TaxTMI 
TaxTMI 
Master Direction – Acquisition and Transfer of Immovable Property under Foreign Exchange Management Act, 1999 (Updated as on September 01, 2022)
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.... time to time to incorporate the changes in the regulatory framework and published through amendment notifications. 2. Within the contours of the Rules and Regulations, Reserve Bank of India also issues directions to Authorised Persons under Section 11 of the Foreign Exchange Management Act (FEMA), 1999. These directions lay down the modalities as to how the foreign exchange business has to be conducted by the Authorised Persons with their customers/constituents with a view to implementing the regulations framed. 3. Instructions issued on acquisition of immovable property have been compiled in this Master Direction. The list of underlying circulars/ Rules and Regulations which form the basis of this Master Direction is furnished in the Appendix. Reporting instructions can be found in Master Directions on reporting (Master Direction No. 18 dated January 1, 2016) 4. It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Rules, Regulations or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Mas....
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....de India through banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency. 2.4 'Transfer' includes sale, purchase, mortgage, exchange, pledge, gift, loan or any other form of transfer of right, title, possession or lien. 2.5 'Relative' means relative as defined in section 2(77) of the Companies Act, 2013. 3. Acquisition/ transfer by a Non- Resident Indian (NRI) 3.1 8Acquisition of immovable property 3.1.1 9An NRI or an OCI can acquire by way of purchase any immovable property (other than agricultural land/ plantation property/ farm house) in India. 103.1.2 An NRI or an OCI can acquire by way of gift any immovable property (other than agricultural land/ plantation property/ farm house) in India from person resident in India or from an NRI or an OCI who is a relative as defined in section 2(77) of the Companies Act, 2013. 113.1.3 An NRI or an OCI can acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired the property in accordance with the provisions of the foreign exchange....
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.... (LTV) by the Central Government may purchase only one residential immovable property in India as dwelling unit for self-occupation and only one immovable property for self-employment. 5.2 The property should not be located in and around restricted/ protected areas so notified by the Central Government and cantonment areas. 5.3 The person should submit a declaration to the Revenue Authority of the district where the property is located specifying the source of funds and that he/ she is residing in India on a LTV. 5.4 The registration documents of the property should mention the nationality and the fact that such person is on a LTV. 5.5 The property of such person may be attached/ confiscated in the event of his/ her indulgence in anti-India activities. 5.6 A copy of the documents of the purchased property shall be submitted to the Deputy Commissioner of Police (DCP)/ Foreigners Registration Office (FRO)/ Foreigners Regional Registration Office (FRRO) concerned and to the Ministry of Home Affairs (Foreigners Division). 5.7 Sale of the immovable property so acquired is permissible only after such person has acquired Indian citizenship. However, transfer of such immovable proper....
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....antation property in India by 21a PIO resident outside India [who held property in India in terms of the erstwhile FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2000] or an NRI or an OCI, the Authorised Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely: * 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;22 * 23the amount for acquisition of the immovable property was paid in foreign exchange received through banking channels or out of funds held in FCNR(B) account or NRE account; In case an immovable property in India has been purchased by 24a PIO resident outside India [who held property in India in terms of the erstwhile FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2000] or an NRI or a OCI out of housing loans availed in terms of Foreign Exchange Management (Borrowing and lending in rupees) Regulations, 2000, as amended from time to time, and the repayments for such loans are made out of remittances received from abroad through banking channel....
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....erseas lender may create a mortgage on an immovable property in India owned by an NRI or an OCI who is a director of a company outside India, for a loan to be availed by the company outside India from the said overseas lender subject to the following conditions: (a)The funds should be used by the borrowing company only for its core business purposes overseas; and (b)In case of invocation of charge the authorised dealer should sell the immovable property to an eligible acquirer and remit the sale proceeds to the overseas lender. 2910.3 A person resident outside India who has acquired any immovable property in India in accordance with foreign exchange laws in force at the time of such acquisition or with the general or specific permission of the Reserve Bank may transfer such property to a person resident in India provided the transaction takes place through banking channels in India and provided that the resident is not otherwise prohibited from such acquisition. 10.4 Any transfer of property not covered in these directions will require the prior permission of the Reserve Bank. 10.5 As per Government of India Press Release dated February 1, 2009, (given in the annex) in order t....
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....purchase already made to determine their compliance with legal requirements. Further, persons acquiring immovable property have to fulfil the requirements, if any, prescribed by the State authorities. A foreign company which has established a Branch Office or other place of business in India under the provisions of Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of Business) Regulations, 2000 (FEMA 22/2000-RB dated the 3rd May, 2000) can acquire immovable property in India which is necessary for or incidental to carrying on such activity, subject to the conditions stipulated in Regulation 5 of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 (Notification No. 21/2000-RBdated the 3rd May, 2000). Apart from above, a foreign national who is residing in India for more than 182 days during the course of the preceding financial year for taking up employment or carrying on business / vocation or for any other purpose indicating 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 b....
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....acquisition and transfer of Immovable property shall be governed accordingly. 5 Notification No. FEMA 21R has been superseded by FEM (NDI) Rules, 2019 6 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion, it read as "A 'Non-Resident Indian' (NRI) is a citizen of India resident outside India." 7 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion it read as, "A 'Person of Indian Origin' means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who 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)." 8 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion, it....
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....g channels by way of inward remittance from any place outside India or by debit to his NRE/ FCNR (B)/ NRO account." 17 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion, it read as, "4. Acquisition/ transfer by a Person of Indian Origin (PIO) 4.1 Purchase of immovable property A PIO resident outside India can acquire by way of purchase any immovable property (other than agricultural land/ plantation property / farm house) in India. 4.2 Gift/ Inheritance of immovable property A PIO resident outside India may acquire (a) any immovable property (other than agricultural land/ plantation property/ farm house) in India by way of gift from a person resident in India or an NRI or a PIO resident outside India; (b) any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force or FEMA regulations, at the time of acquisition of the property or from a person resident in India. 4.3 Transfer of immovable property A PIO resident ou....
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.... 2000." 23 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion it read as, "the amount to be repatriated does not exceed the amount paid for acquisition of the immovable property received through normal banking channels or out of funds held in FCNR(B) account or NRE account." 24 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion it read as, "an NRI/ PIO" 25 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. 26 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion it read as, "Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong cannot, without prior permission of the Reserve Bank, acquire or transfer immovable property in India, other than....