FAQ's on acquisition and purchase of properties

Q) Do Non-Resident Indian citizens require permission of Reserve Bank to acquire residential/commercial properly in India?

A) No, non-residents need not seek permission from the Reserve Bank to acquire residential/commercial properly in India.

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

A) Yes. However, 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 separate permission of Reserve Bank.

Q) 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?

A) 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.

Q) In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?

A) The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NTE/FCNR accounts maintained with banks in India.

Q) Can foreign citizens of Indian origin acquire commercial properties in India?

A) Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers' NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

Q) Is NRI/PIO who has purchased residential/commercial property under general permission required to file any documents with Reserve Bank of India?

A) NRI/PIO who has purchased residential/commercial property under general permission is not required to file any documents with the Reserve Bank.

Q) Is there any restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available?

A) There is no restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available.

Q) Can a name of a foreign national of non-Indian origin be added as a second holder to a residential/commercial property purchased by NRI/PIO?

A) No, a foreign national of non-Indian origin cannot be added as a second holder to a residential/commercial property purchased by NRI/PIO.

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.

Q) Can a foreign national of non-Indian origin acquire residential property on a lease in India?

A) Yes. A Foreign National of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission of Reserve Bank of India.

Q) Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of purchase?

A) No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.

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.

Q) Can a foreign national of non-Indian origin resident outside India acquire residential/commercial in India by way of gift?

A) No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 'transfer' includes among others, 'gift'. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire residential/commercial property in India by way of gift.

Q) Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of gift?

A) No. A person resident outside India cannot acquire agricultural land/plantation property/farm house in India by way of gift.

Q) Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable property in India acquired by way of inheritance from a person resident in India?

A) Yes. A person resident outside India can hold immovable property acquired by way of inheritance from a person resident in India as per the provisions of Section 6(5) of the Foreign Exchange Management Act, 1999.

Q) Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable property in India acquired by way of inheritance from a person resident outside India?

A) With the specific approval of Reserve Bank a person resident outside India may hold any immovable property in India acquired by way of inheritance from a person resident outside India, provided the bequeath or had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations.

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