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• Where can one find regulations/directions issued by Reserve Bank for acquisition and transfer of immovable property in India by a person resident outside India?
  

  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 vides 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

Acquisition of immovable property in India by way of purchase by a person resident outside India

• Under the extant foreign exchange regulations to whom is general permission available for purchase immovable property in India?
  General Permission is available to purchase only a residential/commercial property in India to a person resident outside India who is a citizen of India (NRI) and who is a Person of Indian Origin (PIO).
• Who is a Person of Indian Origin (PIO)?
  For the purpose of acquisition and transfer of immovable property in India, a PIO 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).
• Is NRI/PIO who has purchased residential/commercial property under general permission required to file any documents with Reserve Bank of India?
  NRI/PIO who has purchased residential/commercial property under general permission is not required to file any documents with the Reserve Bank.
• Is there any restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available?
  There is no restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available.
• Can a name of a foreign national of non-Indian origin be added as a second holder to a residential/commercial property purchased by NRI/PIO?
  No
• Can a foreign national of non-Indian origin resident outside India acquire any immovable property in India by way of purchase?
  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.
• Can a foreign national of non-Indian origin acquire residential property on a lease in India?
  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 Reserve Bank of India.
• Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of purchase?
  No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.
• 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, provided gift tax has been paid.
• 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.
• Can they dispose of such properties?
  Yes.
• 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.
• 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 of any immovable property in India. The rental income or proceeds of any investment of such income have to be credited to NRO account.
• Can NRIs obtain loans for acquisition of a house/flat for residential purpose from 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. to grant housing loans to non-resident Indian nationals for acquisition of houses/flats for self-occupation subject to certain conditions.
• Can authorized dealer grant loans to NRIs for acquisition of a flat/house for residential purposes?
  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.
• 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 passport subject to certain conditions. Source: Reserve Bank of India
• What are the options available for obtaining guarantors while applying for a HDFC/LIC loan?
  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.
• While purchasing real estate most developers demand a Power of Attorney in their favour, is there a way to avoid it?
  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.

Acquisition of immovable property in India by way of gift by a person resident outside India

• Can NRI/PIO acquire residential/commercial property by way of gift under the general permission available?
  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.
• Can a foreign national of non-Indian origin resident outside India acquire residential/commercial in India by way of gift?
  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.
• Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of gift?
  No. A person resident outside India cannot acquire agricultural land/plantation property/farm house in India by way of gift.

Acquisition of immovable property in India by way of inheritance by a person resident outside India

• Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable property in India acquired by way of inheritance from a person resident in India?
  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.
• Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable property in India acquired by way of inheritance from a person resident outside India?
  

  With the specific approval of Reserve Bank a person resident outside India may hold any immovable property in India acquired by way of inheritance from a person resident outside India, provided the bequeath or had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations.

Transfer of immovable property in India by way of sale by a person resident outside India

• Under general permission available to whom can NRI transfer by way of sale his residential/commercial property?
  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.
• Under general permission available to whom can a PIO transfer his residential/commercial property by way of sale?
  PIO can transfer by way of sale residential/commercial property in India only to a person resident in India.
• Can a PIO transfer by way of sale his residential/commercial property to a NRI or a PIO?
  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.
• Can a foreign national of non-Indian origin whether resident in India or outside India 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?
  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.
• Under general permission available to whom can NRI/PIO transfer by way of sale his agricultural land/plantation property/farm house in India?
  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.

• Can a foreign national of non-Indian origin resident outside India transfer by way of sale agricultural land/plantation property/farm house acquired by him in India?
  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.