Rachanaa is well equipped to provide all possible assistance to Non-resident Indians (NRIs) or Persons of Indian Origin (PIOs) be it buying, selling, leasing, renting or even maintaining immovable property for those who do not have a trustworthy and transparent local source to look after their real estate related affairs in Mumbai.

Here is the latest information and Frequently Asked Questions concerning NRIs on immovable property in Mumbai, India. If you have any specific queries, please Contact us

1. Who is a foreign citizen of Indian Origin

A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan,
Sri Lanka or Nepal) is deemed to be of Indian Origin if : i)he held an Indian Passport at any time or ii)he or his father or paternal grand father was a citizen of India by virtue of the constitution of India or the Citizenship Act, 1955. (57 of 1955).

2. Do non-resident Indian citizens require permission of the Reserve Bank of India to acquire immovable property in India?

No.

3. Whether Foreign citizens of Indian origin require permission of The Reserve Bank of India to acquire immovable property in India for their residential use or not. If yes, what are the formalities required to be completed by them ?

Yes, However, Reserve Bank of India has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to acquire immovable property in India for their bonafide residential purpose. They are, therefore, not required to obtain separate permission of The Reserve Bank of India. They are required to file a declaration in form IPI 7 with 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 alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

4. How should the purchase consideration for residential immovable property be paid by foreign citizens of India origin under the general permission?

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

5. Can such property be sold without the permission of Reserve Bank?

Yes. Reserve Bank has granted general permission for sale of such property. However, where the property is acquired 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.

6. Can sale proceeds of immovable property if and when sold be remitted out of India?

Repatriation outside India , including credit to RFC, NRE or FCNR account, of sale proceeds of any immovable property situated in India, requires prior permission of the Reserve Bank except in circumstances stated in paragraphs below:

(A) In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a person resident outside India, who is a citizen of India, or a person of Indian origin, the authorised dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied :-

i. the immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules /Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act,1999;

ii. the amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency non-resident account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property;

iii. And in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

(B) Authorised Dealers have been permitted to allow the facility of repatriation of funds by NRIs/PIOs in their Non-Resident Ordinary Rupee (NRO) account upto US$ 100,000/- per year representing sale proceeds of immovable property held by them for a period of not less than 10 years subject to payment of applicable taxes.

7. What are the conditions required to be fulfilled if repatriation of sale proceeds is
desired? What is the procedure for seeking such repatriation?

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 instalment of consideration amount, whichever is later. Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of The Reserve Bank at Mumbai within 90 days of the sale of the property.

8. Can foreign citizens of Indian origin acquire or dispose 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.

9. Can immoveable property held in India, be Transferred by way of gift to relatives/registered charitable trusts/organisations in India ?

Yes, General permission has been granted by Reserve Bank to non-resident persons (foreign citizen) of Indian Origin to transfer, by way of gift, immoveable property held by them in India to relatives and charitable trusts / organisations subject to the condition that the provisions of all other laws, as applicable are complied with.

10. Can foreign citizens of Indian origin accquire commercial properties in India? Can they dispose of such properties?

Yes, under the general permission granted by The 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 purchaser's 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. Yes they can dispose of such properties

11. Can sale proceeds of such property be remitted out of India?

Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26 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 instalment of consideration amount, which ever 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.

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

Yes, The NRIs/PIOs can freely rent out their immovable properties in India without
seeking any permission from the Reserve Bank of India. The rental income being a
current account transaction is freely repatriable outside India.

13. Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?

The Reserve Bank has granted permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorised dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts.

14. Can an authorised dealer grant a housing loan to non-residents of Indian nationality where he is a principal borrower with his resident close relative as a co-borrower / gurantor or where the immovable property is owned jointly by such NRI borrower with his resident close relative?

Yes, However in such cases the payment of margin money and repayment of loan instalments should be made by the NRI borrower.

15. What are the documents required for loan processing ?

The following documents are required along with the application form: Photocopy of the labour contract duly countersigned by applicant’s employer (translated to English for non-English documents). Latest salary certificate (in English) specifying the following:

Name (as it appears in the passport).
Date of joining.
Passport Number.
Designation.
Perquisites and salary.
Photocopy of labour card/identity card.
Photocopy of valid resident visa stamped on the passport.
Photocopy of monthly statement of local bank account.
Property related documents.

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