TaxTMI 
TaxTMI 
TaxTMI 
Acquisition and Transfer of Immovable Property in India by a person resident outside India
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....herited from a person who was a resident in India. 3. The regulations under the Notification No FEMA 21 dated May 3, 2000 permit a NRI or a PIO to acquire immovable property in India other than agricultural land or, plantation property or farm house. Further, foreign companies who have been permitted to open an office in India are also allowed to acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. This stipulation is not available to entities which are permitted to open liaison offices in India. 4. 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: 1. Notification No.FEMA 64/2002-RB dated June 29, 2002; 2. Notification No.FEMA 65/2002-RB dated June 29, 2002; 3. Notification No.FEMA 93/2003-RB dated June 9, 2003; and 4. Notification No. FEMA 146/2006-RB dated February 10 2006 (available with A.P.(DIR Series) Circular No. 5 dated 16.8.2006 on website) All the above notifications are available on RBI website: www.fema.rbi.org.in. ....
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....1 Who can purchase immovable property in India? A.1 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 1. at any time, held Indian passport, or 2. who or either of whose 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. Q.2. Whether NRI/PIO can acquire agricultural land/ plantation property / farm house in India? A.2. No. Since general permission is not available to NRI/PIO to acquire agricultural land/ plantation property / farm house in India, such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India. Q.3. Do any documents need....
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....vable property by entities who 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. However, if the foreign company has established a Liaison Office, it can not acquire immovable property . In such cases, Liaison Offices, can take property by way of lease not exceeding 5 years. Q.9 Whether immovable property in India can be acquired by way of gift ? A.9. (a) Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from 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 gift. Q.10. Whether a non-resident can inherit immovable property in India? A.10. Yes, a person resident outside India i.e. i) an NRI ii) a PIO and iii) a foreign national of non-Indian origin can inherit and hold immovable property in India from a....
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....ommercial property be mortgaged? A.16. i) NRI / PIO can mortgage to: (a) an authorised dealer / housing finance institution in India - without the approval of Reserve Bank. (b) a party abroad - with prior approval of Reserve Bank. ii) a foreign national of non-Indian origin can mortgage only with prior approval of Reserve Bank 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 the property with an authorized dealer in India. III. Mode of payment for purchase Q.17. How can an NRI / PIO make payment for purchase of residential / commercial property in India ? A.17. Payment can be made by NRI / PIO out of (a) funds remitted to India through normal banking channel or (b) funds held in NRE / FCNR (B) / NRO account maintained in India No payment can be made either by traveller's cheque or by foreign currency notes. No payment can be made outside India. Q.18 What shall be the option if there is refund of application money / payment made by the building agencies / seller because of non-allotment of flat / plot / cancellation of bookings / contracts ? A.18. The amount o....
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....to the satisfaction of the authorised dealers, subject to tax compliance. Q.20. Can NRI / PIO, avail of housing loan in rupees from an authorised dealer or housing finance institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation ? How can such loan be repaid? A.20. Yes, NRI/PIO can avail of housing loan in rupees from an Authorised Dealer or housing finance institution subject to certain terms and conditions. (Please refer to Regulation 8 of Notification No. FEMA 4/2000-RB dated 3.5.2000 and A.P. (DIR) Series Circular No. 95 dated April 26, 2003). Such a loan can be repaid (a) by way of inward remittance through normal banking channel or (b) by debit to his NRE / FCNR (B) / NRO account or (c) out of rental income from such property. (d) by the borrower's close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower's loan account. Q.21. Can NRI/PIO avail of housing loan in rupees from his employer in India? A.21. Yes, subject to certain terms and conditions (Please refer to Regulat....
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....properties in respect of which sale proceeds can be repatriated by NRI / PIO? A.26. Yes, sale proceeds of not more than two residential properties can be repatriated. Q.27. If the immovable property was acquired by way of gift by the NRI/PIO, can he repatriate abroad the funds from sale? A.27. The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes. Q.28 If the immovable property was received as inheritance by the NRI/PIO can he repatriate the sale proceeds? A.28. Yes, general permission is available to the NRIs/PIO to repatriate the sale proceeds of the immovable property inherited from a person resident in India. NRIs/PIO may repatriate an amount not exceeding USD one million, per financial year, on production of documentary evidence in support of acquisition / inheritance of assets, an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.10/2002 dat....
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....rty / agricultural land/ plantation property / farm house in India without the approval of the Reserve Bank. Q. 32. In which account can the sale proceeds of such immovable property be credited ? A.32. The sale proceeds may be credited to NRO account. Q.33. Can the sale proceeds of the immovable property referred to in Q.No. 31 be remitted abroad ? A.33. Yes, provided the amount to be remitted does not exceed USD one million per financial year, for all bonafide purposes to the satisfaction of Authorised Dealers and subject to tax compliance. Q.34. Can foreign nationals of non-Indian origin resident in India or outside India who had earlier acquired immovable property under FERA with specific approval of Reserve Bank continue to hold the same? Can they transfer such property? A.34. Yes, they may continue to hold the immovable property. However, they can transfer the property only with the prior approval of Reserve Bank. Q.35. Is a resident in India governed by the provisions of Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations, 2000? A.35. A person resident in India who is a citizen of Pakistan or Bangladesh or Sri Lanka or Af....