A person of Indian origin means a foreign citizen (other than a citizen of Pakistan or Bangla desh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who: - held an Indian Passport at any time, or - whose father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955

Under the general permission available, the following categories can freely make purchases in immovable property in India :

• Non-Resident Indian (NRI) - that is a citizen of India resident outside India
• 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
  • At any time, held Indian passport, or
  • 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

Yes, under the general permission granted by the Reserve Bank of India, property other than agricultural land / farm house / plantation property can be acquired by NRIs provided the purchase consideration is met either out of inward payment 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.

Yes

Yes

The Reserve Bank has granted some general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorised dealers to grant housing loans to NRI nationals for acquisition of a NRI house / flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors' NRE / FCNR / NRO accounts.

All NRI investments in real estate or immovable properties are considered as transactions that get regulated under the FEMA. This is essential as an NRI would be dealing with foreign exchange. It is considered to be a type of transaction which is bound to have some international financial implication. The current account transactions or capital account transactions of the NRI which are used to make investments in real estate thus gets automatically regulated under FEMA. Current Account Transaction consists of payments due as interest on loans and net income from investments.

To read more on FEMA visit www.rbi.org.in/scripts/Fema.aspx

Capital Account Transactions means transactions which alters the assets or liabilities, including contingent liabilities outside India of an NRI. It includes transactions involving acquisitions or transfers of immovable property outside India, other than a lease not exceeding five years by an NRI or a resident, remittances outside India of capital assets of an NRI and foreign currency accounts in India of a person resident outside India. Even deposits between a person resident in India and a person resident outside India are considered as capital account transactions.

The Reserve Bank has granted a blanket permission to NRIs to purchase property in India for their residential and commercial purposes. There is also no limit on the number of investments or the quantity of investments that can be made in real estate. The immovable property can be purchased by inward remittances from any place outside India or through funds maintained in NRI accounts in the banks within the country.

FEMA stipulates that before making a purchase a specified form called the IPI 7 needs to be filed with the central office of the RBI along with the title deed or any other certified copy of the document proving that the NRI has executed an agreement to purchase property within the country. The form has to be filed within 90 days of the purchase of property and has to be accompanied with a bank certificate stating the consideration paid for the purchase. Permissions are generally granted without undue delays if all the relevant papers are submitted.