FEMA provisions for transfer of immovable property for NRI

Ans.

Particulars From/To
Purchase from (other than agricultural land/ farmhouse/ plantation etc.) Resident/ NRI/ OCI
Acquire as gift (other than agricultural land/ farmhouse/ plantation etc.) Resident/ NRI/ OCI – who is a relative
Acquire (any IP) as inheritance a. Any person who has acquired it under laws in force;
b. Resident
Sell (other than agricultural land/ farmhouse/ plantation etc) Resident/ NRI/ OCI
Sell (agricultural land) Resident
Gift (other than agricultural land i.e. residential/ commercial property ) Resident/ NRI/ OCI
Gift (agricultural land) Resident

Ans. Payment can be made by NRI / OCI only out of funds remitted to India through normal banking channels or funds held in NRE / FCNR / NRO a/c maintained in India. Payments cannot be made through travellers’ cheque or foreign currency note.

Ans. NRI/OCI who has acquired immovable property in India under general permission is not required to file any documents with RBI.

Ans. There are no restrictions on the number of immovable properties that can be acquired. However, they can repatriate sales proceeds of only 2 residential properties outside India.

Ans. Yes, a person resident outside India (NRI/OCI) can inherit and hold immovable property in India from a person resident in India or Person resident outside India.
However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong and Democratic People’s Republic of Korea should seek specific approval of RBI.

Ans. Yes, he is permitted to inherit agricultural land property from his father who was also a non-resident provided the father had acquired the property in accordance with the Foreign Exchange laws in force.

Ans. The NRI/OCI may transfer agricultural land/ farm house/ plantation property in India, by way of gift or sale to a person resident in India, who is a citizen of India.

Ans. Yes, he may sell to a person resident in India/ NRI/ OCI.

Ans. Yes, he is eligible to sell an agricultural land to a person resident in India, even if the same was purchased by him while he was a Resident.

Ans. No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he may take immovable property on lease provided the period of lease does not exceed 5 years. In such cases, there is no requirement of taking any permission of or reporting to RBI. However, he is permitted to acquire one immovable property (other than agricultural land / plantation property / farm house) jointly with his spouse, provided the spouse is NRI or OCI and otherwise not prohibited from such acquisition and their marriage should have been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition of such property.

Ans. Yes, a foreign national who is a ‘person resident in India’ as per FEMA can acquire immovable property in India. However, Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong or Democratic People’s Republic of Korea (DPRK) would require prior approval of RBI.

Ans. Yes, NRIs/OCI can freely acquire immovable property (residential and commercial properties only) by way of gift either from a person resident in India, a NRI or OCI who is a relative defined in section 2(77) of the Companies Act,2013. However they are not permitted to acquire an agricultural land / plantation property / farm house 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.

Ans. Residential /Commercial property: NRI / OCI may gift residential/ commercial property to a person resident in India, NRI or OCI who is a relative as defined in section 2(77) of the Companies Act, 2013.

Foreign national of non-Indian origin requires prior approval of RBI for gifting the residential / commercial property.

Agricultural land / a plantation property / a farm house: NRI / OCI can gift agricultural land / a plantation property / a farm house only to a person resident in India who is a citizen of India. A foreign national would require prior approval of RBI

Ans. Yes, NRI/ OCI are permitted to obtain housing loans from AD, registered NBFC and other financial institutions as specified from RBI from time to time.

The loan shall be subject to the policy laid down by the Board of Directors of the AD and in compliance with prudential guidelines of RBI or terms and conditions as prescribed by RBI from time to time. The borrowed funds are not to be used for restricted end uses such as under:

  • In the business of chit fund or Nidhi Company;
  • Investment in capital market including margin trading and derivatives;
  • Agricultural or plantation activities;
  • Real estate activity or construction of farm houses; and
  • Trading in Transferrable Development Rights (TDR), where TDR shall have the meaning as assigned to it in the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2015.

Ans. Yes, subject to certain terms and conditions.

Ans.

  • NRI/ PIO can mortgage to:
  1. AD Bank/ registered NBFC/housing finance institution in India- without RBI approval
  2. A party abroad- with RBI prior approval
  • A company outside India in which NRI/OCI is a director, can avail loan from the overseas lender of the Indian AD Bank against mortgage of an immovable property in India owned by such NRI/OCI, subject to certain terms and conditions.
  • A foreign national of non-Indian origin can mortgage only with prior approval of RBI
  • A foreign company which has established a Branch Office or other place of business in accordance with FERA/ FEMA regulations has general permission to mortgage the property with an AD Bank in India.

Ans. Yes, he may repatriate sale proceeds of immovable property subject to below conditions:

• Amount to be freely repatriated should not exceed amount paid for acquisition of residential/ commercial property in foreign exchange, received through normal banking channel or by debit to FCNR a/c or NRE a/c.
• In case of residential property, repatriation of sale proceeds is restricted to 2 such properties
• Sale proceeds of residential/ commercial property in India acquired by way of debit to NRO a/c cannot be freely repatriated and sale proceeds should be credited to NRO a/c only. However, such sale proceeds can be transferred from NRO a/c to NRE a/c/ overseas a/c subject to the limit of USD 1 million per FY

Ans. The sale proceeds of immovable property acquired by way of gift should be credited to NRO a/c only. From balance in NRO a/c, NRI/OCI may remit up to USD 1 million, per FY, subject to satisfaction of AD Bank and payment of applicable taxes.

Ans. Yes, general permission is available to repatriate such sale proceeds. The amount of repatriation is restricted to USD 1 million per FY, subject to satisfaction of AD Bank and payment of applicable taxes.

In case of a foreign national, sale proceeds can be repatriated in similar manner if the property is inherited from a person resident in India.

Repatriation of sale proceeds in foreign exchange to Nepal and Bhutan is not permissible.

Ans. Yes, such foreign national on becoming person resident outside India can transfer such property to a person resident in India provided transaction takes place through banking channel in India and the resident is not otherwise prohibited from such acquisition.

To transfer such property to a Non-resident, foreign national would require prior RBI permission.

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