Investing in India’s real estate market holds a strong appeal for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs). However, navigating the acquisition and transfer of immovable property in India can be a complex endeavor, given the regulatory framework of the Foreign Exchange Management Act (FEMA). This article addresses frequently asked questions (FAQs) regarding the rules and restrictions governing the purchase of immovable property in India by Non-residents. The FAQs are divided into two distinct sections: I. Acquisition and Transfer of Immovable Property by NRI/OCI. II. Acquisition and Transfer of Immovable Property by Foreign Nationals of Non-Indian Origin. These sections are designed to address the specific inquiries and concerns that arise when non-residents consider property transactions in India, whether they are Non-Resident Indians/Overseas Citizens of India (NRI/OCI) or foreign nationals of non-Indian origin.
1. The acquisition and transfer of immovable properties in India by individuals residing outside the country, including NRIs and OCIs, are subject to specific regulations governed by the Foreign Exchange Management (Non-Debt Instrument) Rules 2019.
2. There are no restrictions on the number of residential or commercial properties that can be purchased by NRIs or OCIs in India.
3. Payment for the purchase of immovable property shall be made out of funds received in India through banking channels by way of inward remittance from any place outside India.
4. Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs) have the option to repatriate the sale proceeds of immovable property in India, subject to certain conditions.
The real estate market in India holds a strong appeal for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and foreign citizens. However, navigating the acquisition and transfer of immovable property in India can be complex due to the regulatory framework of the Foreign Exchange Management Act (FEMA). This act governs the acquisition and transfer of immovable properties in India by individuals residing outside the country, including NRIs, OCIs, and foreign citizens.
Let’s address the frequently asked questions (FAQs) regarding the rules and restrictions governing the purchase of immovable property in India by non-residents, which are divided into two distinct sections: Acquisition and Transfer of Immovable Property by NRI/OCI and Acquisition and Transfer of Immovable Property by Foreign Nationals of Non-Indian Origin.
The acquisition and transfer of immovable properties in India by NRIs and OCIs are subject to specific regulations governed by the Foreign Exchange Management (Non-Debt Instrument) Rules 2019.
There are three modes of acquisition of immovable property:
Purchase (other than agricultural land/farmhouse/plantation, etc.) from a resident/NRI/OCI
Acquire as a gift (other than agricultural land/farmhouse/plantation, etc.) from a relative who is a resident/NRI/OCI
Acquire any immovable property as inheritance
No, there are no restrictions on the number of residential or commercial properties that can be purchased by NRIs or OCIs in India.
Payment for the purchase of immovable property shall be made out of funds received in India through banking channels by way of inward remittance from any place outside India. The payment can also be made out of funds held in NRE/FCNR(B)/NRO accounts of the NRIs/OCIs.
Yes, it is indeed possible for an individual to retain ownership of residential, commercial, agricultural land, plantation property, or a farmhouse in India even after transitioning to NRI or OCI status, without the need for prior approval from the Reserve Bank of India (RBI).
NRIs and OCIs can sell or gift immovable property to residents/NRIs/OCIs or sell or gift agricultural land/farmhouse/plantation property to residents. They can also gift the property to a relative as defined in section 2(77) of the Companies Act, 2013.
Yes, non-resident Indians (NRIs) and Persons of Indian Origin (PIOs) have the option to repatriate the sale proceeds of immovable property in India, subject to certain conditions.
The ability of foreign nationals of non-Indian origin to acquire property in India depends on their citizenship and residential status. Citizens of certain countries and other foreign nationals have specific restrictions and conditions for acquiring property in India.
Yes, foreign nationals (except citizens of specific countries) who come to India for employment, business, or for an uncertain period and who have stayed in India for more than 182 days in the preceding financial year can acquire immovable property in India, subject to approvals and requirements prescribed by other authorities.
No, foreign nationals of non-Indian origin cannot be co-owners or second holders of immovable property purchased by NRIs or PIOs.
A person resident outside India, who is a spouse of an NRI/OCI, may acquire one immovable property jointly with his/her NRI/OCI spouse, subject to specific conditions.
Foreign nationals of non-Indian origin who initially acquired property while residing in India and later became non-residents or who acquired property by way of inheritance have specific conditions for transferring and repatriating the sale proceeds when they become residents outside India.
In conclusion, for NRIs looking to invest in India’s real estate, understanding the rules under FEMA’s Non-Debt Instrument is crucial. Non-compliance with these regulations could result in penalties of up to three times the amount involved in the violation. This knowledge empowers NRIs to make informed decisions and stay compliant with Indian regulations. As the real estate market in India continues to grow, being well-informed is key to making the most of opportunities in the country.