Non-Resident Indians (NRIs), under RBI guidelines, can purchase certain kinds of properties, though other forms may require special permissions. Thus every NRI, interested in buying property in India, must be aware of the provisions related to purchase or ownership of immovable property in India under Foreign Exchange Management Act (FEMA). Persons of Indian Origin (PIOs) and NRIs are always treated the same when it comes to investing in real estate.
The Reserve Bank of India (RBI) has given general permission to NRIs for any residential or commercial property in India. They do not need to seek any special permission from RBI or send any intimation in this regard. NRIs can purchase any number of commercial or residential properties in India. The income tax laws also favour NRIs. In case the NRI is not able to come to India, he/she has the power to give anyone power of attorney who will execute the deal likewise.
However, the RBI does not allow NRIs to purchase agricultural land or plantation property in India. Under existing regulations, NRIs can’t also purchase farmhouses in India. To purchase farmhouses, the NRI has to take special permission, which will be considered on a case-to-case basis. It is possible for an NRI to purchase property jointly with another NRI. However, any person not authorised to invest in property in India or a resident Indian, cannot become a joint holder irrespective of his/her contribution towards the purchase.
If a person who owns a property in India becomes an NRI, he can continue holding the property in his name in India. Interestingly, an NRI will be allowed to hold agricultural land, farmhouse and plantation property if he purchased them before becoming an NRI. He can also let out the property without considering the fact when it was acquired. It is possible to remit the rent received from such properties after appropriate Indian taxes have been paid on such rent. NRIs can also gift or sell any immovable property to a person residing in India. The NRI can even gift or transfer any property to any NRI, provided it’s not a farmhouse, plantation property or agricultural property.
Non Resident Indians (NRIs) can avail home loans for the purchase of flats, bungalows and villas in India. They need copies of valid passport, statements of non-resident external (NRE) or non-resident ordinary (NRO) accounts, salary certificate, last six months bank account statement/passbook, work experience certificate and a valid job contract or work permit. A person must be employed for at least two years. Businessmen and self-employed individuals need to show proof of income.
If an NRI is availing a home loan, he/she needs to attest the salary certificate from the embassy in case the salary is not credited to a bank. The person must also provide a local address proof and provide power of attorney (PoA) to someone in India. Details of permanent address in India are also necessary. A completed home loan application form is a must and the English translation of the contract must be duly attested by consulate, employer, embassy or the Indian bank’s foreign branch, in case the contract is in some other language.
Other documents that the NRI would need to purchase property in India are agreement for sale/sale deed, copy of approvals for proposed construction, purchase or extension/approved building plans and a no objection certificate (NOC). For purchase or construction of house, the documents he would require are non-encumbrance certificate on the property (for 13 years), original title deed, land tax receipt and possession certificate. In case, the NRI wants to authorise a third party to avail loan instalments, complete mortgage formalities and execute documents, a notarised power of attorney is a must.
The documents required can be divided under headings such as Personal Details Documents, Financial Details Documents for Salaried Individuals, Financial Details Documents for Self Employed Individuals and NRI Personal Guarantor documents. Different banks have different formats for the same. Here we have mentioned them in bullet points of your ease.
As defined by the Foreign Exchange Management Act of 1999 (FEMA), Non Resident Indian (NRI) is a citizen of India, who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Non-resident foreign citizens of Indian Origin are treated at par with Non Resident Indian (NRIs).
Since general permission is not available to NRI/PIO to acquire agricultural land/plantation property/farm house in India, such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India
Under the general permission, an NRI/PIO may purchase a residential property in India by funds remitted to India through normal banking channel or funds held in his NRE/FCNR (B)NRO account. No consideration shall be paid outside India.
Yes. An NRI/PIO can transfer their residential property in India by way of a gift to an Indian resident/NRI/PIO
Yes. Under general permission an NRI can sell his or her residential property in India to an Indian resident only.
Yes. Under general permission an NRI can sell his or her residential property in India to an Indian resident/NRI/PIO
Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
Note: A spouse (not being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons only jointly with their NRI spouses.
a. Any person of full age and capacity:
Documents required for buying property
Under the general permission granted by RBI, the following categories can freely purchase immovable property in India:
a. Non-Resident Indian (NRI)- that is a citizen of India residing outside India
Acquisition by purchase:
Yes, under general permission granted by the RBI an NRI/PIO can purchase a residential property in India
Acquisition by gift:
Yes, under general permission granted by the RBI an NRI/PIO can acquire a residential property by way of gift from a person in India or an NRI or a PIO.
Acquisition by inheritance:
Yes, and NRI/PIO/foreign national of Indian origin can acquire residential property by way of inheritance from a person who is a resident of India as per the Provisions of Section 6(5) of the Foreign Exchange Management Act, 1999. An NRI/PIO/foreign national of Indian origin can also acquire residential property by way of inheritance from a person who is a resident outside of India, with specific approval of Reserve Bank, provided the bequeathor had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations.
