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 The
government has liberalised investment norms for NRIs to invest
in real
estate in India. At the same time there is a
need of adhering to ground realities before
plunging into investment. Here are
some of the
frequently answered questions answered
recently by the Reserve Bank of India.
Who can purchase immovable property in India?
Under the general permission
available, the
following categories can freely purchase
immovable property in India:
i) Non-Resident Indian (NRI)- that is a citizen
of India residing outside India
ii) Person of Indian Origin (PIO)- that is an
individual (not being a citizen of Pakistan or
Bangladesh or Sri Lanka or Afghanistan or China
or Iran or Nepal or Bhutan), who 1.
at any time, held an Indian passport, or 2. either
whose father or grandfather was a
citizen of India by virtue of the Constitution
of India or the Citizenship Act, 1955
(57 of 1955).
The general permission, however, covers only purchase
of residential and commercial
property and not purchase of agricultural land
/ plantation property / farm houses in
India.
Can
NRIs/PIOs acquire agricultural land/ plantation property/
farm house in
India?
No,
since general permission is not available to NRIs/PIOs
to acquire agricultural
land/ plantation
property / farm houses in India, such proposals will require
specific
approval of the Reserve
Bank and the proposals are considered in consultation with
the Government of
India.
Do
any documents need to be filed with the Reserve Bank of India
after
purchase?
No.
An NRI / PIO who has purchased residential / commercial
property under general
permission, is not
required to file any documents with the Reserve Bank of India.
How many residential
/ commercial properties can an NRI / PIO purchase
under the general
permission?
There are no restrictions
on the number of residential / commercial properties that
can be purchased
under the general permission.
Can a foreign
national of non-Indian origin be a second holder to immovable
property purchased
by NRI / PIO?
No!
Can a foreign
national of non-Indian origin residing outside India purchase
immovable property
in India?
No.
A foreign national of non-Indian origin, residing outside
India cannot purchase any
immovable property
in India.
But, he/she may take
residential accommodation on lease provided the period of
lease does not exceed
five years. In such cases, there is no requirement of taking
any permission of
or reporting to the Reserve Bank.
Can a foreign national
who is a person residing in India purchase immovable property
in India?
Yes,
but the person concerned would have to obtain the approvals,
and fulfil the
requirements if any,
prescribed by authorities, such as the concerned State
Government. However,
a foreign national resident in India who is a citizen of
Pakistan, Bangladesh,
Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would
require prior approval
of the Reserve Bank. Such requests are considered by the
Reserve Bank in consultation
with the Government of India.
Can an office
of a foreign company purchase immovable property in India?
A foreign company
which has established a branch office or other place of business
in India, in accordance
with FERA / FEMA regulations, can acquire any immovable
property in India,
which is necessary for or incidental to carrying out such
activity.
The payment for acquiring
such a property should be made by way of foreign inward
remittance through
proper banking channel. A declaration in form IPI should be
filed
with the Reserve
Bank within ninety days from the date of acquiring the property.
Such property can
also be mortgaged with an authorised dealer as security for
other
borrowings. On winding
up of the business , the sale proceeds of such property can
be repatriated only
with the prior approval of the Reserve Bank.
Further, acquisition
of immovable property by entities who had set up branch offices
in India and incorporated
in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China,
Iran, Nepal and Bhutan
would require prior approval of the Reserve Bank.
However,if
the foreign company has established a liaison office, it cannot
acquire
immovable property . In such cases, liaison offices,
can take property by way of
lease not exceeding
five years.
Source:
Economic Times
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