NRI FAQ

Following are some Frequently Asked Questions on Investment in immovable property in India. This page is updated regularly; if you have any specific queries, please contact us.

• Do foreign citizens of Indian origin require permission of The Reserve Bank to purchase immovable property in India for their residential use?
  
  No Permission is required by Non-Resident Indian (NRI) or person of Indian Origin (PIO) to acquire immoveable property in India other than Agricultural Land / Plantation / Farmhouse.
  
• In what manner should the purchase consideration for residential immovable property be paid by foreign citizens of India origin under the general permission?
  
  The purchase consideration should be met either out of inward remittance in foreign exchange through normal banking channels, or out of funds from NRE/FCNR accounts maintained with banks in India.
  
  
• What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?
  
  They are required to file a declaration in form IPI 7 with 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 alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
  
  
• Can Indian companies grant loans to their NRI staff?
  
  The Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions. 18. Can an authorised 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-obligant / guranter or where the land 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 instalments should be made by the NRI borrower.
  
  
• Who is a foreign citizen of Indian Origin?
  
  A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal) is deemed to be of Indian Origin if : i)he held an Indian Passport at any time or ii)he or his father or paternal grand father was a citizen of India by virtue of the constitution of India or the Citizenship Act, 1955.
  
  
• Can sale proceeds of such property if and when sold be remitted out of India?
  
  In respect of residential properties purchased on or after 26 May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange of the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26 May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.
  
  
• Can foreign citizens of Indian origin accquire commercial properties in India?
  
  Yes, under the general permission granted by The Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser's NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.
  
  
• What is the procedure for seeking such repatriation?
  
  Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of The Reserve Bank at Mumbai within 90 days of the sale of the property.
  
  
• Can foreign citizens of Indian origin acquire or dispose residential property by way of gift?
  
  A. 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 unmovable property held in India, be Transferred by way of gift to relatives/registered charitable trusts/organisations 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 / organisations subject to the condition that the provisions of all other laws, as applicable are complied with
  
  
  
• Can sale proceeds of such property be remitted out of India?
  Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26 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, which ever 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 the properties (residential/commercial) be given on rent 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 in-come are eligible for repatriation.