According to the Foreign Exchange Management Act (FEMA) of 1999, an Indian Citizen who stays abroad for employment/business or stays outside the country for an indefinite period of time is considered to be an NRI. (Persons Posted in U.N. organisations and official deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as nonresidents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs).
PIO is a person of Indian origin whose ancestors were born in India and he/she has an Indian ancestry but not an Indian citizenship. As per the FEMA of 1999, a person of Indian origin can avail bank accounts, invest in shares and securities in India.
So, he or she
According to the RBI guide lines, an NRI/PIO can acquire a residential property in India by a way of gift from an Indian, NRI/PIO or purchase it. He or she can even acquire residential property by way of inheritance from a person who is a resident of India as per the Provisions of Section 6(5) of the FEMA, 1999.
When NRIs/PIOs purchase an immovable residential property under general permission they are not required to file any documents with the Reserve Bank of India.
No, there aren’t any restrictions.
An NRI can sell his or her property in India to an Indian resident/ NRI / PIO.
Under general permission a PIO can sell his or her residential property in India to an Indian citizen only.
Yes. An NRI/PIO can transfer their residential property in India by way of a gift to an Indian resident/NRI/PIO.
Under the general permission, an NRI/PIO may purchase a residential property in India by funds remitted to India through normal banking channel or funds held in his/her NRE/FCNR (B)NRO accounts. No consideration shall be paid outside India.
Reserve Bank of India has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc. and authorised dealers to grant housing loans to NRIs for acquiring a house/flat for personal use but subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period of 15 years out of inward remittances or out of funds held in the investors' NRE/FCNR/NRO accounts.
NRIs and PIOs are required to file a declaration in a form IPI 7 with the Central Office of Reserve Bank at Mumbai (within a period of 90 days) from the date of purchase of the property or final payment of the purchase consideration along with a certified copy of the document which would be an evidence of the transaction and bank certificate regarding the consideration paid.
Reserve Bank of India has permitted NRIs to let out any immovable property in India on rent. The rental income or proceeds of any investment of such income are eligible for repatriation.
(a) When an NRI/PIO sells an immovable property other than agricultural land / farm house / plantation property, the authorised dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are followed:
(i) 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
(ii) The amount to be repatriated does not exceed:
(iii) In the case of a residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
(A) 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 $(US) 1 million per financial year out of the balance in the NRO account / sale proceeds of assets through purchase / the assets in India acquired by him through inheritance / legacy. 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 in any financial year requires prior permission of the Reserve Bank.
(c) 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.
NRI/PIO may repatriate up to US $ 1 million per financial year (April-March) from their NRO account which would also include the sale proceeds of immovable property. There is no lock in period for sale of immovable property and repatriation of sale proceeds outside India.