FAQs on acquisition of residential / commercial premises in India by Non-Resident Indians ("NRI"):

1.   NRI/PIO can purchase immovable property in India ?

→  Yes, Under the general permission available, covers only purchase of residential and commercial property.

2.   Are any documents required to be filed with the Reserve Bank after the purchase?

→  NRI / PIO who has purchased residential / commercial property under general permission, is not required.

3.   How many residential / commercial properties can NRI / PIO purchase under the general permission?

→  There are no restrictions on the number of residential / commercial properties.

4.   Can NRI/PIO acquire farm house/ agricultural land / plantation property in India?

→  No

5.   Can a foreign national who is a person resident in India, can purchase immovable property in India?

→  Yes, a foreign national who is a ‘person resident in India’ within the meaning of Section 2(v) of FEMA, 1999 can purchase immovable property in India, but the person concerned would have to obtain the approvals..

6.   Can the branch / liaison office of a foreign company purchase immovable property in India?

→  foreign company which has established a Branch Office or other place of business in India,in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity.

7.   Can a NRI/PIO acquire immovable property in India by way of gift?

→  Yes, NRIs and PIOs can freely acquire immovable property by way of gift.

8.   Can a non-resident inherit immovable property in India?

→  Yes

9.   What is the procedure for seeking such repatriation?

→  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.

10.   Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

→  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.

11.   Can foreign citizens of Indian origin acquire commercial properties in India?

→  Yes. Under the general permission granted by 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 purchasers' 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.

12.   Can they dispose of such properties?

→  Yes.

13.   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 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.

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

→  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 have to be credited to NRO account.

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

→  Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC,LIC Housing Finance Ltd.,etc. to grant housing loans to non-resident Indian nationals for acquisition of houses/flats for self-occupation subject to certain conditions.

16.   Can authorized dealer grant loans to NRIs for acquisition of a flat/house for residential purposes?

→  Authorized dealers have been granted permission to grant loans up to non-resident Indian nationals for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. 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 investments' NRE/FCNR accounts.

17.   Can Indian companies grant loans to their NRI staff?

→  Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions. Source: Reserve Bank of India

18.   While purchasing real estate most developers demand a Power of Attorney in their favor, is there a way to avoid it?

→  One can choose not to grant the Power of Attorney (POA) to the developers. However this will mandate the mailing of all documents to your foreign residence and associated time delays. A good compromise is to grant the POA to the builder only for specific necessary items.

Financial facilities from Government as well as private sectors banks are available for all Parshwanath Group projects.

Home Loans FAQs for NRIs:

1.   For what kinds of property is a NRI eligible for Home loans?

→   A home loan is sanctioned to the NRIs for any of the following housing finance schemes:

a) To purchase a house that is ready-built, under construction or from a second owner.
b) To fund the purchase of a plot of land allotted by a society / development authority.
c) For self-construction of a property on a plot of land.
d) For renovation or improvement of an existing property in India.

2.   What is the eligibility for obtaining NRI Home Loans?

→  Your eligibility is calculated in the same way as it is calculated for resident Indians. More emphasis is laid on the following criteria in the appraisal of a NRI case:

a) Qualifications - the NRI applicant has to be a graduate
b) Current job profile & Past work experience
c) Probability of continuing abroad for the loan tenure
d) Probability of servicing the loan with an extended tenure in case you have to return to India.

3.   What is the repayment period for a NRI Home Loan?

→  The housing finance offered to NRIs normally does not exceed 5 years. However, some HFCs offer loans for a term of 7 years. The repayment for the loan is via EMIs. The EMIs begin only after the entire loan is disbursed. In case of a part disbursement, you pay simple interest at the rate applicable on the loan amount that is disbursed to you.

4.   How is the mode of payment for NRI home loans?

→  The loan towards the house has to be paid for the entire tenure of the loan through remittances from abroad through normal banking channels or from such accounts as may be permitted by RBI from time to time. As of today, the payments are done through NRO, NRE, NRNR and FCNR accounts. These accounts change on the basis of RBI permissions to each HFC.

5.   What are the Tax Benefits applicable to Non-Resident Indians?

→  No tax benefits are available for NRI customers unless you file returns and thereby become eligible to avail the tax benefits as mentioned under Home Loans.

6.   What are the documents required for obtaining NRI Home Loans?

→   NRIs are required to submit additional documents than is normally required for a resident Indian.

a) A copy of the passport
b) A copy of the works contract (also sometimes referred to as the contract card/labor card)
c) The power of attorney (POA)
The POA is required because the borrower is not based in India and in such a scenario; the HFC would need a representative 'in lieu of' the NRI to deal with as required. Although not mandatory, the POA is usually drawn on the NRI's parents, wife or children.