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Acquisition of immovable property in India by persons resident outside India (foreign national) is regulated in terms of section 6 (3) (i) of the Foreign Exchange Management Act (FEMA), 1999 as well as by the regulations contained in the Notification No. FEMA 21/2000-RB dated May 3, 2000, as amended from time to time. Section 2 (v) and Section 2 (w) of FEMA, 1999 defines `person resident in India’ and a `person resident outside India’, respectively. Person resident outside India is categorized as Non- Resident Indian (NRI) or a foreign national of Indian Origin (PIO) or a foreign national of non-Indian origin.

The Reserve Bank does not determine the residential status. Under FEMA, residential status is determined by operation of law. The onus is on an individual to prove his / her residential status, if questioned by any authority.

A person resident in India who is not a citizen of India is also covered by the relevant Notifications.

In terms of the provisions of Section 6(5) of FEMA 1999, a person resident outside India can hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was a resident in India or inherited from a person who was a resident in India.

The regulations under Notification No. FEMA 21/2000-RB dated May 3, 2000, as amended from time to time, permit a NRI or a PIO to acquire immovable property in India, other than agricultural land or, plantation property or farm house. Further, foreign companies who have been permitted to open a Branch or Project Office in India are also allowed to acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. Such dispensation is however not available to entities which are permitted to open liaison offices in India.

The restrictions on acquiring immovable property in India by a person resident outside India would not apply where the immovable property is proposed to be acquired by way of a lease for a period not exceeding 5 years or where a person is deemed to be resident in India.

In order to be deemed to be a person resident in India, from FEMA angle, the person would need to comply with the provisions of Section 2(v) of FEMA 1999. The Press Release dated February 1, 2009 issued by Government of India in this regard is enclosed as Annex.

Note: Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan cannot acquire or transfer immovable property in India, (other than on lease not exceeding five years) without the prior permission of the Reserve Bank.

NRIs/ PIOs are allowed to repatriate an amount up to USD one million, per financial year (April-March), out of the balances held in the Non-Resident (Ordinary) Rupee (NRO) account, subject to compliance with applicable tax requirements. This amount includes sale proceeds of assets acquired by way of inheritance or settlement.

The FAQs cover the following topics :

A. Acquisition of Immovable Property in India by a person resident outside India, i.e., by a NRI / PIO / foreign national of non-Indian origin by way of purchase / gift / inheritance.

B. Transfer of immovable property in India by a person resident outside India by way of

i) Sale

ii) Gift

 iii) Mortgage

C. Mode of payment for purchase of immovable property in India.

D. Repatriation of sale proceeds of residential / commercial property, in India, outside India acquired by NRI / PIO by way of

i) Purchased

ii) Gift

 iii) Inheritance

E. Provisions for Foreign Embassies / Diplomats / Consulates General

F. Other Aspects.

A. Acquisition of Immovable Property in India through purchase / gift/ inheritance

1. Who can purchase immovable property in India?

2. Can NRI/PIO acquire agricultural land/ plantation property / farm house in India?

3. Are any documents required to be filed with the Reserve Bank after the purchase?

4. How many residential / commercial properties can NRI / PIO purchase under the general permission?

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

6. Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?

7. Can a foreign national who is a person resident in India purchase immovable property in India?

8. Can the branch / liaison office of a foreign company purchase immovable property in India?

9. Can a NRI/PIO acquire immovable property in India by way of gift? Can a foreign national acquire immovable property in India by way of gift?

10. Can a non-resident inherit immovable property in India?

11. From whom can a non-resident person inherit immovable property?

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

13. Can a non-resident owning / holding an agricultural land / a plantation property / a farm house in India sell the said property?

14. Can a non-resident gift his residential / commercial property?

15. Can an NRI / PIO / foreign national holding an agricultural land / a plantation property / a farm house in India, gift the same?

16. Can residential / commercial property be mortgaged by NRI/ PIO?

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

18. Is repatriation of application money for booking of flat / payment made to the builder by NRI/ PIO allowed when the flat or plot is not allotted or the booking / contract is cancelled?

19. 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? How the loan can be repaid?

20. Can NRI / PIO, avail of housing loan in Rupees from an Authorised Dealer or a Housing Finance Institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation ? How can such loan be repaid?

21. Can NRI/PIO avail of housing loan in Rupees from his employer in India?

22. Can NRI / PIO repatriate outside India the sale proceeds of immovable property held in India?

23. Can an NRI/PIO repatriate the proceeds in case the sale proceeds were deposited in the NRO account?

24. If a Rupee loan was taken by the NRI/ PIO from an Authorised Dealer or a Housing Finance Institution for purchase of residential property can the NRI / PIO repatriate the sale proceeds of such property?

25. If the immovable property was acquired by way of gift by the NRI/PIO, can he repatriate abroad the funds from sale of such property?

26. If the immovable property was received as inheritance by the NRI/PIO can he repatriate the sale proceeds?

27. Can Foreign Embassies / Diplomats / Consulates General purchase / sell immovable property in India?

28. Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds?

29. Can a person who had bought immovable property, when he was a resident, continue to hold such property even after becoming an NRI/PIO?

30. In which account can the sale proceeds of such immovable property be credited ?

31. Can the sale proceeds of the immovable property referred to in Q.No. 29 be remitted abroad ?

32. Can foreign nationals of non-Indian origin resident in India or outside India who had earlier acquired immovable property under FERA with specific approval of the Reserve Bank continue to hold the same? Can they transfer such property?

33. Is a resident in India governed by the provisions of the Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations, 2000?

Note :

The relevant regulations covering the transactions in immovable property have been notified vide RBI Notification No. FEMA 21/2000-RB dated May 3, 2000 and this basic notification has been subsequently amended by the notifications detailed below:

i) Notification No.FEMA 64/2002-RB dated June 29, 2002;

ii) Notification No.FEMA 65/2002-RB dated June 29, 2002;

iii) Notification No.FEMA 93/2003-RB dated June 9, 2003;

iv) Notification No. FEMA 146/2006-RB dated February 10, 2006 read with A.P.(DIR Series) Circular No. 5 dated 16.8.2006; and

v) Notification No. FEMA 200/2009-RB dated October 5, 2009

All the above notifications and A.P. (DIR Series) Circulars are available on the RBI website: www.fema.rbi.org.in. The Master Circular on Acquisition and

Transfer of Immovable Property in India by NRIs/PIOs/Foreign Nationals of Non-Indian Origin is also available on the website under the link “www.rbi.org.in à Sitemap à Master Circulars”.

In case of clarification, a reference may be made to the following address:

Chief General Manager-in-Charge,

Foreign Exchange Department

Central Office,

Foreign Investment Division,

Reserve Bank of India,

Mumbai- 400 001

Email : Our Regional Offices at Ahmedabad (fedahmedabad@rbi.org.in), Bangalore (fedbangalore@rbi.org.in), Bhopal (fedbhopal@rbi.org.in), Bhubaneswar (fedbhubaneswar@rbi.org.in), Chandigarh (fedchandig

arh@rbi.org.in), Chennai (fedchennai@rbi.orgin), Guwahati (fedguwahati@rbi.org.in), Hyderabad (fedhyderabad@rbi.org.in), Jaipur (fedjaipur@rbi.org.in), Jammu (fedjammu@rbi.org.in), BKC Mumbai (fedbkc@rbi.org.in),

Kanpur (fedkanpur@rbi.org.in), Kochi (fedrbikochi@rbi.org.in), Kolkata (fedkolkata@rbi.org.in), New Delhi (fednewdelhi@rbi.org.in), Panaji (dgmpanaji@rbi.org.in) and Patna (fedpatna@rbi.org.in).