The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999.
The amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency non-resident account or (b) 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; and In case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties. Authorized dealers can allow remittance up to USD 1 million for any purpose, per calendar year from balances in NRO accounts subject to payment of applicable taxes. The limit of USD 1 million per year includes sale proceeds of immovable properties acquired by the NRI/PIO’s while they were resident in India and held for a period of 10 years and above. In case the property is sold after being held for less than 10 years, remittance can be made if the sale proceeds were held for the balance period in NRO account or in any other eligible instruments. Yes. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of immovable properties other than agricultural land/farmhouse/plantation property by way of gift from or to an Indian citizen, NRI or PIO.\
Authorized dealers have been granted permission to grant loans to NRI’s for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. 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. Yes. Such housing loans availed in rupees can also be repaid by the close relatives in India of the borrower. All requests for acquisition of agricultural land / plantation property / farm house by any person resident outside India may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001. For further information please visit the FAQ Section of http://www.rbi.org.in
An NRI can inherit any immovable property in India, whether it is residential or commercial. An NRI is also permitted to inherit property from another NRI or resident of India. However, the RBI’s permission is essential if the property is inherited by a citizen of a foreign state and is a resident outside India.
An NRI can gift residential and commercial property to a person residing in India, or another NRI. Gifts received from relatives are not taxed but at the time of registration, one has to pay the prevalent stamp duty and registration charges. If the gift is received on the occasion of marriage or from a registered trust, it is exempt from tax. The term ‘relative’ is defined in the Income Tax Act.
There is no restriction on NRIs for repatriating rental income or even property sale proceeds, as long as the total proceeds are within the set limit of $1 million in a fiscal year.
The conditions are:
- The property being sold was acquired as per the foreign exchange regulations applicable during that period.
- The amount being repatriated cannot exceed the cost of the sale proceeds from the transaction.
- The sale proceeds from a maximum of two residential properties can be repatriated.
- The maximum amount of repatriated funds from a Non-Resident Ordinary (NRO) account is capped at $1 million per fiscal year.
- Funds can be repatriated only after settling all the applicable taxes and other charges.
It is obviously very important for an NRI to pay attention to factors like the legitimacy of land, compliances to be followed during construction, environmental clearances, etc. at the time of a property purchase. Before buying such a property, the NRI should consult a lawyer to examine all the legal documents and verify their authenticity. They must also check whether the project is registered under the respective state RERA and whether or not it is fully RERA-compliant.
It is not advisable for NRIs to file property dispute cases anywhere else other than the jurisdiction where the property is located. Delays in the construction process beyond the extension period mentioned in the agreement fall under the purview of consumer courts concerning ‘deficiency in rendering of service’ under the Consumer Protection Act of 1986.
NRIs can make payments out of-
- Funds remitted to India through regular banking channels.
- Funds held in NRE/NRO account maintained in India.
- No payment can be made outside India.
- No payment can be made through traveller’s cheque or by foreign currency notes.
No NRI’s do not require any permission to acquire any immovable property in India other than agricultural / plantation property or a farm house. No NRI’s do not require any permission to transfer any immovable property in India. Permission is required only in the case of transferring of agricultural or plantation property or farm house to another citizen of India NRI or PIO. Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income is eligible for repatriation Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., to grant housing loans to NRI’s for acquisition of a house/flat for self-occupation subject to certain conditions. The purpose of loan margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the investor’s NRE/FCNR/NRO Accounts.