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Q) Do non-resident Indian citizens require permission of Reserve to acquire residential/commercial properly in India?
A) No.
Q)
In what manner the purchase consideration for the residential immovable
property should be paid by foreign citizens of Indian origin under the
general permission?
A)
The purchase consideration should be met either out of inward
remittances in foreign exchange through normal banking channels or out
of funds from NTE/FCNR accounts maintained with banks in India.
Q)
Do foreign citizens of Indian origin require permission of Reserve Bank
to purchase immovable property in India for their residential use?
A)
Yes. However, 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 separate permission
of Reserve Bank.
Q)
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.?
A)
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.
Q) Can such property be sold without the permission of Reserve Bank?
A)
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.
Q) Can sale proceeds of such property if and when sold be remitted out of India?
A)
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.
Q) Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?
A)
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.
Q) What is the procedure for seeking such repatriation?
A)
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.
Q) Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?
A)
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,provided gift
tax has been paid.
Q) Can foreign citizens of Indian origin acquire commercial properties in India?
A)
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.
Q) Can they dispose of such properties?
A) Yes.
A) Yes.
Q) Can sale proceeds of such property be remitted out of India?
A)
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.
Q) Can the properties (residential/commercial) be given on rent if not required for immediate use?
A)
Yes. Reserve Bank has granted general permission for letting out of any
immovable property in India. The rental income or proceeds of any
investment of such income has to be credited to NRO account.
Q)
Can NRIs obtain loans for acquisition of a house/flat for residential
purpose from financial institutions providing housing finance?
A)
Reserve Bank has granted general permission to certain financial
institutions providing housing finance e.g. HDFC,LIC Housing Finance
Ltd.,etc. to grant housing loans to non-resident Indian nationals for
acquisition of houses/flats for self-occupation subject to certain
conditions.
Q) Can authorized dealer grant loans to NRIs for acquisition of a flat/house for residential purposes?
A)
Authorized dealers have been granted permission to grant loans up to
non-resident Indian nationals for acquisition of house/flat for
self-occupation on their return to India subject to certain conditions.
Repayment of the loan should be made within a period not exceeding 15
years out of inward remittance through banking channels or out of funds
held in the investments NRE/FCNR accounts.
Q) Can Indian companies grant loans to their NRI staff?
A)
Reserve Bank permits Indian firms/companies to grant housing loans to
their employees deputed abroad and holding Indian passport subject to
certain conditions.
Source: Reserve Bank of India
Q) What are the options available for obtaining guarantors while applying for a HDFC/LIC loan?
A)
One will need a guarantor for a loan mainly for collateral security.
The guarantor will have to demonstrate appropriate net worth to cover
for the loan. Usually one can have a guarantor in any city where the
loan issuer has a branch. Talk to loan issuers they will work something
out for NRIs and foreign banks.
Q) While purchasing real estate most developers demand a Power of Attorney in their favor, is there a way to avoid it?
A)
One can choose not to grant the Power of Attorney (POA) to the
developers. However this will mandate the mailing of all documents to
your foreign residence and associated time delays. A good compromise is
to grant the POA to the builder only for specific necessary items.
For further questions, please contact Nandanam Consultants at www.nandanamconsultants.in
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