1. 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. organizations 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. |
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2. Who
is a person of Indian Origin? |
For the
purposes of availing of the facilities of opening and maintenance of bank
accounts and investments in shares/securities in India. A foreign citizen
(other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian
origin, if, |
- he, at
any time, held an Indian passport, or |
- he or
either of his parents or any of his grand parents was citizen of India by
virtue of the Constitution of India or Citizenship Act, 1955 (57 of
1955). |
Note: A
spouse (not being a citizen of Pakistan or Bangladesh) of an Indian citizen
or of a person of Indian origin is also treated as a person of Indian origin
for the above purposes provided the bank accounts are opened or investments
in shares/securities in India are made by such persons only jointly with
their NRI spouses. |
For
investments in immovable properties. |
(A
foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan,
Bhutan, Sri Lanka, or Nepal), is deemed to be of Indian origin if, ) |
- he
held an Indian passport at any time, or |
- 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). |
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3. Do
non-resident Indian citizens require permission of Reserve Bank to acquire
residential/commercial property in India? |
No. |
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4. Do
foreign citizens of Indian origin require permission of Reserve Bank to
purchase immovable property in India for their residential use? |
Reserve
Bank 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 permission of Reserve Bank. |
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5. In
what manner the purchase consideration for the residential immovable property
should be paid by foreign citizens of Indian origin under the general
permission? |
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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6. 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? |
They
are required to file a declaration in form IPI 7 with the Central Office of
Reserve Bank at Mumbai within a period of 90 days from the date of purchase
of immovable property or final payment of purchase consideration along with a
certified copy of the document evidencing the transaction and bank
certificate regarding the consideration paid. |
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7. Can
such property be sold without the permission of Reserve Bank? |
Yes.
Reserve Bank 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. |
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8. Can
sale proceeds of such property if and when sold be remitted out of India? |
In
respect of residential properties purchased on or after 26th May 1993,
Reserve Bank considers applications for repatriation of sale proceeds up to
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 of
the owner of the property. |
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9. Are
any conditions required to be fulfilled if repatriation of sale proceeds is
desired? |
Applications
for repatriation of sale proceeds are considered provided the sale 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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10. What
is the procedure for seeking such repatriation? |
Applications
for necessary permission for remittance of sale proceeds should be made in
form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of
the sale of the property. |
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11. Can
foreign citizens of Indian origin acquire or dispose of residential property
by way of gift? |
Yes.
Reserve Bank has granted general permission to foreign citizens of Indian
origin to acquire or dispose of properties up to two houses 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, subject to compliance with
applicable tax laws. |
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12. Can
immovable property held in India, be transferred by way of gift to
relatives/registered charitable trusts/organizations in India? |
Yes.
General permission has been granted by Reserve Bank to non-resident persons
(foreign citizens) of Indian origin to transfer by way of gift immovable
property held by them in India to relatives and charitable
trusts/organizations subject to the condition that the provisions of any
other law, including Foreign Contribution (Regulation) Act, 1976, as
applicable, are duly complied with. |
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13. 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. |
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14. Can
they dispose of such properties? |
Yes. |
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15. Can
sale proceeds of such property be remitted out of India? |
Yes.
Repatriation of original investment in respect of properties purchased by
foreign citizens of Indian origin on or after 26th May 1993 will be allowed
to be remitted up to the consideration amount originally remitted from abroad
provided the property is sold after a period of three years from the date of
the 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 form IPI 8. |
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16. Can
the properties (residential/commercial) be given on rent if not required for
immediate use? |
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 are eligible for repatriation. |
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17. Can
NRIs obtain loans for acquisition of a house/flat for residential purpose
from authorized dealers/financial institutions providing housing finance? |
Reserve
Bank has granted general permission to certain financial institutions
providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., and
authorized dealers to grant housing loans to non-resident Indian nationals
for acquisition of a house/flat for self-occupation subject to certain
conditions. The purpose of the loan, margin money and the quantum of loan
will be at par with those applicable to housing loans to residents. Repayment
of loan should be made within a period not exceeding 15 years out of inward
remittances or out of funds held in the investors' NRE/FCNR/NRO accounts. |
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18. Can
Indian companies grant loans to their NRI staff? |
Reserve
Bank permits Indian firms/companies to grant housing loans to their employees
deputed abroad and holding Indian passports subject to certain conditions. |
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19. Can
authorized dealer grant housing loan to non-residents of Indian nationality
where he is a principal borrower with his resident close relative as a
co-obligant/guarantor or where the land is owned jointly by such NRI borrower
with his resident close relative? |
Yes.
However, in such cases the payment of margin money and repayment of the loan
installments should be made by the NRI borrower. |