NRI
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Non-Resident Indians (NRIs), under RBI guidelines, can purchase certain kinds of properties, though other
forms may require special permissions. Thus every NRI, interested in buying property in India, must be aware
of the provisions related to purchase or ownership of immovable property in India under Foreign Exchange Management
Act (FEMA). Persons of Indian Origin (PIOs) and NRIs are always treated the same when it comes to investing in real estate
Who is a NRI ?
As defined by the Foreign Exchange Management Act of 1999 (FEMA), Non Resident Indian (NRI) is a citizen of India, who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Non-resident foreign citizens of Indian Origin are treated at par with Non Resident Indian (NRIs)
Are foreign nationals of Indian origin allowed to purchase immovable property in India?
Yes, foreign nationals of Indian origin, whether Resident in India or abroad, have been granted general permission to purchase immovable property in India.
What should be the method of payment for purchasing Residential immovable property in India by foreign nationals of Indian origin under the general permission?
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/ FCNR accounts maintained with banks in India
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Can Non-Resident Indians staying abroad purchase property through an agent or through a power of attorney?
The Non-Resident Indians who are staying abroad may enter into an agreement through their relatives and/ or by executing the Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or Developer, drafting and signing of agreements, taking possession, etc.). These formalities can be completed through some known person who can be given the Power of Attorney for this purpose. Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be drafted on the stamp paper bought in India
Are there any formalities to be completed by foreign nationals of Indian origin for purchasing Residential immovable property in India?
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
Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds?
Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorized 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
Do Non-Resident Indians i.e. Indian citizens resident abroad require permission of Reserve Bank to acquire any immovable property in India?
No specific permission is required by Non-Resident Indian nationals to acquire immovable Property in India other than agricultural/ plantation/ farmhouse.
