Frequently Asked Questions
An Indian Citizen who stays abroad for employment/ carrying on business or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. organizations and officials deputed abroad by Central/ State Government and Public Sector Undertakings on temporary assignments are also treated as non-resident) Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens.
- Q Who is an NRI?
- A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal is deemed to be of Indian origin if.
- He held an Indian pass port at any time , or
- He or his father or paternal grandfather was a citizen of India by virtue of the constitution of India or the citizenship act, 1955 (57 of 1955).
- Q Do NRI's require permission of Reserve Bank to acquire and transfer immovable property in India?
- No. NRI's do not require any permission to acquire any immovable property in India other than agricultural / plantation property or a farm house. Permission is required only in the case of transferring of agricultural or plantation property or farm house to another citizen of India NRI or PIO.
- Q Do any documents need to be filed with Reserve Bank of India after purchase
- There are no restrictions on the number of residential / commercial properties that can be purchased.
- Q Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?
- Q Can a foreign national who is a person resident in India purchase immovable property in India?
- Yes, but the person concerned would have to obtain the approvals, and fulfill the requirements if any, prescribed by other authorities, such as the concerned State Government, etc. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank. Such requests are considered by Reserve Bank in consultation with the Government of India.
- Q Can an office of a foreign company purchase immovable property in India?
- A foreign company which has established a Branch Office or other place of business in India, in accordance with FERA / FEMA regulations, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. A declaration in form IPI should be filed with Reserve Bank within ninety days from the date of acquiring the property. Further, acquisition of immovable property by entities that had set up Branch Offices in India and incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank to acquire such immovable property.
- Q Whether immovable property in India can be acquired by way of gift?
- Yes, NRIs and PIOs can freely acquire immovable property by way of gift. However the property can only be commercial or residential. Agricultural land / plantation property / farmhouse in India cannot be acquired by way of gift. A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India through gift.
- Q Can an NRI / PIO/foreign national sell his residential / commercial property?
- 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 can sell property in India with prior approval of Reserve Bank
- Q Can an agricultural land / plantation property / farm house in India owned / held by a non-resident be sold?
- NRI / PIO may sell agricultural land /plantation property/farm house to a person resident in India who is a citizen of India with prior approval of Reserve Bank
- Q Can sale proceeds of property if and when sold be remitted out of India?
- In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a NRI or PIO, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied: - The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999. In case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
- Q What other facilities are available for repatriation?
- Authorized dealers can allow remittance up to USD 1 million for any purpose, per calendar year from balances in NRO accounts subject to payment of applicable taxes. The limit of USD 1 million per year includes sale proceeds of immovable properties acquired by the NRI/PIO's while they were resident in India and held for a period of 10 years and above. In case the property is sold after being held for less than 10 years, remittance can be made if the sale proceeds were held for the balance period in NRO account or in any other eligible instruments.
- Q Can NRI's/PIO's rent out the properties (residential/commercial) if not required for immediate use?
- Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income is eligible for repatriation
- Q 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 NRI's for acquisition of a house/flat for self-occupation subject to certain conditions. The purpose of 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 not exceeding 15 years out of inward remittances or out of funds held in the investor's NRE/FCNR/NRO Accounts.
If you are considering a home for your parents, a home in your home country & a home that appreciates in value, look no further than Vishwakarma Properties. Vishwakarma team comprises of NRIs in key positions that truly understand the needs of NRIs like yourself. We have put together below a series of frequently asked questions (FAQs) that will help you understand the rules & regulations of buying a home in Chennai.