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Q. Do non-resident Indian citizens
require permission of Reserve Bank to acquire residential/commercial
properly in India?
Ans. No
Q. Do foreign citizens of Indian origin require permission of Reserve
Bank to purchase immovable property in India for their residential use?
Ans. Yes. However, Reserve Bank has granted general permission to
foreign citizens of Indian origin, whether resident in India or abroad,
to purchase immovable property in India for their bona fide residential
purpose. They are,therefore,not required to obtain separate permission
of Reserve Bank.
Q. In what manner the purchase consideration for the residential
immovable property should be paid by foreign citizens of Indian origin
under the general permission?.
Ans. The purchase consideration should be met either out of inward
remittances in foreign exchange through normal banking channels or out
of funds from NTE/FCNR accounts maintained with banks in India.
Q. What are the formalities required to be completed by foreign
citizens of Indian origin for purchasing residential immovable property
in India under the general permission.
Ans. They are required to file a declaration in form IPI 7 with the
Central Office of Reserve Bank at Mumbai within a period of 90 days from
the date of purchase of immovable property or final payment of purchase
consideration alongwith a certified copy of the document evidencing the
transaction and bank certificate regarding the consideration paid.
Q. Can such property be sold without the permission of Reserve Bank?
Ans. Yes. Reserve Bank has granted general permission for sale of
such property. However, where the property is purchased by another
foreign citizen of Indian origin, funds towards the purchase
consideration should either be remitted to India or paid out of balances
in NRE/FCNR accounts.
Q. Can sale proceeds of such property if and when sold be remitted
out of India?
Ans. In respect of residential properties purchased on or after 26th
May,1993, Reserve Bank considers applications for repatriation of sale
proceeds up to the consideration amount remitted in foreign exchange for
the acquisition of the property for two such properties. The balance
amount of sale proceeds if any or sale proceeds in respect of properties
purchased prior to 26th May,1993, will have to be credited to the
ordinary non-resident rupee account of the owner of the property.
Q. Are any conditions required to be fulfilled if repatriation of
sale proceeds is desired?
Ans. Applications for repatriation of sale proceeds are considered
provided the sale takes place after three years from the date of final
purchase deed or from the date of payment of final instalment of
consideration amount, whichever is later.
Q. What is the procedure for seeking such repatriation?
Ans. Applications for necessary permission for remittance of sale
proceeds should be made in form IPI 8 to the Central Office of Reserve
Bank at Mumbai within 90 days of the sale of the property.
Q. Can foreign citizens of Indian origin acquire or dispose of
residential property by way of gift?
Ans. Yes. Reserve Bank has granted general permission to foreign
citizens of Indian origin to acquire or dispose of properties up to two
houses by way of gift from or to a relative who may be an Indian citizen
or a person of Indian origin whether resident in India or not,provided
gift tax has been paid.
Q. Can foreign citizens of Indian origin acquire commercial
properties in India?
Ans. Yes. Under the general permission granted by Reserve Bank
properties other than agricultural land/farm house/plantation property
can be acquired by foreign citizens of Indian origin provided the
purchase consideration is met either out of inward remittances in
foreign exchange through normal banking channels or out of funds from
the purchasers' 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.
Q. Can they dispose of such properties?
Ans. Yes.
Q. Can sale proceeds of such property be remitted out of India?
Ans. Yes. Repatriation of original investment in respect of
properties purchased by foreign citizens of Indian origin on or after
26th May 1993 will be allowed to be remitted up to the consideration
amount originally remitted from abroad provided the property is sold
after a period of three years from the date of the final purchase deed
or from the date of payment of final instalment of consideration
amount,whichever is later. Applications for the purpose are required to
be made to the Central Office of Reserve Bank within 90 days of the sale
of property in form IPI 8.
Q. Can the properties (residential/commercial) be given on rent if
not required for immediate use?
Ans. Yes. Reserve Bank has granted general permission for letting
out of any immovable property in India. The rental income or proceeds of
any investment of such income has to be credited to NRO account.
Q. Can NRIs obtain loans for acquisition of a house/flat for
residential purpose from financial institutions providing housing
finance?
Ans. Reserve Bank has granted general permission to certain
financial institutions providing housing finance e.g. HDFC,LIC Housing
Finance Ltd.,etc. to grant housing loans to non-resident Indian
nationals for acquisition of houses/flats for self-occupation subject to
certain conditions.
Q. Can authorised dealer grant loans to NRIs for acquisition of a
flat/house for residential purposes?
Ans. Authorised dealers have been granted permission to grant loans
up to non-resident Indian nationals for acquisition of house/flat for
self-occupation on their return to India subject to certain conditions.
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 investments' NRE/FCNR accounts.
Q. Can Indian companies grant loans to their NRI staff?
Ans. Reserve Bank permits Indian firms/companies to grant housing
loans to their employees deputed abroad and holding Indian passport
subject to certain conditions.
Source: Reserve Bank of India
Q. What are the options available for obtaining guarantors while
applying for a HDFC/LIC loan
Ans. One will need a guarantor for a loan mainly for collateral
security. The guarantor will have to demonstrate appropriate networth to
cover for the loan. Usually one can have a guarantor in any city where
the loan issuer has a branch. Talk to loan issuers they will work
something out for NRIs and foreign banks.
Q. While purchasing real estate most developers demand a Power of
Attorney in their favor, is there a way to avoid it?
Ans. One can choose not to grant the Power of Attorney (POA) to the
developers. However this will mandate the mailing of all documents to
your foreign residence and associated time delays. A good compromise is
to grant the POA to the builder only for specific necessary items.
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