Procedure for NRI buying property in India..

Q: Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?

Venu Gopal, Chennai

27th October 2014

Legal in Chennai

investment advice

india real estate

nri investment in india

buying property advice

rbi rules

legal terms for nri

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Replies (5)

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Rohit Shetty, Thane

21st February 2020

Comment

An NRI needs a PAN card before wishing to make any financial transaction in India. While it is not a must, it is advisable for the buyer to have an NRI account and It is advisable to have a trusted broker to facilitate the property transaction. Alternatively, an NRI buyer can hire a lawyer to check legal aspects of the property.

Ravi Kumar, Chennai

28th August 2015

Comment

What Checklist is necessary for NRIs before investing in a property in India?

Gaurav, Chennai

26th August 2015

Comment

Hi Gaurav, There is a various list which buyers have to remember before making a property investment in their country of origin:
1. Know your property type.
2. Verify the seller
3. Taxation and cost
4. Aid
5. Documentation.

Rama Naidu, Chennai

26th August 2015

Thanks naidu, Can an NRI buy any property in India?

Gaurav, Chennai

26th August 2015

@ Gaurav,
NRIs can't purchase agricultural, farm or plantation associated properties in India.In case, an NRI purchases a residential or a commercial unit developed by a real estate firm on an erstwhile farmland, the investment is still considered illegal, irrespective of who bought the land first.

Rama Naidu, Chennai

26th August 2015

Thanks Naidu for the quick response, I have one more query that Can an NRI avail Home loans?Are tax benefits applicable if NRIs avail home loans?

Gaurav, Chennai

26th August 2015

Yes, definitely. RBI permits home loans for NRIs towards buying property as well as for repairs and renovations for existing property.Under section 24 of the Income Tax Act, the interest, as well as the principle on the home loan, is exempted from taxation.

Rama Naidu, Chennai

26th August 2015

Hi Guys,
Kindly provide some information about these questions:- 1) Can immovable property held in India, be transferred by way of gift to relatives/registered charitable trusts/organizations in India? 2) Can NRIs obtain loans for acquisition of a house/flat for residential purpose from authorized dealers/financial institutions providing housing finance?

Javed, Chennai

27th October 2014

Comment

Hi Javed,
As per my knowledge, my answer to the first question is Reserve Bank has granted general permission to non-resident persons (foreign citizens) of Indian origin to transfer by way of gift immovable property held by them in India to relatives and charitable trusts/organisations subject to the condition that the provisions of any other law, including Foreign Contribution (Regulation) Act, 1976, as applicable, are duly complied with.

Priya Sharma, Chennai

29th October 2014

Hi Javed,

Here is your second question answer. Reserve Bank has granted 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 non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions.

Rajnikanth, Chennai

29th October 2014

@ Javed,
As per my knowledge, the purpose of the 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 investors‘ NRE/FCNR/NRO accounts.

Priya Sharma, Chennai

29th October 2014

Hi Mr venu,
As per my knowledge, Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain permission of Reserve Bank.

VKumar, Chennai

27th October 2014

Comment

Hi Guys,
What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?

Venu Gopal, Chennai

27th October 2014

Hi Mr Venu,

In my point of view, they are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

VKumar, Chennai

27th October 2014

Hi Mr Kumar,
Kindly tell me that can such property be sold without the permission of Reserve Bank? Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

Venu Gopal, Chennai

27th October 2014

Hi Mr Venu Gopal,

As per law, Yes. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.

Pavan kumar, Chennai

27th October 2014

Hi Mr Venu,
Definitely yes, Reserve Bank has granted general permission to foreign citizens of Indian origin to Acquire or Dispose of properties up to TWO houses by way of Gift from or to a Relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws.

VKumar, Chennai

30th October 2014