About Us Current Projects Legal Aspects NRI Guide Customization Maintenance
Land Owners Financial Aspects Design & Build Testimonials Careers What's New!
     
             
      BUYING A HOME - NRI GUIDE      
             
     
   FEMA  
All investments in immovable properties by overseas individual are governed by FEMA Act. The rules and laws for investments are governed by the circular issued by the Reserve Bank of India on the 1st of July every year with a sunset clause of one year and would stand withdrawn on 30th June every year.
  Non Resident Indian (NRI ) BACK TO TOPTop
Non Resident Indians has been defined as a person resident outside India who is a citizen of India in terms of Regulation 2 Fema Notification No.13 dated May 3, 2000 NRI means a person resident outside India who is a citizen of India.

  Person Resident in India BACK TO TOPTop
Person of Indian origin means a citizen of any country other than Bangladesh or Pakistan , Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan if -
  1. At any time held Indian passport or
  2. Either of his parents or any of his grand parents was a citizen of Indian by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
 
  Acquisition of Immovable Property by NRIs/PIOs BACK TO TOPTop
Under the general permission to NRIs/PIOs holding foreign passport, the Reserve Bank of India has allowed them to acquire, hold, transfer or dispose off by way of sale or inheritance, immovable properties situated in India.

NRIs/PIOs who have purchased residential/commercial properties under the general permission are not required to file any documents with the Reserve Bank of India.

Consequent on the liberalisation in Exchange Control policy and procedures, the government has brought about major legislative and policy changes to encourage NRI investments in real estate. As per the liberalised policy, transactions permitted without permission of Reserve Bank of India are tabulated hereunder.

Acquisition

NRI
Type of Property Acquired from
Any immovable property other than agricultural land or plantation or farm house Anyone including those residents outside India

PIO
Type of Property Acquired from Mode Condition
Any immovable property other than agricultural land or plantation or farm house Anyone Purchase To be met out of funds received in India by inward remittance by normal banking channels or by Debit NRE/FCNR (b)/NRO Account
Any immovable property other than agricultural land or plantation or farm house NRI / PIO / Resident from India Gift -
Any immovable property other than agricultural land or plantation or farm house NRI / Resident from India Inheritance The property was acquired in accordance with the foreign exchange laws at the time of acquisition or from a resident in India

  Sales / Transfer of immovable property by NRIs / PIOs BACK TO TOPTop
As per the liberalised policy, transactions permitted without permission of Reserve Bank of India are tabulated hereunder.

NRI
Type of Property Mode Transferred to
Any property Sale/Transfer/Gift Resident in India
Any property other than agricultural land/plantation/farmhouse Sale/Transfer/Gift NR I / PIO
Any immovable property other than agricultural land or plantation or farm house Inheritance The property was acquired in accordance with the foreign exchange laws at the time of acquisition or from a resident in India

PIO
Type of Property Mode Transferred to
Any property other than agricultural land / plantation/farmhouse Sale Resident in India
Agricultural land / farmhouse /
plantation property in India
Gift / Sale Resident in India who is a citizen of India
Any residential / commercial property in India Gift NRI / PIO or Resident


Permission to let out Immovable Property
The Reserve Bank of India has also granted general permission to Non-Resident Indian citizens and foreign citizens of Indian origin, to let out their residential properties acquired for their bonafide residential purpose but which on account of their residence abroad, are not required for their immediate residential purpose. The rental income being the current account transaction is freely repatriable outside India

Remittance of Assets and Repatriation
Remittance of Assets. Upto USD 1 million per calendar year is permitted to be remitted out of the following assets by NRIs / PIOs / foreign nationals including retired , employed and Non resident widows of Indian citizens on production of an undertaking cum certificate in the format prescribed by CBDT (Circular 10 of 2002 dated 9.10.2002).

  Repatriation of sale proceeds of immovable property BACK TO TOPTop
  1. Immovable property acquired by way of purchase
    1. A person referred to in sub-section (5) of Section 6 of the Foreign Exchange Management Act 3, 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.
    2. 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 the following conditions are satisfied, namely:
      1. 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;
      2. the amount to be repatriated does not exceed
        1. The amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels,
        2. The amount paid out of funds held in Foreign Currency Non-Resident Account, or
        3. 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
        4. Such repatriation is restricted to two properties

  2. Immovable property acquired by way of inheritance/ legacy/ out of Rupee funds

A Non-Resident Indian (NRI) / Person of Indian Origin (PIO) may remit an amount, not exceeding US $ 1,000,000 (US Dollar One million only) per financial year out of the balances held in NRO accounts / sale proceeds of assets by way of purchase / the assets in India acquired by him by way of inheritance / legacy/ out of Rupee funds. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 (US Dollar One million only) in any financial year requires prior permission of the Reserve Bank.

Refund of application/earnest money/purchase consideration made by the house building agencies /seller on account of non-allotment of flat / plot /cancellation of bookings / deals for purchase of residential / commercial property, together with interest, if any (net of income tax payable thereon) may be allowed by the Authorised Dealers by way of credit to NRE/FCNR (B) account, provided the original payment was made out of NRE / FCNR (B) account of the account holder or remittance from outside India through normal banking channels and the Authorised Dealer is satisfied about the bonafides of the transaction.

  Disclaimer BACK TO TOPTop
Every effort has been made to avoid errors or omissions. Please inform us of any mistake, error or discrepancy. Being matters of vital importance, the reader is requested to cross-check all material at this website with original Government publications or notifications. Please seek professional advice before acting on any information contained herein. The responsibility for obtaining clearances and permissions from the Reserve Bank of India and / or other statutory authority with respect to the provisions of the above mentioned Act or any other applicable laws rests with you. Southern Investments Pvt. Ltd., expressly disclaim liability to any person, in respect of anything or the consequences of anything done or omitted to be done by any person on the basis of the contents of this website.
BACK TO TOP