FAQ's on sale and renting of properties and remittance

Q) Under general permission available to whom can NRI transfer by way of sale his residential/commercial property?

A) NRI can transfer by way of sale residential/commercial property in India to a person resident in India or to a NRI or a PIO.

Q) Under general permission available to whom can a PIO transfer his residential / commercial property by way of sale?

A) PIO can transfer by way of sale residential/commercial property in India only to a person resident in India.

Q) Can a PIO transfer by way of sale his residential/commercial property to a NRI or a PIO?

A) No. He would need to seek Reserve Bank prior approval for transfer by way of sale residential/commercial property in India to a NRI or a PIO.

Q) Can a foreign national of non-Indian origin whether resident in India or outside India transfer by way of sale residential/property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India?

A) No. A foreign national of non-Indian origin whether resident in India or outside India would need to seek prior approval of Reserve Bank for transfer by way of sale residential / property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India.

Q) Under general permission available to whom can NRI/PIO transfer by way of sale his agricultural land/plantation property/farm house in India?

A) Under the general permission available NRI/PIO may transfer by way of sale his agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.

Q) Can a foreign national of non-Indian origin resident outside India transfer by way of sale agricultural land/plantation property/farm house acquired by him in India?

A) A foreign national of non-Indian origin resident outside India would need to seek prior approval of Reserve Bank for transfer, by way of sale, agricultural land/plantation property/farm house acquired in India.

Q) Can residential immovable property purchased by foreign citizens of Indian origin be sold without the permission of Reserve Bank?

A) 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.

Q) Can sale proceeds of such property if and when sold be remitted out of India?

A) In respect of residential properties purchased on or after 26th May,1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May, 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.

Q) Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?

A) Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.

Q) What is the procedure for seeking such repatriation?

A) Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.

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

A) Yes. Foreign citizens of Indian origin can dispose of commercial properties in India.

Q) Can sale proceeds of such commercial property be remitted out of India?

A) Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26th May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of Reserve Bank within 90 days of the sale of property in form IPI 8.

Q) Can the properties (residential/commercial) be given on rent if not required for immediate use?

A) Yes. Reserve Bank has granted general permission for letting out of any immovable property in India. The rental income or proceeds of any investment of such income has to be credited to NRO account.

Q) Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

A) 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,provided gift tax has been paid.

 

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