There is quite nothing like the reassurance of having a home where your heart is! At YESH DEVELOPERS we provide information and answers to most of the Frequently Asked Questions (FAQs) concerning Non-resident Indians (NRIs) / Persons of Indian Origin (PIOs). Given below are answers to the questions Non-resident Indians (NRIs) / Persons of Indian Origin (PIOs) buyers or investors would have:
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Who is a Non-Resident Indian (NRI)?
A NRI is a Person Resident outside India who is a citizen of India or a Person of Indian origin. A Person resident outside India is a person who has gone out of India or who stays outside India, in either case For or on taking up employment outside India, or For carrying on outside India a business or vocation, or For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period
Do non-resident Indian citizen require permission of Reserve Bank to acquire residential/ commercial property in India?
No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse.
Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use? If yes, what are the formalities required to be completed by them?
Yes, However, Reserve Bank of India has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to acquire immovable property in India for their bonafide residential purpose. They are, therefore, not required to obtain separate permission of The Reserve Bank of India. They are required to file a declaration in form IPI 7 with Central Office of Reserve Bank at Bangalore 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. Hence a person of Indian origin resident outside India does not require any permission to acquire any immovable property other than agricultural land/farm house/plantation property in India by purchase, from out of funds: - Received in India by way of inward remittance through banking channel from any place outside India OR - Held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act.
In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens 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 bank in India.
Where can permission be taken for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals of Indian origin?
All requests for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001.
Can sale proceeds of property sold by NRIs 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 foreign citizens of Indian origin acquire or dispose 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 the properties (residential / commercial) owned by NRIs be given on rent if not required for immediate use?
Yes. The NRIs / PIOs can freely rent out their immovable properties in India without seeking any permission from the Reserve Bank of India. 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 are eligible for repatriation and hence the rental income being a current account transaction is freely repatriable outside India.
Can immoveable property held in India, be transferred by way of gift to relatives/registered charitable trusts/organizations in India?
Yes, General permission has been granted by Reserve Bank to non-resident persons (foreign citizen) of Indian Origin to transfer, by way of gift, immoveable property held by them in India to relatives and charitable trusts / organizations subject to the condition that the provisions of all other laws, as applicable are complied with.
Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?
The Reserve Bank has granted permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. 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 investors NRE / FCNR / NRO accounts.
Can an authorized dealer grant a housing loan to non-residents of Indian nationality where he is a principal borrower with his resident close relative as a co-borrower / guarantor or where the immovable property is owned jointly by such NRI borrower with his resident close relative?
Yes, However in such cases the payment of margin money and repayment of loan installments should be made by the NRI borrower.
What are the documents required for loan processing?
The following documents are required along with the application form: Photocopy of the labour contract duly countersigned by applicants employer (translated to English for non-English documents). Latest salary certificate (in English) specifying the following:
- Name (as it appears in the passport).
- Date of joining.
- Passport Number.
- Perquisites and salary.
- Photocopy of labor card / identity card.
- Photocopy of valid resident Visa stamped on the Passport.
- Photocopy of monthly statement of local Bank account.
- Property related documents.