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1 Q: Who is non-resident Indian (NRI)?
A: An Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (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 non-temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs).
2 Q: Who is a person of Indian Origin?
A:
A. For the purposes of Availing of the facilities of opening and maintenance of bank accounts and investments in shares/securities in India :
A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian origin, if,
1. He, at any time, held an Indian passport, or
2. He or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or Citizenship Act.
Note: A spouse (non being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons only jointly with their NRI spouses.
B. For investments in immovable properties:
A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal), is deemed to be of Indian origin if,
1. He held an Indian passport at any time, or
2. He or his father or paternal grand-father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955.
3 Q: What is an OCB?
A: Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside India and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of at least 60% by individuals of Indian nationality or origin resident outside India as also overseas trusts in which at least 60% of the beneficial interest is irrevocable held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees, The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be at least 60%.
4 Q: Are OCBs required to produce any certificate regarding ownership/beneficial interest in them by NRIs?
A: Yes. In order to establish that the ownership/beneficial interest in any OCB held by NRIs is not less than 60%, the concerned body/trust is required to furnish a certificate from an overseas auditor/chartered accountant/certified public accountant in form OAC where the ownership/beneficial interest is directly held by NRIs, and in form OAC 1 where it is held indirectly by NRIs and further that such ownership interest is actually held by them and not in the capacity as nominees.
5 Q: What are the various facilities available to NRIs/OCBs?
A: NRIs/OCBs are granted the following facilities :
1. Maintenance of bank accounts in India.
2. Investments in securities/shares of, and deposits with, Indian firms/companies.
3. Investments in immovable properties in India.
Source: Reserve Bank of India
6 Q: What are the types of Property can a NRI/PIO purchase in India?
A: There are no restrictions on the numbers of Residential/Commercial Properties (other than agricultural land/farm house/plantation) that can be purchased.
7 Q: Do non-resident Indian citizen require permission of Reserve Bank to acquire residential/ commercial property in India?
A: No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse.
8 Q: Where can permission be taken for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals of Indian origin?
A: All requests for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001.
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Q: Is there are any Lock in period for such investment?
A: Currently there is no lock in period.
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Q: Can NRI/PIO sell their purchased property without the permission of Reserve Bank?
A: Yes.
Reserve Bank of India has granted general permission for sale of such property to the following categories:-
1. To a NRI
2. To a PIO (If the seller is a PIO, then a prior approval is required from RBI)
3. To a person Resident of India
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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.
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Q: Can the sale proceeds of such property (if and when sold) be remitted/repatriated out of India?
A: Yes the sale proceeds can be remitted/repatriated out of India
In the event property acquired out of foreign exchange source i.e. remittance through normal banking channels/ debit to NRE/ FCNR(B) accounts, the amounts to be repatriated should not exceed the amount paid for such property from such source. However, repatriation of sale proceeds purchased out of foreign exchange is restricted to not more than two residential properties, in a block of one year, with a facility of crediting the Capital gain to the NRO account.
Again in the event the property was acquired out of Rupee source, an amount not exceeding USD one million, per financial year, subject to tax compliance, out of balance held in NRO account, may be remitted.
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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.
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Q: Can NRI/PIO acquire residential/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.
Source by: Reserve bank Of India |
NRI / FAQ’s
