Foreign Exchange Management Act,1999 under section 6(3)(i) Permits RBI to restrict, prohibit or transfer of immovable property or regulate acquisition in India, by a person resident outside India. RBI according to powers conferred under sec.6(3)(i) has declared The Foreign Exchange Management Regulations,2000. (Transfer of Immovable Properties and Acquisition in India) The said regulations don’t put any restrictions on the number of commercial/residential properties that can be bought.
FAQ’s on Transfer of Immovable Properties and Acquisition in India by a person resident outside India
Q: Who can buy immovable properties or land in India?
Ans. The following categories can buy immovable properties in India:
- i) Non-Resident Indian (NRI)
- ii) Person of Indian Origin (PIO)
The general permission, however, covers only buying of commercial and residential property and is not available for the purchase of agricultural land and plantation property or farm- house in India.
Q: Can NRI/PIO acquire agricultural land or plantation property or farm house in India?
Q: Are any documents required to be filed by the Reserve Bank after the purchase of property?
Ans. No. An NRI / PIO who has purchased commercial /residential property under general permission is not needed to file any documents with the Reserve Bank.
Q: How many residential and commercial properties can NRI / PIO buy under the general permission?
Ans. There are no restrictions on the number of residential and commercial properties or land that can be purchased.
Q: Can an alien national of non-Indian origin be a second holder to real estate and land bought by NRI and PIO?
Q: Can an alien national of non-Indian origin resident outside India buy immovable properties in India?
Ans. No. A foreign national of non-Indian origin, a resident of outside India, cannot buy any immovable properties in India unless such property is received by way of inheritance from a person who was the citizen in India. However, he/she can transfer or acquire or immovable property in India, on the lease, not exceeding five years. In such circumstances, there is no requirement of taking any reporting or permission of to the Reserve Bank.
Q: Can a foreign who is a person citizen in India buy immovable properties in India?
Ans. Yes, an alien who is a person native to India under the Section 2(v) of FEMA, 1999 can buy immovable properties or land in India. But the person concerned would have to get the permissions and fulfil the requirements, if any, prescribed by other authorities, say, the State Government concerned, etc. The onus to prove his/her residential status is to the individual as per the extant FEMA provisions, if needed by any power and authority. However, a foreign national resident in India who is a resident of Pakistan, Bangladesh, Afghanistan, China, Iran, Nepal, Sri Lanka and Bhutan would need prior approval of the Reserve Bank.
Q: Can NRI and PIO repatriate outside India the sale proceeds of immovable properties held in India?
(a) Under the case of the sale of immovable properties other than agricultural land/farm house/plantation property in India by an NRI / PIO, the Authorised Dealer may provide repatriation of the sale proceeds outside India, rendered the following conditions are satisfied, specifically:
(i) The immovable property was obtained by the seller under the provisions of the foreign exchange law in force at the time of possession by him or the provisions of certain Regulations;
(ii) The cost to be repatriated does not exceed:
The amount spent for acquisition of the immovable properties in foreign exchange acquired through normal banking channels, or the amount paid out of funds included in Foreign Currency Non-Resident Account(NRI) or the international currency equivalent of the amount paid where such payment was made from the funds held in Non-Resident External account for the acquisition of the property.
(iii) In the matter of residential property, the repatriation of sale proceeds is limited to not more than two such properties.
For this purpose, repatriation outside India indicates the buying of international exchange from an authorized dealer in India. And sending it outside India through normal banking channels or crediting it to an account denominated in an international currency or to an account in Indian currency maintained with an authorized dealer from which it can be converted into global currency.
It is pretty clear that there is no restriction on many properties being held by NRI and PIO. However, NRI/PIO can only remit sale yields of 2 house properties from India in a Single name.