Help Desk

Homebuilders in India help you with these guidelines which has been prepared for investment properties in India in order to address various issues relating to acquisition and transfer of immovable residential property in India by a person resident outside India under the provisions of the Foreign Exchange Management Act, 1999. These FAQs seek to cover the broad spectrum of issues relating to acquisition and transfer of immovable property in India by a non-resident Indian (NRI) or a foreign national of Indian origin (PIO) or a foreign national of non-Indian origin as also by a person resident in India who is not a citizen of India.

FAQs

Q. Where can one find regulations/directions issued by Reserve Bank for acquisition and transfer of immovable property in India by a person resident outside India?
A. Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India have been notified vide RBI Notification No. FEMA 21/2000-RB dated May 3, 2000 as amended vide Notification No. FEMA 64/2002-RB dated June 29, 2002 and Notification No. FEMA 65/2002-RB dated June 29, 2002 and relevant directions issued in the form of A.P. (DIR Series) Circulars. These are available on RBI website: www.fema.rbi.org.in

Q. Under the extant foreign exchange regulations to whom is general permission available for purchase immovable property in India?
A. General Permission is available to purchase only a residential/commercial property in India to a person resident outside India who is a citizen of India (NRI) and who is a Person of Indian Origin (PIO).

Q .Who is a Person of Indian Origin (PIO)?
A. For the purpose of acquisition and transfer of immovable property in India, a PIO means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (i) at any time, held Indian passport; or (ii) 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).

Q . Is NRI/PIO who has purchased residential or commercial property in India under general permission required to file any documents with Reserve Bank of India?
A. NRI/PIO who has purchased residential or commercial property under general permission is not required to file any documents with the Reserve Bank.

Q . Is there any restriction on number of residential or commercial property that NRI/PIO can purchase under the general permission available?
A. There is no restriction on number of residential or commercial property that NRI/PIO can purchase under the general permission available.

Q . Can a name of a foreign national of non-Indian origin be added as a second holder to a residential or commercial property purchased by NRI/PIO?
A. No.

Q . Can a foreign national of non-Indian origin resident outside India acquire any immovable property in India by way of purchase?
A. No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer’ includes among others, ‘purchase’. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of purchase.

Q . Can a foreign national of non-Indian origin acquire residential property on a lease in India?
A. Yes. A 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 may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission of Reserve Bank of India.

Q . Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of purchase?
A. No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.

Q . Can NRI/PIO acquire residential or commercial property by way of gift under the general permission available?
A. Yes. Under general permission available NRI/PIO may acquire residential/commercial property by way of gift from a person resident in India or a NRI or a PIO.

Q . Can a foreign national of non-Indian origin resident outside India acquire residential/commercial in India by way of gift?
A. No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer’ includes among others, ‘gift’. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire residential/commercial property in India by way of gift.

Q . Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of gift?
A. Yes. A person resident outside India can hold immovable property acquired by way of inheritance from a person resident in India as per the provisions of Section 6(5) of the Foreign Exchange Management Act, 1999

Q . Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable property in India acquired by way of inheritance from a person resident in India?
A. Yes. A person resident outside India can hold immovable property acquired by way of inheritance from a person resident in India as per the provisions of Section 6(5) of the Foreign Exchange Management Act, 1999.

Q . Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable residential property in India acquired by way of inheritance from a person resident outside India?
A. With the specific approval of Reserve Bank a person resident outside India may hold any immovable property in India acquired by way of inheritance from a person resident outside India, provided the bequeathor had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations.

Q . Under general permission available to whom can NRI transfer by way of sale his residential/commercial property?
A. NRI can transfer by way of sale residential/commercial property in India to a person resident in India or to a NRI or a PIO. Under general permission available to whom can a PIO transfer his residential/commercial property by way of sale? PIO can transfer by way of sale residential/commercial property in India only to a person resident in India.

Q . Can a PIO transfer by way of sale his residential/commercial property to a NRI or a PIO?
A. No. He would need to seek Reserve Bank prior approval for transfer by way of sale residential/commercial property in India to a NRI or a PIO.

Q . Can a foreign national of non-Indian origin whether resident in India or outside India transfer by way of sale residential/property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India?
A. No. A foreign national of non-Indian origin whether resident in India or outside India would need to seek prior approval of Reserve Bank for transfer by way of sale residential/property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India.

Q . Under general permission available to whom can NRI/PIO transfer by way of sale his agricultural land/plantation property/farm house in India?
A. Under the general permission available NRI/PIO may transfer by way of sale his agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.

Q . Can a foreign national of non-Indian origin resident outside India transfer by way of sale agricultural land/plantation property/farm house acquired by him in India?
A. A foreign national of non-Indian origin resident outside India would need to seek prior approval of Reserve Bank for transfer, by way of sale, agricultural land/plantation property/farm house acquired in India

Q . Under general permission available can NRI/PIO transfer his residential or commercial property by way of gift?
A. Yes. NRI/PIO may transfer by way of gift residential/commercial property in India to a person resident in India or to a NRI or a PIO.

Q . Under general permission available to whom can NRI/PIO transfer by way of gift agricultural land/plantation property/farm house in India?
A. Under the general permission available NRI/PIO may transfer by way of gift agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.

Q . Can a foreign national of non-Indian origin resident outside India transfer by way of gift agricultural land/plantation property/farm house acquired by him in India?
A. No. A foreign national of non-Indian origin resident outside India would need to seek prior approval of Reserve Bank for transfer by way of gift agricultural land/plantation property/farm house acquired by him in India.

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