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NRI Guide

Bangalore has seen an increasing trend in real estate investments over the past few years and this year 2014 seems to be promising one. Despite a slump in the global economy last year India and especially Bangalore has seen some key foreign investments.

Bangalore is one of the IT prime cities and has several Special Economic Zones in its corners. IT sector has seen strong support from the local government and hence is growing undeterred. This has created lot of demand for real estate housing and commercial establishments in and around the IT hubs.

North Bangalore is enhanced with good connectivity like signal free elevated toll road, Six lane national highway and High speed rail link and it is also the hub for the upcoming industrial, infrastructure and SEZ’s, Thereby, assuring high returns for valuable investments.


Who is an NRI ?

A Non Resident Indian (NRI) as per India’s Foreign Exchange Management Act 1999 (FEMA), is an Indian citizen or Foreign National of Indian Origin resident outside India for purposes of employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period. An Individual will also be considered NRI if his stay in India is less than 182 days during the preceding financial year.


Who is a PIO ?

A person who is not a citizen of India is deemed to be of Indian origin if he is not a citizen of Pakistan or Bangladesh and if he at any time held an Indian passport; or he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955.

A spouse (not being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a Person of Indian Origin is also treated as a Person of Indian Origin for the purpose of NRI deposits if the accounts are held jointly with the NRI / PIO spouse. PIOs are extended the same facilities for bank account maintenance in India as NRIs and are also, for such purposes, called by the generic name as NRIs.


Who can purchase immovable property in India ?

Under the general permission available, the following categories can purchase immovable property in India:

  • Non-Resident Indian (NRI)
  • Person of Indian Origin (PIO)

The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land/plantation property/farm house in India.


Do NRIs and PIOs require permission of Reserve Bank to acquire residential/commercial property in India ?

NRIs and POIs do not require permission from RBI to acquire residential / commercial premises in India (other than agricultural land/farm house/plantation property). A person resident outside India acquiring property to carry on business from India has to file with the Reserve Bank a declaration in Form IPI within ninety days from the date of acquisition of immovable property. A citizen of Pakistan , Bangladesh , Sri Lanka , Afghanistan , China , Iran , Nepal or Bhutan cannot acquire immovable property without prior permission of Reserve Bank. However, he can take on lease an immovable property for not more than 5 years.


Can a NRI / PIO acquire immovable property in India by way of gift ?

Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from

  • A person resident in India; or
  • A NRI; or
  • A PIO

However, the property can only be commercial or residential in nature. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift.

Can a foreign national acquire immovable property in India by way of gift ?

A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.


Are any documents required to be filled with the Reserve Bank after the purchase ?

No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank.


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.


8. Can an NRI/ PIO/foreign national sell his residential / commercial property ?

i. NRI can sell property in India to

  • A person resident in India; or
  • An NRI; or
  • A PIO

ii. PIO can sell property in India to

  • A person resident in India; or
  • An NRI; or
  • A PIO – with the prior approval of the Reserve Bank

iii. Foreign national of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan can sell property in India with prior approval of the Reserve Bank to

  • A person resident in India
  • An NRI
  • A PIO

How can an NRI / PIO make payment for purchase of residential / commercial property in India ?

Payment can be made by NRI / PIO out of:

  • funds remitted to India through normal banking channels 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 or by other mode except those specifically mentioned above.


What guidelines for housing loans to NRI's has Reserve Bank of India issued ?

Guidelines for granting housing loans to Non-Resident Indians, Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.

Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.


In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission ?

The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.


Can NRIs obtain loans for acquisition of a house/flat for residential purpose from authorised dealers/financial institutions providing housing finance ?

Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the borrower's NRE/FCNR/NRO accounts.

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