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Acquisition and Transfer of Immovable
Property in India
A. Non- Resident
Indian (NRI)
(i) Purchase of
immovable property: Any
immovable property (other than agricultural land/ plantation property / farm
house) in India.
(ii) Transfer of
immovable property: A
NRI may transfer any immovable property in India to a person resident in India.
He may also transfer his property (other than agricultural land or plantation
property or farm house) to an Indian Citizen resident outside India or a PIO
resident outside India.
(iii) Payment
for Acquisition of Immovable Property: May be made out of Funds received
through normal banking channels from abroad or by debit to his NRE / FCNR (B) /
NRO account only.
(iv)
Documents: If purchased under general permission an
NRI is not required to file any documents with the Reserve Bank.
B. Person of
Indian Origin (PIO)
(i) Purchase of
immovable property: Any
immovable property (other than agricultural land/ plantation property / farm
house) in India.
(ii) Gift/
Inheritance of immovable property:
(a)
By
way of gift from a person resident in India or a NRI or a PIO.
(b)By way of
inheritance from resident indian or a person resident outside India who had
acquired such property as per FEMA regulations.
(iii) Transfer
of immovable property: By way of sale to a person resident in India. He may,
however gift or sell his agricultural land / farm house / plantation in India,
to an India citizen resident in India.
He may also gift his residential or commercial property in India to a person
resident in India or outside India, who is a citizen of India or to a PIO
resident outside India.
(iv) Payment for
Acquisition of Immovable Property in India:
a.
Out
of funds received only by inward remittance through normal banking channels or
by debit to his NRE / FCNR (B) / NRO account.
(v)
Documents: If purchased under general permission a
PIO is not required to file any documents with the Reserve Bank.
Acquisition by
Foreign Embassies/ Diplomats/ Consulate Generals
Foreign Embassy/
Diplomat/ Consulate General, may purchase/ sell immovable property (other than
agricultural land/ plantation property/ farm house) in India provided –
i. Clearance
from the Government of India, Ministry of External Affairs is obtained, and
ii.
The consideration is paid out of funds remitted from abroad through the normal
banking channels.
Acquisition by person resident outside India for
carrying on a permitted activity
A
person resident outside India who has established a Branch, Office or other
place of business, other than a Liaison Office, for carrying on any activity in
India, may –
a.
acquire
any immovable property in India, which is necessary for or incidental to carrying
on such activity and the person files with the RBI a declaration in the form
IPI, not later than 90 days from the date of such acquisition; and
b.
Mortgage
such property to an Authorised Dealer as a security for any borrowing.
Repatriation of
sale proceeds of immovable property
(A) Immovable
property acquired by way of purchase
(a)
A
person or his successor shall not, except with the prior permission of the Reserve
Bank, repatriate the sale proceeds of any immovable property.
(b) In the event of
sale of immovable property other than agricultural land / farm house /
plantation property in India by an Indian citizen resident outside India or a
person of Indian origin, the Authorised Dealer may allow repatriation of the
sale proceeds, provided:
(i)
the
immovable property was acquired as per FEMA guidelines;
(ii)
amount
to be repatriated does not exceed the amount paid for acquisition of the property
in foreign exchange (Inward remittance, FCNR a/c or NRE a/c).
(iii)
in case of residential property, the repatriation is restricted to two properties
only.
(B) Immovable
property acquired by way of inheritance/ legacy/ out of Rupee funds
A NRI / PIO may
remit an amount, up to US $ 1,000,000 per financial year out of the balances
held in NRO accounts or sale proceeds of assets by way of purchase / acquired by
inheritance / legacy / out of Rupee funds. Remittances exceeding this limit require
prior permission of the Reserve Bank.
In
cases of the deed of settlement made by either of his parents or a close
relative and the settlement taking effect on the death of the settler, the
original deed of settlement should be produced for the remittance. All
remittances will be subject to payment of applicable taxes in India.
Where
the remittance as above is made in more than one instalment, the remittance shall
be made through the same Authorised Dealer.
Refund of
purchase consideration
Refund, made by
the house building agencies on account of non-allotment, together with
interest, if any may be allowed by the Authorised Dealers by credit to NRE/FCNR
(B) account of the beneficiary, provided the original payment was made out of
NRE / FCNR (B) account or inward remittance through normal banking channels.
Prohibition on acquisition or transfer of immovable
property in India by citizens of certain countries
Citizens
of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan,
Macau or Hong Kong cannot, without prior permission of the Reserve Bank,
acquire or transfer immovable property in India, other than lease, not
exceeding five years.
Purchase of Immovable Property in India by a Foreign
National of Non-Indian Origin resident outside India
i.
Such persons are not permitted to acquire any immovable property in India
unless by way of inheritance from a person resident in India. However, they can
acquire or transfer immovable property in India, on lease, not exceeding five
years without the prior permission of the Reserve Bank.
ii. Foreign
Nationals of non-Indian origin, other than a citizen of Pakistan, Bangladesh,
Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong can
acquire immovable property in India on becoming resident provided he satisfies
the condition of the period of stay.
iii.
Foreign nationals of non-Indian origin who have acquired immovable property in
India by any such way mentioned above cannot transfer such property without the
prior permission of the RBI.
Payment of taxes – Any transaction
involving acquisition of immovable property under these regulations
shall be subject to applicable tax laws in India.
Based on RBI
Circular dt 01/07/15. Please visit www.rbi.org.in for any
further clarification if required….. Poppy
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