NRI’s CORNER

Foreigners & NRIs

As an NRI, you need no permissions to buy property in India. You can also rent out the property and repatriate your rental proceeds, subject to payment of taxes.

Please remember that an NRI who is an Indian Citizen can sell his Immovable Property (other than agricultural or plantation property or farmhouse) to another NRI. However, the transaction has to be routed through India only. In other words, the buyer has to invest in India by way of remittance from abroad through normal banking channels or by debit to his account maintained with an authorised dealer.

The Sale proceeds of the property must be credited to your bank accounts maintained with an authorized dealer in India. Ratnawali extends their full support to foreigners and/or NRIs and help them buy properties in India.

 

NRI Investment

  • +NRI INVESTMENT IN REAL ESTATE REGULATED BY FEMA
    All NRI investments in real estate or immovable properties are considered as transactions that gets regulated under the FEMA. This is essentially because 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.

  • +CAPITAL ACCOUNT TRANSACTIONS
    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.

  • +NRI REGULATIONS FOR PURCHASE OF PROPERTY
    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 he 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.

    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 he 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.

  • +NRI REGULATION FOR SALE OF PROPERTY
    NRI desiring to sell property within India has a lock in period of three years. That is, NRI under theFEMA regulations is allowed to sell property only after three years from the date of acquisition for the property or from the date of payment of the final installment of the consideration for its acquisition, whichever is later.

  • +REPATRIATION OR REALTY RETURNS OR SALE PROCEEDS
    It is easier to bring money into the country. Getting out has a number of bottlenecks, which is a constant disappointment for the NRI community. FEMA says no matter what the proceeds of the sale may be, the amount for repatriation should not exceed the amount paid for acquisition of the immovable property in foreign exchange received through the normal banking channels or out of funds held in foreign currency Non- Resident Accounts. The repatriation of sale proceeds is restricted to only two properties. NRIs are also restricted from repatriating returns form real estate investments in the form of dividends.

  • +PURCHASE ETC, OF IMMOVABLE PROPERTY IN INDIA
    The Foreign Exchange Management Act, 1999 (FEMA), came in force with effect from June 1, 2000. Section 6(3)(i) of the Act empowers the Reserve Bank to frame regulations to prohibit, restrict or regulate the acquisition or transfer of immovable property in India by certain persons mainly residents outside India. The restrictions under this clause are not applicable to a lease of immovable property for a period not exceeding five years. The regulations made by the Reserve Bank are called Foreign Exchange Management (Acquisition and Transfer of Immovable property in India) Regulations, 2000, and have been notified vide Notification FEMA No.21/2000-RB of May 3,2000. Full text of the Notification is available on the Bank’s website.

 

FAQ’s
  • +DO NRIS NEED PERMISSIONS TO BUY PROPERTY IN INDIA?
    As an NRI, you need no permissions to buy property in India. You can also rent out the property and repatriate your rental proceeds, subject to payment of taxes. Please remember that an NRI who is an Indian Citizen can sell his/her immovable Property (other than agricultural or plantation property or farmhouse) to another NRI. However, the transaction has to be routed through India only. In other words, the buyer has to invest in India by way of remittance from abroad through normal banking channels or by debit to his account maintained with an authorized dealer.

    The sale proceeds of the property must be credited to your bank accounts maintained with an authorized dealer in India.

  • +ARE THERE ANY PROCEDURES TO BUY PROPERTY IN INDIA?
    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.

    All NRI investments in real estate or immovable properties are considered as transactions that get regulated under the FEMA (Foreign Exchange Management Act). It 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.



  • +CAN I, AS A FOREIGNER, BUY PROPERTY IN INDIA?
    Persons who are not citizens of India, and companies (other than banking companies), which are not incorporated in India, are required to obtain prior permission of the Reserve Bank of India to acquire, hold, transfer or dispose of property. (Refer Section 31 (1) of FERA (Foreign Exchange Regulations Act, 1973).

    This also applies to partnership firms where one of the partners is a foreign national.