TaxTMI 
TaxTMI 
Master Circular on Acquisition and Transfer of Immovable Property in India by NRIs/PIOs/Foreign Nationals of Non-Indian Origin
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.... A Non-Resident Indian (NRI).. 22 2 B Person of Indian Origin (PIO)...... 3 3. Acquisition of immovable Property by Foreign Embassies/ Diplomats/ Consulate Generals........ 4 4. Acquisition of immovable property by person resident outside India for carrying on a permitted activity......... 5 5. Repatriation of sale proceeds of immovable property.. 6. Refund of purchase consideration ....... 5 7 7. Prior permission to the citizens of certain countries for acquisition or transfer of immovable property in India ....... 7 8. Purchase of Immovable Property in India by a Foreign National of Non- Indian Origin resident outside India ... Annex-1....... Press Release of Government of India... Annex-2......... Form IPI..... APPENDIX.... List of notifications / A.P. (DIR Series) 8 9 9 11 11 13 13 2 of 14 1. Introduction The Foreign Exchange Management Act, 1999 (FEMA) empowers the Reserve Bank to frame regulations to prohibit, restrict or regulate the acquisition or transfer of immovable property in India by certain persons residents outside India. The regulations governing acquisition and transfer of immovable property in India is notified under Notific....
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....house / plantation property in India, by way of gift or sale 2 A 'Person of Indian Origin' means an individual (not being a citizen of Pakistan or Bangladesh or Sir Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who (i) (ii) at any time, held an Indian Passport or who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). 3 4 of 14 to a person resident in India, who is a citizen of India. He may also transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India, who is a citizen of India or to a Person of Indian Origin resident outside India. iv) Payment for Acquisition of Immovable Property in India A PIO can make payment for acquisition of immovable property in India (other than agricultural land / farm house / plantation property): a. By way of purchase out of funds received by inward remittance through normal banking channels or by debit to his NRE / FCNR(B) / NRO account. b. Such payments cannot be made either by traveller's cheque or by foreign curren....
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....ty situated in India if such currency, security or property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India. 5 6 of 14 (b) In the event of sale of immovable property other than agricultural land / farm house / plantation property in India by a person resident outside India who is a citizen of India or a person of Indian origin, the Authorised Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely: (i) (ii) the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations; the amount to be repatriated does not exceed: (iii) • • • the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels, or the amount paid out of funds held in Foreign Currency Non- Resident Account, or the foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident E....
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....ndia, cannot acquire or transfer immovable property in India, without the prior permission of the Reserve Bank. This restriction is 8 of 14 not applicable where the immovable property is taken on lease for a period not exceeding five years. 8. Purchase of Immovable Property in India by a Foreign National of Non- Indian Origin resident outside India (i) (ii) 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 p....
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....g his intention to stay for an uncertain period can acquire immovable property in India as he would be a 'person resident in India' as per section 2(v) of FEMA, 1999. To be treated as a person resident in India under FEMA, a person has not only to satisfy the condition of the period of stay (being more than 182 days during the course of preceding financial year) but also his purpose of stay as well as the type of Indian visa granted to him to clearly indicate the intention to stay in India for an uncertain period. In this regard, to be eligible, the intention to stay has to be unambiguously 9 10 of 14 established with supporting documentation including visa. As per the provisions contained in Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulation 21/2000 (Notification No. 21/2000-RB dated the 3rd May, 2000), an Indian citizen resident outside India and a Person of Indian Origin resident outside India may acquire immovable property in India other than agricultural land, plantation or a farm house. It has come to the notice of the Central Government that foreign nationals are buying immovable property illegally in some parts ....