Property Purchase Property Sale Repatriation


Property Purchase

Acquisition of Immovable Property in India

 

Who can purchase immovable property in India?


A.1 Under the general permission available, the following can purchase immovable property in India:
i) Non-Resident Indian (NRI
ii) Person of Indian Origin (PIO)-

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

Whether NRI/PIO can acquire agricultural land/ plantation property / farm house in India?


Such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India.

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.

Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?


No.

Mode of payment for purchase/loan


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


Following options exist for making payment for purchase of the property
(a) funds remitted to India through normal banking channel or
(b) funds held in NRE / FCNR (B) / NRO account maintained in India

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. 

Such loans can be repaid


(a) by way of inward remittance through normal banking channel or
(b) by debit to his NRE / FCNR (B) / NRO account or
(c) out of rental income from such property.
(d) 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.

 


Property Sale

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


Yes. Reserve Bank of India has granted general permission for sale of such property.

Can an agricultural land / plantation property / farm house in India owned / held by a non-resident be sold?


NRI / PIO may sell agricultural land /plantation property/farm house to a person resident in India who is a citizen of India.
 
Can a non-resident gift his residential / commercial property?


Yes, NRI / PIO may gift residential / commercial property.

 


Repatriation

Property acquired of foreign Exchange source


In case the amount has been received from inward remittance or debit to NRE/FCNR(B)/NRO account for acquiring the property or for repayment of the loan, the principal amount can be repatriated outside India. Any Capital Gain is credited to NRO A/C. However, repatriation of sale proceeds purchased out of foreign exchange is restricted to not more that two residential properties, in a block of one year.

 

Property acquired out of Rupee source


In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India ( as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account.
NRI/PIO are also allowed by the Authorised Dealers to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account for all bonafide purposes to the satisfaction of the authorised dealers, subject to tax compliance.

 

Repatriation of rental income


Repatriation of income derived out of letting of immovable property is permissible. NRI/PIO can rent out the property without approval of Reserve Bank. 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, interest, dividend etc. of NRI/PIO who do not maintain an NRO account is based on an appropriate certification by Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/ provided for.
For answers to your questions please contact Concept Tree at info@ctreeconsulting.com

 




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