Information for NRIs Regarding Buying Property in India
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WHO IS A NRI OR A PIO ?
A Non Resident Indian (NRI) is a person of Indian origin but not
residing in India.
Under the Income Tax Act to be assessed as a "resident", an individual
should fulfill either of the two conditions:
- He should have been present in India in the previous year for at
least 182 days. This period of 182 days need not be continuous.
- He should have been in India for at least 365 days in the
preceding four years and he stayed in India for not less than 60
days in the previous year in consideration.
All those persons who are not 'residents' are called 'Non
Residents'.
For the purpose of transfer of immovable property a Person of Indian
Origin (PIO) origin' means an individual (not being a citizen of
Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or
Nepal or Bhutan) who fulfils any of the conditions given below:
- He has held an Indian passport or;
- He or either of his parents or any of his grand-parents was a
citizen of India by virtue of the Constitution of India or the
Citizenship Act, 1955 (57 of 1955); or
- The person is a spouse of an Indian citizen or a person referred
to in sub-clause (a) or (b).
Rules relating to NRI / PIO investment in real estate have been
considerably liberalized and simplified. Foreign citizens of Indian
origin (PIOs) have been permitted to invest without the need to obtain
approval from the Reserve Bank of India. With the passage of FEMA, the
power to effect repatriation proceeds has been decentralized and
delegated to authorized foreign exchange dealers. What is more, even the
rental income can be repatriated now. It makes sense for NRIs now to
earmark a portion of their investment portfolio in real estate and earn
competitive return on investment.
In exercise of the powers conferred by clause (i) of sub-section (3) of
Section 6, subsection.
OVERSEAS CORPORATE BODY (OCB)
Overseas corporate body means
- Companies, partnership firms, societies and other corporate
bodies
- Owned, directly or indirectly,
- To the extent of at least 60% by individuals of Indian
nationality or origin resident outside India as also overseas trusts
in which at least 60% of the beneficial interest is irrevocably held
by such persons.
The various facilities granted to NRIs are also available, with
certain exceptions, to OCBs so long as the ownership/beneficial interest
held in them by persons of Indian nationality/origin resident outside
India continues to be at or above the level of 60%
FOREIGN DIRECT INVESTMENT IN REAL ESTATE
FDI provides for 100% foreign participation by NRI/OCB's in housing
and real estate development sector in following areas:
- Development of serviced plots and construction of residential
premises
- Construction of residential and business premises including
business centres and offices
- Development of townships
- City and urban infrastructure facilities
- Manufacture of building material
- Participatory ventures in all of the above
- Investment in housing finance institutions
ACQUISITION OF PROPERTY IN INDIA BY AN NRI:
A person resident outside India who is a citizen of India may
- acquire any immovable property in India other than
agricultural/plantation/farm house.
TRANSFER OF PROPERTY IN INDIA BY AN NRI:
A person resident outside India who is a citizen of India may -
- Transfer any immovable property in India to a person resident in
India.
- Transfer any immovable property other than agricultural or
plantation property or farmhouse to a person resident outside India
who is a citizen of India or to a person of Indian origin resident
outside India.
ACQUISITION OF PROPERTY IN INDIA BY A PERSON OF INDIAN ORIGIN
A person of Indian origin resident outside India may -
- Acquire any immovable property other than agricultural land/farm
house/ plantation property in India by purchase, from out of
- Funds received in India by way of inward remittance from any
place outside India or
- Funds held in any non-resident account maintained in
accordance with the provisions of the Act and the regulations
made by the Reserve Bank under the Act.
- Acquire any immovable property in India other than agricultural
land / farm house /plantation property by way of gift from a person
resident in India or from a person resident outside India who is a
citizen of India or from a person of Indian origin resident outside
India
- Acquire any immovable property in India by way of inheritance
from a person resident outside India who had acquired such property
in accordance with the provisions of the foreign exchange law in
force at the time of acquisition by him or the provisions of these
Regulations or from a person resident in India
- It is necessary for a PIO to purchase property through NRE or
NRO accounts.
TRANSFER OF PROPERTY IN INDIA BY A PERSON OF INDIAN ORIGIN
A person of Indian origin resident outside India may -
- Transfer any immovable property in India other than agricultural
land/farm house/plantation property, by way of sale to a person
resident in India
- Transfer agricultural land/farm house/ plantation property in
India, by way of gift or sale to a person resident in India who is a
citizen of India
- Transfer residential or commercial property in India by way of
gift to a person resident in India or to a person resident outside
India who is a citizen of India or to a person of Indian Origin
resident outside India.
- Transfer an immovable property being agricultural land or
plantation property or farmhouse in India by way of a gift or sale
to a person resident in India without any permission from the RBI
provided that the purchaser is a resident as well as a citizen of
India.
ACQUISITION OF IMMOVABLE PROPERTY FOR CARRYING ON A PERMITTED
ACTIVITY:-
A person resident outside India who has established in India in
accordance with the Foreign Exchange Management (Establishment in India
of Branch or Office or other Place of Business) Regulations, 2000, a
branch, office or other place of business for carrying on in India any
activity, excluding a liaison office, may -
- Acquire any immovable property in India, which is necessary for
or incidental to carrying on such activity; Provided that
- all applicable laws, rules, regulations or directions for
the time being in force are duly complied with; and
- the person files with the Reserve Bank a declaration in the
form IPI annexed to these regulations, not later than ninety
days from the date of such acquisition
- Transfer by way of mortgage to an authorised dealer as a
security for any borrowing, the immovable property acquired in
pursuance of clause (a).
REPATRIATION OF SALE PROCEEDS:-
- A person referred to in sub-section (5) of Section 6 of the Act,
or his successor shall not, except with the prior permission of the
Reserve Bank, repatriate outside India the sale proceeds of any
immovable property referred to in that sub-section
- In the event of sale of immovable property other than
agricultural land/farm house/plantation property in India by a
person resident outside India who is a citizen of India (NRI) or a
person of Indian origin (PIO), the authorised dealer may allow
repatriation of the sale proceeds outside India, provided the
following conditions are satisfied, namely
- The immovable property was acquired by the seller in
accordance with the provisions of the foreign exchange law in
force at the time of acquisition by him or the provisions of
these Regulations
- The amount to be repatriated does not exceed
- The amount paid for acquisition of the immovable
property in foreign exchange received through normal banking
channels or out of funds held in Foreign Currency
Non-Resident Account or
- The foreign currency equivalent ,as on the date of
payment, of the amount paid where such payment was made from
the funds held in Non-Resident External account for
acquisition of the property.
- In the case of residential property, the repatriation of sale
proceeds is restricted to not more than two such properties.
- In the case of the sale of an immovable property, other than an
agricultural land/farm house/ plantation property in India by an NRI
or PIO, repatriation of the sale proceeds outside India (including
credit to RFC, NRE or FCNR Accounts), is allowed.
- Sale proceeds of any immovable property inherited by NRI/PIO
from a person resident in India may be remitted abroad but the
amount not to exceed USD one million, per calendar year subject to
production of documentary evidence in support of inheritance and Tax
clearance certificate/no objection certificate from Income Tax
authority to authorized dealer for remittances.
- The RBI has also now permitted authorized dealers to allow the
facility of repatriation of funds by NRI/PIO in their Non-resident
Ordinary Rupee (NRO) Account up to US $ 1,00,000 per year
representing the sale proceeds of the immovable property held by
them for a period of not less than 10 years subject to payment of
the applicable taxes.
Prohibition on acquisition or transfer of immovable property in India
by citizens of certain countries.
No person being a citizen of Pakistan, Bangladesh, Sri Lanka,
Afghanistan, China, Iran, Nepal or Bhutan without prior permission of
the Reserve Bank shall acquire or transfer immovable property in India,
other than lease, not exceeding five years.
GENERAL INFORMATION REGARDING REAL ESTATE:
- NRIs and PIOs may acquire any immovable property for
residential/commercial purposes in India, other than
agricultural/plantation/farm house, without the permission of
Reserve Bank of India.
- No declaration is required to be made to the RBI. Only
information regarding details of the property and costs incurred
should be given to the RBI. This will help at the time of
repatriation.
- No permission from the RBI is required to transfer any immovable
property other than the agricultural land or plantation property or
a farm house in India by way of sale to a person resident in India.
- The lock-in period of 3 years has been done away with.
- If property has been acquired through NRE account then
repatriation is allowed only for 2 residential properties.
- NRI/PIO is permitted to transfer by way of mortgage his
residential commercial property in India to an authorized
dealer/housing finance institution in India.
- NRI/PIO can avail housing loan in rupees from an authorized
dealer or housing finance institution in India approved by the
National Housing Finance Bank for purchase of residential
accommodation or for the purpose of repairs/renovation/improvement
of residential accommodation, subject to certain terms and
conditions.
- Sale proceeds of residential/commercial property received by way
of gift by NRI/PIO can only be credited to NRO account.
- Sale proceeds of any immovable property in India inherited, by a
person resident outside India (i.e. NRI or PIO or foreign national
of non-Indian origin resident outside India), from a person resident
outside India cannot be repatriated by him or his successor without
prior permission of the RBI.
- NRI/PIO can rent out the residential/commercial property
purchased out of foreign exchange/rupee funds.
- 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.
- The non-resident Indians who are staying abroad may enter into
an agreement through their relatives and/or by executing the Power
of Attorney in their favour as it is not possible for them to be
present for completing the formalities of purchase (negotiating with
the builder or Developer, drafting and signing of agreements, taking
possession, etc.) These formalities can be completed through some
known person who can be given the Power of Attorney for this
purpose. Power of Attorney should be executed on the stamp paper
before the proper authorities in foreign countries. Power of
Attorney cannot be drafted on the stamp paper bought in India.
- Residential property can be given on rent if not required for
immediate residential use. Rental income cannot be remitted abroad
and will have to be credited to the ordinary non-resident rupee
account of the owner of the property.
TAX RULES
- No taxes to be paid while purchasing property.
- Certain taxes to be paid when selling property. If NRI/PIO has
held property for less than 3 years then he would have to pay 30%
tax. If property has been held for more than 3 years then tax
payable is 20%. Tax is payable on rental income too.
- At the time of renting out property or repatriation PAN card is
required.
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Foreign
Exchange Management Act
Sale, Purchase, etc., of Immovable Property
in India
Introduction
Aug 14, 2002
The Foreign Exchange Management Act, 1999 (FEMA),
came in force with effect from June 1, 2000. Section 6(3)(i) of the Act
empowers the Reserve Bank to frame regulations to prohibit, restrict or
regulate the acquisition or transfer of immovable property in India by
certain persons mainly residents outside India. The restrictions under this
clause are not applicable to a lease of immovable property for a period
not exceeding five years. The regulations made by the Reserve Bank are
called Foreign Exchange Management (Acquisition and Transfer of Immovable
property in India) Regulations, 2000, and have been notified vide
Notification FEMA No.21/2000-RB of May 3,2000. Full text of the Notification
is available on the Bank's website
www.fema.rbi.org.in. Synopsis of the said Regulations is as under:
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All persons, whether resident in India or
outside India, who are citizens of Pakistan, Bangladesh, Sri Lanka,
Afghanistan, China, Iran, Nepal or Bhutan, require prior permission
of Reserve Bank for acquiring or transferring any immovable property in
India.
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A person resident outside India, who has
been permitted by Reserve Bank to establish a branch, or office, or
place of business in India( excluding a Laison Office), has general
permission of Reserve Bank to acquire immovable property in India ,
which is necessary for, or incidental to, the activity. However, in such
cases a declaration ,in prescribed form (IPI), is required to be filed
with the Reserve Bank, within 90 days of the acquisition of immovable
property.
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An Indian citizen resident outside India
does not require any permission to acquire any immovable property in
India other than agricultural/ plantation property or a farm
house.
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An Indian citizen resident outside India
does not require any permission to transfer any immovable property, to a
citizen of India who is resident in India.
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An Indian citizen resident outside India
does not require any permission to transfer any immovable property
other than agricultural or plantation property or farm house, to a
person who :-
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is a citizen of India resident outside
India , or
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is a person of Indian origin resident
outside India.
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A person of Indian origin resident
outside India does not require any permission to acquire any
immovable property other than agricultural land/farm
house/plantation property in India by purchase, from out of
funds:
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received in India by way of inward
remittance through banking channel from any place outside India, or
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held in any non-resident account
maintained in accordance with the provisions of the Act and the
regulations made by the Reserve Bank under the Act.
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A person of Indian origin resident
outside India does not require any permission to acquire any
immovable property in India other than agricultural land/farm
house/plantation property by way of gift from a person resident
in India or from a person resident outside India who is a citizen of
India or from a person of Indian origin resident outside India.
-
A person of Indian origin resident
outside India does not require any permission to acquire any
immovable property in India by way of inheritance from a person
resident outside India who had acquired such property in accordance with
the provisions of the foreign exchange law in force at the time of
acquisition by him or the provisions of these Regulations or from a
person resident in India.
-
A person of Indian origin resident
outside India does not require any permission to transfer any
immovable property in India other than agricultural land/farm
house/plantation property, by way of sale to a person resident in
India.
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A person of Indian origin resident
outside India does not require any permission to transfer
agricultural land/farm house/plantation property in India, by way of
gift or sale to a person resident in India who is a citizen of India.
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A person of Indian origin resident
outside India does not require any permission to transfer
residential or commercial property in India by way of gift to a person
resident in India or to a person resident outside India who is a citizen
of India or to a person of Indian Origin resident outside India.
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Repatriation outside India , including
credit to RFC, NRE or FCNR account, of sale proceeds of any immovable
property situated in India, requires prior permission of the Reserve
Bank except in circumstances stated in paragraph 13 below.
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In the event of sale of immovable property
other than agricultural land/farm house/plantation property in
India by a person resident outside India, who is a citizen of India,
or a person of Indian origin, the authorised dealer may allow
repatriation of the sale proceeds outside India, provided all the
following conditions are satisfied :-
-
the immovable property was acquired by
the seller in accordance with the provisions of the Exchange Control
Rules /Regulations/Law in force at the time of acquisition, or the
provisions of the Regulations framed under the Foreign Exchange
Management Act,1999;
-
the sale takes place after three years
from the date of acquisition of such immovable property or from the
date of payment of final instalment of consideration for its
acquisition, whichever is later;
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the amount to be repatriated does not
exceed (a) the amount paid for acquisition of the immovable property
in foreign exchange received through normal banking channels or out
of funds held in foreign currency non-resident account or (b) the
foreign currency equivalent, as on the date of payment, of the
amount paid where such payment was made from the funds held in
non-resident external account for acquisition of the property; and
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in the case of residential property, the
repatriation of sale proceeds is restricted to not more than two
such properties.
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Authorised Dealers have been permitted to
allow the facility of repatriation of funds by NRIs/PIOs in their
Non-Resident Ordinary Rupee (NRO) account upto US$ 100,000/- per year
representing sale proceeds of immovable property held by them for a
period of not less than 10 years subject to payment of applicable taxes.
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All requests for acquisition of agricultural
land/plantation property/ farm house by any person resident outside
India or foreign nationals may be made to The Chief General Manager,
Reserve Bank of India, Central Office, Exchange Control Department,
Foreign Investment Division (III), Mumbai 400 001.
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The NRIs/ PIOs can freely rent out their
immovable property in India without seeking any permission from the
Reserve Bank. The rental income being a current account transaction is
freely repatriable outside India.
Notes:
A. For the purposes of transactions,
i.e., transfer, sale, purchase, etc., dealing with immovable property in
India, a person of Indian origin is defined as under:
" an individual (not being a citizen
of Pakistan or Bangladesh 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 whose
grandfather was a citizen of India by virtue of the Constitution
of India or the Citizenship Act, 1955 (57 of 1955). "
NRI FAQ (Frequently Asked Question in case of investment in India) Click Here
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Original
Booking
Plots, Floors
Plot Size : 200, 250, 300, 400, 500 sq. yds.
Location : Near Mahindra Sez, Ajmer Road, Jaipur
For more details Click here |
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Original
Booking Villa
Vatika Ivy Homes
2 br Villa in 157 and 185 sq yds plot.
Location : Vatika City, Jaipur
For more details Click here |
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Booking Amount : 15%
Loan : 85%
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