Wednesday, July 20, 2011

NRI PROPERTY ISSUES

Definition of NRI and PIO
Non-Resident Indian (NRI) is a citizen of India but a resident outside India.   ‘Person of Indian Origin' (PIO) means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who at any time, held an Indian Passport or who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

Acquisition of immovable property in India by NRIs / PIOs is regulated in terms of Section 6 (3) (i) of the Foreign Exchange Management Act (FEMA), 1999 and the regulations made thereunder from time to time.

Purchase of immovable property
Under the general permission available,  Non-Resident Indian (NRI) and  Person of Indian Origin (PIO) can purchase immovable property in India. The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land / plantation property / farm house in India. In other words,  NRI/PIO cannot acquire agricultural land/ plantation property / farm house in India. However, a person who had bought the  agricultural land/ plantation property / farm house in India when he was a resident, can continue to hold the immovable property without the approval of the Reserve Bank even after becoming an NRI/PIO.  An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank. There are no restrictions on the number of residential / commercial properties that can be purchased.  Payment can be made by NRI / PIO out of (a) funds remitted to India through normal banking channels or (b) funds held in NRE / FCNR (B) / NRO account maintained in India. No payment can be made either by traveler’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.

Sale of immovable property
NRIs can sell property in India to i)   a person resident in India; or ii)  an NRI; or (iii) a PIO.  PIOs can sell property in India to i)   a person  resident in India; or ii)   an NRI; or iii)  a PIO ( with the  prior approval of the Reserve Bank). An NRI / PIO may sell agricultural land /plantation property/farm house (already owned by him) to a person resident in India who is a citizen of India. The sale proceeds may be credited to NRO account of the NRI /PIO. From the balance in the NRO account, NRI/PIO may remit abroad up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes.  

Inheritance of immovable property:
NRIs and  PIOs can inherit and hold immovable property in India from a person who is resident in India. However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek prior approval of the Reserve Bank for inheriting immovable property in India. NRIs/PIOs can sell such inherited property. General permission is available to the NRIs/PIOs to repatriate the sale proceeds of the immovable property inherited from a person resident in India subject to the following conditions:  (i) the amount should not exceed USD one million, per financial year (ii) this is subject to production of documentary evidence in support of acquisition / inheritance of assets and an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.4/2009 dated June 29, 2009 (iii) in cases of deed of settlement made by either of his parents or a close relative (as defined in section 6 of the Companies Act, 1956) and the settlement taking effect on the death of the settlor ) the original deed of settlement and  a tax clearance / No Objection Certificate from the Income-Tax Authority should be produced  for the remittance  (iv) where the remittance as above is made in more than one installment, the remittance of all such installments shall be made through the same Authorised Dealer.

Acquiring immovable property by Gift, Settlement etc.
NRIs and  PIOs can freely acquire immovable property by way of gift either from i) a person resident in India; or ii) an NRI;  or iii) a PIO.  However, the property can only be commercial or residential in nature. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift. The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes.   NRI / PIO may gift residential / commercial property to (i) person resident in India or (ii) an NRI or (iii) PIO.   However NRI / PIO can gift an agricultural land / a plantation property / a farm house in India (already owned by him as explained above)  only to a person resident in India who is a citizen of India.

Lease of Immovable Property
NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRI/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.

Mortgage of Immovable Property
NRI / PIO can mortgage a residential / commercial property to (a) an Authorised Dealer / Housing Finance Institutions in India without the approval of Reserve Bank (b) a bank abroad, with the prior approval of the Reserve Bank.

 -P.RAJENDRAN









28 comments:

  1. Nice Post. Thanks for sharing the information about NRI related property issues. I have bookmarked your post. Looking forward for more posts.

    ReplyDelete
  2. Hey my very first comment on your site. ,I have been reading your blog for a while and thought I would completely pop in and drop a friendly note. . It is great stuff indeed.

    Houses and Land Packages

    ReplyDelete
  3. Thank you for the info. It sounds pretty user friendly. I guess I’ll pick one up for fun. thank u


    Villas in India

    ReplyDelete
  4. Nice Post. Really nice information....Thanks for sharing the information about Property Sites in India.

    ReplyDelete
  5. It is good news for NRIs those want there own home in India. It will also helps them to take the benefit of real estate business of India.
    properties in Jaipur

    ReplyDelete
  6. It is really refreshing to find a company that offers more than a basic package. This company use the latest IT software to market your home ensure your it is sold to the right customer.

    ReplyDelete
  7. Replies
    1. Please contact me on rde.mehmood@gmail.com with your services and location with contact number

      Delete
  8. Many thanks for such a write-up. I undoubtedly cherished reading it and talk about this it to
    whistler accommodations

    ReplyDelete
  9. This comment has been removed by the author.

    ReplyDelete
  10. Really awesome and useful publish, however along with residence investment strategies i would argu all NRIs to also spend money on profitable economical instrumetns for investment strategies.

    Supertech Golf Village

    ReplyDelete
  11. This comment has been removed by the author.

    ReplyDelete
  12. Devika Skypers offers residential and commercial residence for Indian.Mostly NRI are interested for buying residence in Indian.They want to invest in property because residence rates grow day by day.NRI buying property in India and get more and more benefits.

    ReplyDelete
  13. I like your blog post. Keep on writing this type of great stuff. I'll make sure to follow up on your blog in the future.

    NRE NRO Account

    ReplyDelete
  14. Pragati Group of company is best leading real estate developers in Delhi NCR comprises of several real estate company.Real Estate investors and buyers have several reasons to buy property in India,as it is getting one the fastest developing areas in Delhi NCR. These flats are being built under the realty projects.
    Buy property india

    ReplyDelete
  15. Pragati Group is best leading real estate developers in Delhi NCR and Noida comprises of several real estate company. Real Estate Developers and customer have several reasons to buy property in India,as it is getting one the quickest creating places in Delhi NCR. These property are being developed under the real residence projects.
    Buy property india

    ReplyDelete
  16. Hello Sir...

    Myself Narayab
    na from Hindu Rajaka community (BC) and i married girl from Hindu kapu community (OC).

    Kindly advice for the below queries:

    1)Considering it as Inter cast marriage whether the girl community will change from OC to BC ?

    2)What will be the community for my kids ?

    I will be happy if i get answers from your end.

    ReplyDelete
  17. I am Sc and my husband is MBC can I get certificate for my children as SC

    ReplyDelete
  18. Nice content for NRI's who want to know property related issues.
    Pen Property,Plot At Pen Raigad
    Plot At Pen Raigad - SMS / CALL 09860117724 / 09224335234
    Website: http://www.propertypenraigad.com/
    Email: info@propertypenraigad.com
    propertypenraigad.com@gmail.com

    ReplyDelete
  19. Looking for Property? Buy, Sell or Rent a property at buysellrentncr.com - Delhi/NCR leading Buy Real Property in Delhi online real estate portal. Find Thousands of Properties from property owners & property dealers and Builders across Delhi/NCR.

    ReplyDelete
  20. Excellent article!! Very informative.
    If anyone is looking to buy, sell or rent properties in Hyderabad . Visit http://www.homesulike.com/ for assisted property search.

    ReplyDelete
  21.  Booking @91-9650019588 Supertech Launch ''AZALIYA''  at Sector-68, Gurgaon, the 2nd phase of our project Supertech- HUES, it has 1, 2 and 3 BHK Semi-furnished apartments. Starting from 35 lacs onward. 

    ReplyDelete
  22. Thanks for the information I found it very helpful. I recently bought a flat and at that I consulted Indiabulls's agent.

    ReplyDelete
  23. Thanks for sharing such a nice information. Keep posting !!!Law firm Delhi

    ReplyDelete
  24. Well, Delhi Government to Regularise 917 Unauthorised Colonies is having large amount of 1, 2 and 3 BHK lavish flats in peaceful location of dlehi.
    Apartments in Akkarai

    ReplyDelete
  25. Hey guys! I had an amazing experience with property management service in India just in Rs.15000 annually. while staying in Singapore. I could easily get rid of my property worries as these managers could handle all of it back in India on my behalf. Why don’t you also experience the same, you can checkout https://www.myfollo.com/propcare

    ReplyDelete