A. 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.
A. 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: An Indian Citizen who stays abroad for employment, business or vocation outside India or stays abroad indicating judicial and legal intention for an uncertain duration is a non-resident Indian.
A: A (PIO) person of Indian 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 (i) at any time, held Indian passport; or (ii) 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) or whose ancestors were Indian nationals at least four generations back.
A. An Overseas Citizen of India (OCI) is Indian born person (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who is staying abroad for employment, business or vocation and having the respective country’s citizenship. He may have dual citizenship of India as well as country he is living.
A: Overseas Corporate Bodies (OCB) are bodies predominantly owned directly or indirectly and not as nominees by individuals of Indian nationality or origin resident outside India and include overseas companies, partnership firms, societies, trusts and other corporate bodies, to the extent of at least 60% and/or at least 60% of the beneficial interest.
The various facilities granted to NRIs are also available with certain exceptions to OCBs as long as the ownership/beneficial interest held in them by NRIs continue to be at least 60 percentage.
A: Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India has been notified vide RBI Notification No. FEMA 21/2000-RB dated May 3, 2000 as amended vide Notification No. FEMA 64/2002-RB dated June 29, 2002 and Notification No. FEMA 65/2002-RB dated June 29, 2002 and relevant directions issued in the form of A.P. (DIR Series) Circulars. These are available on RBI website: www.fema.rbi.org.in
You ca also approach the following person
Chief General Manager-in-Charge, Foreign Exchange Department Foreign Investment Division, Reserve Bank of India, Central Office Mumbai- 400 001.
A: General permission is available to purchase only a residential/commercial property and not agricultural land in India to a person resident outside India who is a citizen of India (NRI), who is a Person of Indian Origin (PIO) and OCB Overseas Corporate Bodies as explained above. Investments by NRIs and OCBs are allowed, both, through the RBI route and also through the Government route, i.e., through the Foreign Investment Promotion Board (FIPB). NRIs and OCBs are permitted to invest up to 100% equity in real estate development. Investment, made by the NRIs and OCBs, are fully repatriable, but with a 3 year lock-in period on original investment and, 16% cap on dividend repatriation. For those proposals that do not qualify under the automatic route, Government approval is granted through FIPB.
A: Regulations needed for investment/purchase/lease of property and repatriation would as follow:
Indian citizens (Non- residents)
Investment made from local funds requires:
No approval needed under FEMA/FIPB
Investment made from foreign funds requires RBI permission
Declaration in Form IPI-7 (within 90 days from date of purchase)
Repatriation allowed after 3 years on applying to RBI in form IPI-8
Repatriation subjected to following conditions:
Purchasing on/after 26th May 1993.
Property held for more than 3 years after the final instalment of sale deed.
Amount of sale proceeds equivalent to original investment in foreign exchange to be repatriated.
Repatriation allowed after 3 years on applying to RBI in form IPI-8 within 90 days of the sale of the property.
Property can be residential or commercial but not agricultural land or farm house.
Foreign citizens (Indian origin)
Foreign citizen of Indian origin criteria are:
Held an Indian passport at any time
He or his father or parental grandfather was/were a citizen/s of India under the Constitution of India or the Citizenship Act, 1995.
RBI permission
Application in Form IPI-1
No repatriation of sales proceeds
Investment made from foreign funds requires:
Declaration in FORM IPI-7 (within 90 days from date of purchase)
Compensation sum remitted through normal banking channels or from funds of their NRE/FCNR accounts in India
Repatriation:
Repatriation subjected to following conditions
Residential properties maximum allowed are 2 houses.
Property can residential or commercial but not agricultural land or farm house.
Foreign citizens (Non-Indian origin)
Investment made from local funds:
No permission given by RBI
Investment made from foreign funds requires following conditions:
Only residential property
Compensation sum remitted through normal banking channels
A: There is no restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available.
A: No.
A. Yes, 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. The proceeds should be credited to NRO account only.
A: Other than agricultural land/farm house/plantation property foreign citizens of Indian origin can acquire & dispose the commercial properties provided all conditions are met as described above.
Yes, RBI has granted permission for letting out the property on rent provided it is credited to NRO account.
A: No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer' includes among others, ‘purchase'. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of purchase.
A: No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer' includes among others, ‘gift'. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire residential/commercial property in India by way of gift.
A: Yes. A 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 may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission of RBI.
A: No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.
A: No. A person resident outside India cannot acquire agricultural land/plantation property/farm house in India by way of gift.
A: Yes. A person resident outside India can hold immovable property acquired by way of inheritance from a person resident in India as per the provisions of Section 6(5) of the Foreign Exchange Management Act, 1999.
A: Yes. Under general permission available NRI/PIO may acquire residential/commercial property by way of gift from a person resident in India or a NRI or a PIO.
A: NRI can transfer by way of sale residential/commercial property in India to a person resident in India or to a NRI or a PIO.
A: PIO can transfer by way of sale residential/commercial property in India only to a person resident in India.
A: No. He would need to seek Reserve Bank prior approval for transfer by way of sale residential/commercial property in India to a NRI or a PIO.
A: No. A foreign national of non-Indian origin whether resident in India or outside India would need to seek prior approval of Reserve Bank for transfer by way of sale residential/property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India.
A: Under the general permission available NRI/PIO may transfer by way of sale his agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.
A: A foreign national of non-Indian origin resident outside India would need to seek prior approval of Reserve Bank for transfer, by way of sale, agricultural land/plantation property/farm house acquired in India.
A: Yes. Accounts can be maintained by NRIs in rupees as well as in foreign currency. Accounts in foreign currencies can, however, can be maintained with authorities’ dealers only.
A: Three types of accounts viz. Non Resident External Rupee Accounts (NRE account), Ordinary Non-Resident Rupee Account (NRO account) and Non-Resident (Non- repatriable) Rupee Deposit accounts (NRNR) are permitted to be maintained.
A. 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.
A. 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, provided the loan has been subsequently repaid by remitting funds from abroad or by debit to NRE/FCNR(B) accounts (Please see A.P. (DIR) Series Circular No. 101 dated 5.5.2003) Arial; color:red;mso-ansi-language:EN-IN'>
A. Yes.
A. Yes, sale proceeds of not more than two residential properties can be repatriated.
A. 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.
A. 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.
A. 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].
A. 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.
Yes, provided the amount to be remitted does not exceed USD one million per financial year, for all bonafide purposes to the satisfaction of authorized dealers and subject to tax compliance.
A. The sale proceeds may be credited to NRO account.
A. Yes, they may continue to hold the immovable property. However, they can transfer the property only with the prior approval of Reserve Bank.
A. 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. Yes, it is possible to obtain loan from certain institutions like HDFC, ICICI, LIC, others provided the borrower contributes at least 25% of the cost by way of foreign in-ward remittance through normal banking channels or out of funds held in his NRE/FCRN account.
Authorized dealer can grant up to Rs._______ (depends from bank to bank & eligibility) for acquisition of one flat and 25% of total amount is contributed by the borrower.
(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)
A.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. Repatriation: (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 authorised 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 authorised 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 authorised 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.
A. Yes, NRI/PIO can avail of housing loan in rupees from an authorized 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.
A. Yes, they do as RBI grants permission to this companies whose employees are deputed abroad & holding the Indian passport subjected to certain conditions. (Please refer to Regulation 8A of Notification No. FEMA 4/2000-RB dated May 3, 2000 and A.P. (DIR Series) Circular No.27 dated October 10, 2003).
A. Yes, provided original payment was made buy inward remittance or debited from NRE/FCNR account without any permission from RBI.
A. Yes
A. Yes, amount not exceeding $ 1million (varies with regulation) per financial year subject to documentary evidence of inheritance & tax clearance certificate from tax authority to authorized dealer for remittances.
However if a PIO (person of Indian origin) is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China he should seek prior approval of RBI.
The remittance facility is not available to a citizen of Nepal or Bhutan.
A. No. He needs to seek prior approval of RBI with documentary evidence in support of inheritance & tax clearance /no objection certificate from I.Tax.
A. Yes, they can rent out the place without seeking permission of RBI. The rental income can also be repatriated outside of India if certified by chartered accountant after paying the applicable or required taxes.
A. No
A. Yes, provided it is necessary for or incidental to carrying on such activity and all applicable laws, rules, regulations or directions are duly compiled with & the purchase price
should be paid by way of inward remittance through proper channel & declaration in form IPI within ninety days from date of acquisition of property.
Yes, RBI has granted general permission for such a mortgage.
A. 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.
A. About 10-12% of all NRIs aspire to invest abroad. The percentage is increasing for both residential & business purpose.
The main reasons of upsurge are that the property abroad is cheaper to some Indian metros, transparency in the procedure & inspirational/prestigious value among others.
A. The choice of countries depends upon the purpose like pure investment, business operations, residence or a holiday home. The countries are USA, Malaysia, Mauritius, Dubai, UK, Singapore, Canada, Australia and New Zealand to name a few favourites.
The precautions one should take can be as follow: