment should be made
by foreign inward remittance through normal banking channel.
Yes, NRI/PIO can rent out the property without the approval of the Reserve
Bank. Rent received can be credited to NRO / NRE account or remitted abroad.
Powers have been delegated to the Authorised Dealers to allow repatriation of
current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do
not maintain an NRO account in India based on an appropriate certification by a
Chartered Accountant, certifying that the amount proposed to be remitted is
eligible for remittance and that applicable taxes have been paid/provided
for.[cf. A.P. (DIR Series) Circular No. 45 dated May 14, 2002].
Yes, he can continue to hold the residential /
commercial property / agricultural land/ plantation property / farm house in
India without the approval of the Reserve Bank.
The sale proceeds may be credited to NRO account.
Yes, provided the amount to be remitted does not
exceed USD one million per financial year, for all bonafide purposes to the
satisfaction of Authorised Dealers and subject to tax compliance.
Yes, they may continue to hold the immovable
property. However, they can transfer the property only with the prior approval
of Reserve Bank.
A person resident in India who is a citizen of
Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or
Bhutan is governed by the provisions of Foreign Exchange Management
(Acquisition and Transfer of Immovable Property in India) Regulations, 2000 ie.
He would require prior approval of Reserve Bank for acquisition and transfer of
immovable property in India even though he is resident in India. Such requests
are considered by Reserve Bank in consultation with the Government in India
A.36. Section 2 (v) and Section 2 (w) of the
FEMA, 1999 defines `person resident in India' and a `person resident outside
India' respectively.
Under FEMA, a person resident in India is defined
as a person residing in India for more than one hundred and eighty-two days
during the course of the preceding financial year (April-March) and who has
come to or stays in India either for taking up employment, carrying on business
or vocation in India or for any other purpose, that would indicate his
intention to stay in India for an uncertain period. In other words, to be
treated as `a person resident in India' under FEMA, a person has not only to
satisfy the condition of the period of stay (being more than 182 days during
the course of the preceding financial year) but has also to comply with the
condition of the purpose / intention of stay.
The Act defines a 'a person resident outside
India' as a person who is not a person resident in India' (As defined in Q.No.
37 above)
Reserve Bank does not determine the residential status. Under FEMA, residential
status is determined by operation of law. The onus is on an individual to prove
his / her residential status, if questioned by any authority.
A foreign national resident in India does not
require approval from Reserve Bank from FEMA angle, but approvals if any
required in terms of regulations prescribed by other authorities such as the
concerned State Government etc. will have to be obtained by him / her. However,
a foreign national resident in India who is a citizen of Pakistan, Bangladesh,
Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan requires specific prior
approval of Reserve Bank
|
