Who can purchase immovable property in India?
under the general permission available, the following categories can freely purchase immovable property in India:
i) Non-Resident Indian (NRI) - that is a citizen of India resident outside India.
ii) Person of Indian Origin (PIO) - that is an individual
(not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
a. at any time, held Indian passport, or
b. who or his/her father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57
of 1955).
The general permission, however, covers only purchase of residential and commercial property and not for purchase of
agricultural land/plantation property/farm house in India.
There are no restrictions on the number of residential/commercial properties that can be purchased.
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, can acquire any immovable
property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property
should be made by way of foreign inward remittance through proper banking channel. On winding up of the business, the sale
proceeds of such property can be repatriated only with the prior approval of Reserve Bank.
However, if the foreign company has established a liaison office, it cannot acquire immovable property. In such cases, liaison
offices can take property by way of lease not exceeding five years.
i) a person resident in India or
ii) an NRI or
iii) a PIO
However, the property can only be commercial or residential. Agricultural land/plantation property/farm house in India cannot
be acquired by way of gift. (b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable
property in India through a gift.
(a)NRI can sell property in India to:
i) a person resident in India or
ii) an NRI or
iii) a PIO
(b) PIO can sell property in India to
i) a person resident in India.
ii) an NRI or
iii) a PIO — with the prior approval of the Reserve Bank of India
(c) 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 the Reserve Bank of India to:
i) a person resident in India
ii) an NRI
iii)a PIO.
Can an agricultural land/plantation property/farm house in India
owned/held by a non-resident be sold?
(a) NRI/PIO may sell agricultural land/ plantation property/farm house to a person resident in India who is a citizen of India.
(b) Foreign national of non-Indian origin resident outside India would need prior approval of the Reserve Bank of India to sell
agricultural land/plantation property/farm house
Transfer by gift.
non-resident can gift his residential/commercial property.
(a) NRI/PIO may gift residential/commercial property to
i) a person resident in India or
ii) an NRI or
iii)a PIO.
(b) a foreign national of non-Indian origin needs prior approval of the Reserve Bank of India.
(a) NRI/PIO can gift but only to a person resident in India who is a citizen of India.
(b) foreign national of non-Indian origin needs prior approval of the Reserve Bank of India.
Residential/commercial property can be mortgaged
i) NRI/PIO can mortgage to:
(a) an authorized dealer/housing finance institution in India without the approval of the Reserve Bank of India.
(b) a party abroad with prior approval of the Reserve Bank of India.
ii) a foreign national of non-Indian origin can mortgage only with prior approval of the Reserve Bank of India.
iii) a foreign company which has established a branch office or other place of business in accordance with FERA/FEMA
regulations has general permission to mortgage property with an authorized dealer in India.
MODE OF PAYMENT FOR PURCHASE
Payment can be made out of
(a) funds remitted to India through normal banking channels
(b) funds held in NRE/FCNR (B)/NRO account maintained in India
No payment can be made either by traveler's Cheque or by foreign currency notes. No payment can be made outside India.
OTHER ISSUES
Regarding rent out of the residential/commercial property purchased out of
foreign exchange/rupee funds by NRI/PIO.
NRI/PIO can rent out the property without the approval of the RBI. 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.
The sale proceeds can be credited to NRO account.
A person resident in India who is a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or
Iran or Nepal or Bhutan is governed by the provisions of the Foreign Exchange Management (Acquisition and Transfer
of Immovable Property in India) Regulations, 2000. He would require prior approval of the RBI for acquisition and
transfer of immovable property in India even though he is resident in India. Such requests are considered by the RBI
in consultation with the Government in India.
Foreign nationals of non-Indian origin resident outside India are not permitted to acquire any immovable property in India
unless such property is acquired by way of inheritance from a person who was 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.
Foreign Nationals of non-Indian origin, other than a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran,
Nepal or Bhutan, can acquire immovable property in India on becoming resident in India in terms of Section 2(v) of the
Foreign Exchange Management Act, 1999. In this connection, he has to satisfy the condition of period of stay. The type
of visa granted should clearly indicate the intention to stay in India for an uncertain period to determine his
residential status in terms of section 2(v) FEMA, 1999. (Press Release dated February 1, 2009 issued by Government of
India is enclosed as Annex-1).
Foreign nationals of non-Indian origin who have acquired immovable property in India by way of inheritance with the specific
approval of the Reserve Bank or have purchased the immovable property with the specific approval of the Reserve Bank cannot
transfer such property without the prior permission of the Reserve Bank.
The relevant regulations covering the transactions in immovable property have been notified vide RBI Notification No. FEMA
21/2000-RB dated May 3, 2000 and this basic notification has been subsequently amended by the notifications detailed below:
i) Notification No.FEMA 64/2002-RB dated June 29, 2002;
ii) Notification No.FEMA 65/2002-RB dated June 29, 2002;
iii) Notification No.FEMA 93/2003-RB dated June 9, 2003;
iv) Notification No. FEMA 146/2006-RB dated February 10, 2006 read with A.P.(DIR Series) Circular No. 5 dated 16.8.2006; and
v) Notification No. FEMA 200/2009-RB dated October 5, 2009