NRI FAQ's

1. Who can purchase immovable property in India?
   The Reserve Bank of India (“RBI”) has granted general permission to the persons who are non-Resident Indian (NRI)- that is a citizen of India residing 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).
2. Whether NRI/PIO can acquire agricultural land/plantation property/farm house in India?
   General permission is not available to NRI/PIO to acquire agricultural land/plantation property/farm house in India. In special cases such proposals will require specific approval of RBI and the Government of India to own property in India.
3. How many residential/commercial properties can NRI/PIO purchase under the general permission?
   There are no restrictions on the number of residential/commercial properties that can be purchased.
4. How can an NRI/PIO make payment for purchase of residential/commercial property in India ?
   The payment can be made by NRI/PIO out of: funds remitted to India through normal banking channel; or 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. Further, no payment can be made outside India.
5. Can NRI/PIO avail of loan from an authorised dealer for acquiring flat/house in India for his own residential use against the security of funds held in his NRE Fixed Deposit account/FCNR (B) account?
   Yes, such loans are subject to the terms and conditions as laid down in Schedules 1 and 2 to Notification No. FEMA 5/2000-RB dated May 3, 2000 as amended from time to time. However, banks cannot grant fresh loans or renew existing loans in excess of Rs. 20 lakh against NRE and FCNR(B) deposits either to the depositors or to third parties.
6. 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?
   Yes, NRI/PIO can avail of housing loan in rupees from an Authorised Dealer or housing finance institution subject to certain terms and conditions. Such a loan can be repaid:
   • By way of inward remittance through normal banking channel; or
   • By debit to his NRE/FCNR (B)/NRO account; or
   • Out of rental income from such property.
   • 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.
7. Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?
   No, a foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he/she may take residential accommodation on lease provided the period of lease does not exceed five years. In such cases, there is no requirement of taking any permission of or reporting to RBI.
8. Can an office of a foreign company purchase immovable property in India?
   A foreign company which has established a branch office or other place of business in India, in accordance with FERA/FEMA regulations, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through proper banking channel.
9. Whether immovable property in India can be acquired by way of gift?
   Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from:
   a person residing in India or an NRI or 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.
10. Can an NRI/PIO sell his residential/commercial property?
    NRI can sell property in India to a person residing in India or an NRI or a PIO.
11. PIO can sell property in India to:
    A person residing in India or an NRI o a PIO – with the prior approval of RBI.
12. Can a non-resident gift his residential/commercial property?
    Yes, NRI/PIO may gift residential/commercial property to person resident in India or an NRI or PIO.
13. Can residential/commercial property be mortgaged?
    NRI/PIO can mortgage their residential/commercial property to:
    • an authorised dealer/housing finance
    • institution in India –without the approval of RBI.
    • a party abroad - with prior approval of RBI.
14. If the property was purchased from foreign inward remittance or from NRE/FCNR (B) account, can the sale proceeds of property be repatriated immediately?
    Yes.
15. Is there any restriction on number of residential properties in respect of which sale proceeds can be repatriated by NRI/PIO?
    Yes, sale proceeds of not more than two residential properties can be repatriated.
16. If the immovable property was acquired by way of gift by the NRI/PIO, can he repatriate abroad the funds from sale?
    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.
17. Can NRI/PIO rent out the residential/commercial property purchased out of foreign exchange/rupee funds?
    Yes, NRI/PIO can rent out the property without the approval of the RBI. Rent received can be credited to NRO/NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc.