According to the Foreign Exchange Management Act (FEMA) of 1999, an Indian Citizen who stays abroad for employment/business or stays outside the country for an indefinite period is considered to be an NRI. (Persons Posted in U.N. organizations and official deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as nonresidents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs).
PIO is a person of Indian origin whose ancestors were born in India and he/she has an Indian ancestry but not an Indian citizenship. As per the FEMA of 1999, a person of Indian origin can avail bank accounts, invest in shares and securities in India. So, he or she
- has had Indian Passport at any time
- himself/herself, parents or grandparents were Indian citizens (of the Constitution of India or Citizenship Act, 1955 (57 of 1955)
- is a spouse of an Indian citizen or a person who held an Indian Passport at any time
- is a spouse of a person who either was a citizen of India or his parents or grandparents were a citizen of India
According to the RBI guide lines, an NRI/PIO can acquire a residential property in India by a way of gift from an Indian, NRI/PIO or purchase it. He or she can even acquire residential property by way of inheritance from a person who is a resident of India as per the Provisions of Section 6(5) of the FEMA, 1999.
The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land / plantation property / farmhouse in India.
When NRIs/PIOs purchase an immovable residential property under general permission they are not required to file any documents with the Reserve Bank of India.
No, there aren’t any restrictions.
Yes, under the general permission granted by the Reserve Bank, property other than agricultural land/farm house/plantation property can be acquired by NRIs provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser’s 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.
Yes, the Reserve Bank has granted general permission to NRIs to acquire or dispose of NRI India Properties by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin (PIO) whether resident in India or not.
The Reserve Bank has granted some general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to NRI nationals for acquisition of a NRI house/flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. 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 investors’ NRE/FCNR/NRO accounts.
Under the general permission, an NRI/PIO may purchase a residential property in India by funds remitted to India through normal banking channel or funds held in his/her NRE/FCNR (B)NRO accounts. No consideration shall be paid outside India.
Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank.
There are no restrictions on the number of residential / commercial properties that can be purchased.
NRIs and PIOs are required to file a declaration in a form IPI 7 with the Central Office of Reserve Bank at Mumbai (within a period of 90 days) from the date of purchase of the property or final payment of the purchase consideration along with a certified copy of the document which would be an evidence of the transaction and bank certificate regarding the consideration paid.
(a) When an NRI/PIO sells an immovable property other than agricultural land / farm house / plantation property, the authorised dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are followed:
(i) The immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these regulations
(ii) The amount to be repatriated does not exceed:
- The amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels
- The amount paid out of funds held in Foreign Currency Non-Resident Account
- The foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property
(iii) In the case of a residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
(A) Repatriation outside India means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency.
(B) 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 $(US) 1 million per financial year out of the balance in the NRO account / sale proceeds of assets through purchase / the assets in India acquired by him through inheritance / legacy. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 in any financial year requires prior permission of the Reserve Bank.
(C) A person referred to in sub-section (5) of Section 6 of the Foreign Exchange Management Act 3 , or his successor shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section.
NRI/PIO may repatriate up to US $ 1 million per financial year (April-March) from their NRO account which would also include the sale proceeds of immovable property. There is no lock in period for sale of immovable property and repatriation of sale proceeds outside India.
A Power Of Attorney (POA) or letter of attorney is a written authorization to represent or act on another’s behalf in private affairs, business, or some other legal matter, sometimes against the wishes of the other. The person authorizing the other to act is the principal, grantor, or donor (of the power). A Power Of Attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property.
A Power Of Attorney, or letter of attorney, is a document that authorizes another person, known as the agent or attorney-in-fact—usually a legally competent relative or close friend over 18 years old—to handle any combination of financial, legal and health care decisions. A power of attorney is also referred to as a POA. Generally, one chooses a POA as a provision if he or she becomes incapacitated.
If you are looking to buy your property with a Home Loan then it is even better, as you could save on a lot of down payment from your personal account. Usually, you could get a loan of around 85 to 90% of the property agreement value.
A pre-approval of your home loan is mandatory to know how much eligibility you have and based on this letter from the bank you can go ahead and book any property.
Your personal documents required for your Home Loan Pre-Approval only.
Disbursement of the loan amount will happen only when you buy the property.
We request you to carry a copy of these documents with you or scan and email it to us so that we could begin the paper work. (This is not shared with any third party and these are kept as confidential documents.)
Salaried (Non Resident Indian)
a) Two photographs of both the applicant and the co-applicant with signature on front and back.
b) Copy of Passport. (Along with latest Visa Stamp and Date of Entry stamp) Proof of residence in India. (Electricity / Telephone Bill / Ration Card / Society Maintenance Bill / LIC Policy / Mobile Bill / Utility Bill e.g Gas Supply bill) Proof of residence in Abroad. (Electricity / Telephone Bill / Mobile Bill / Utility Bill e.g. Gas Supply bill / Driving License) Copy of Identity card / Social Security Card / Work Permit (Hikama) Copy of Credit Card (front & back) Last 06 months bank statements of all the NRE / NRO Account in India.
c) Last 06 months bank statements of Bank Account held abroad where salary is credited
d) Copy of Contract / Employment Certificate Copy of Annual Salary Certificate specifying the mode of payment (If payment is fully or partly received in cash) Salary Slips for the immediately past 06 months.
e) Copies of Sanction Letter of Loans if availed in India and abroad
f) Self Declaration of Residential Status
Please note that all the above documents need to be certified by the INDIAN EMBASSY abroad
Documents relating to Income / Salary needs to be attested as True by your Employer.
All documents in foreign language need to be translated in English.
Pan Card Application
It is advisable to apply for Permanent Account Number with the Income Tax so that in future you can easily receive rent and even repatriate money.
Inform ThePropertyLaunch.com about your proposed date of arrival and dates to see the properties in Mumbai, Thane or Navi Mumbai. We will be able to take you through the entire projects etc as required.
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