NRI Corner

NRI Corner

NRI CORNER

NRIs looking for flats in Navi Mumbai will find their much desired address in Balaji Symphony, Panvel.

An NRI is

An Indian citizen living abroad due to job opportunities or is conducting business or indulging in a vocation outside India for an uncertain duration of stay. A Non-resident Indian status is also applicable to Indians working in U.N organizations and to officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments. NRIs and NRFCIOs (Non-resident foreign citizens of Indian origin) are treated equally with regard to being eligible for certain facilities.

A person of Indian origin is

A foreign citizen, other than a citizen of Pakistan or Bangladesh, who at any time possessed an Indian passport or that he, his parents or grandparents were citizens of the country, by virtue of the Citizenship Act, 1955 (57 of 1955) under the Constitution of India.

A spouse of a Indian citizen or a person of Indian origin (who is not a citizen of Pakistan or Bangladesh), can also enjoy person of Indian origin status for the purpose of opening bank accounts and investing in shares provided the bank accounts and shares investments are made by such persons only jointly with their NRI spouses.

Facilities that a person of Indian Origin can avail.

  • Opening and maintaining bank accounts
  • Investing in Shares/securities in India

With regard to investing in immovable property, (A foreign citizen, other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal is considered to be of Indian origin, only if he held an Indian passport at any time or he, his father or grandfather was an Indian citizen, by virtue of the Citizenship Act, 1955 (57 of 1955) under the Constitution of India.

NRIs acquiring property in India

Non-resident Indians do not require Reserve Bank permission to acquire property, be it residential or commercial in India.

Foreign Citizens of Indian origin do not require Reserve bank permission to purchase immovable property in India for their bona-fide residential purposes. Purchases can be made through either inward remittances in foreign exchange through normal banking channels or through NRE/FCNR accounts maintained with banks in India.

Things to do for NRIs to acquire property in India

To purchase immovable property in India, foreign citizens of Indian origin need to file a declaration in form IPI 7 with Reserve Bank’s central office in India. They require to do it within 90 days of purchase of immovable property or final purchase payment along with certified copy of document proving the transaction and bank certificate regarding the consideration paid.

Can NRIs and Foreign citizens of Indian origin sell their property

Foreign citizens of Indian origin are allowed to sell their property. However, in the event of purchase 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.

Repatriation of property sale proceeds

The Reserve Bank considers application of repatriation of property sale proceeds remitted in foreign exchange up to the consideration amount on two properties. The condition being that the residential properties should have been purchased on or after 26th May 1993.    

Application for such repatriations can be considered only if the property is sold three years after date of its purchase deed or date of its final installment payment, whichever is later.

To seek permission for repatriation of property sale proceeds, an application should be made in form IPI 8 within 90 days of property sale to the Central Office of Reserve Bank of India.

As per Reserve Bank guidelines, Foreign citizens of Indian origins are allowed to acquire or dispose of property upto 2 houses by way of gift from or to an Indian origin or Indian citizen relative, whether a resident of India or not.

Transfer of immovable property by NRIs and Foreign Citizens of Indian Origin

The Reserve Banks gives permission to non resident Indians or foreign citizens of Indian origin to transfer by way of gift, immovable property held by them to their relatives or charitable organizations subject to compliance with provisions of Foreign Contribution Regulation Act, 1976 or any other related law.

NRIs and Foreign Citizens of Indian Origin acquiring Commercial property

The Reserve Bank grants permission to foreign citizens of Indian origin to acquire commercial land other than agricultural land/ farm houses / plantation property provided the purchase is met through inward remittances in foreign exchange from normal banking channels or from the purchaser’s NRE/FCNR account funds maintained with banks in India. A declaration in form IPI 7 will need to be submitted by the applicant to the Central office of the Reserve Bank of India within 90 days of final payment towards purchase of the property. 

Repatriation after sale of these properties

The Reserve Bank allows the repatriation of the original investment amount with regard to purchase of property provided the purchase took place on or after 26th May 1993 and is sold after a period of 3 years from the date of final purchase deed or final installment of consideration amount, whichever is later. Application for the same to be made 90 days from the property sale in form IPI 8.

Renting of property acquired by NRIs and Foreign Citizens of Indian Origin

The Reserve Bank allows NRIs and foreign citizens of Indian origin to rent out their acquired property.

The rental income is eligible for repatriation.

Housing Loans to NRIs and Foreign Citizens of Indian Origin

The Reserve Bank  allows financial institutions like HDFC, LIC Housing Finance Ltd etc to grant loans to Non-resident Indians for purchasing residential properties. The quantum of loan will be at par with those offered to resident Indians. Applicants will have to repay loan amount within a period of not more than 15 years through inward remittances or from funds in the investor applicant’s NRE//FCNR/NRO accounts.

Housing Loans by Companies to their overseas Indian employees

Reserve Bank allows Indian Companies to grant loans to their foreign based Indian employees holding Indian passport.

Housing Loans to NRIs as principal borrower with resident relative as guarantor

It is allowed provided payment of margin money and repayment of loan installments is made by the NRI

 

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