NRI Corner

NRI Corner/Desk

Investment destination: India
In recent times, India has emerged as one of the popular real estate destinations for the global investors. According to the consultant Cushman and Wakefield, “Investment in Indian real estate was over US $ 5 billion in the year 2014.”
Real estate is one of the booming industries in the country and your investment will surely flourish in the next five years. It is all set to scale new heights with the emergence of fresh localities in tier one and two cities.  Apart from financial opportunities, a home at your own homeland provides a sense of security and supports you and your family emotionally.
Sobha Limited understands your concerns and apprehensions. That’s why it provides quality construction, homes at strategic locations and maintains a complete transparency in every transaction.

The future of investment: Real Estate
India is the world’s fourth largest economy and it has emerged as the most sought after destination for global business. The favourable socio-economic profile and government initiatives have given a new boost to the Indian realty sector. According to the United Nations estimate, India leads in the rate of change of urban population amongst all the BRIC nations (Brazil, Russia, India and China).
Who is a Non Resident Indian (NRI)?
According to the Foreign Exchange Management Act (FEMA) of 1999, an Indian Citizen who stays abroad for employment/business or stays outside the country for an indefinite period of time is considered to be an NRI. (Persons Posted in U.N. organisations and official deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as nonresidents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs).
Who is a Person of Indian Origin (PIO)?
PIO is a person of Indian origin whose ancestors were born in India and he/she has an Indian ancestry but not an Indian citizenship. As per the FEMA of 1999, a person of Indian origin can avail bank accounts, invest in shares and securities in India.
So, he or she
  • has had Indian Passport at any time
  • himself/herself, parents or grandparents were Indian citizens (of the Constitution of India or Citizenship Act, 1955 (57 of 1955)
  • is a spouse of an Indian citizen or a person who held an Indian Passport at any time
  • is a spouse of a person who either was a citizen of India or his parents or grandparents were a citizen of India
Can an NRI/ Foreign national acquire immovable residential property in India?
According to the RBI guide lines, an NRI/PIO can acquire a residential property in India by a way of gift from an Indian, NRI/PIO or purchase it.  He or she can even 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 FEMA, 1999.
Do NRIs/ Foreign citizens of India need to submit any documents with RBI when purchasing immovable residential property in India?
When NRIs/PIOs purchase an immovable residential property under general permission they are not required to file any documents with the Reserve Bank of India.
Are there any restrictions on the number of residential property that an NRI/PIO can purchase?
No, there aren’t any restrictions.
Can an NRI transfer his residential property by way of sale?
An NRI can sell his or her property in India to an Indian resident/ NRI / PIO.
Can a PIO transfer his residential property by way of sale?
Under general permission a PIO can sell his or her residential property in India to an Indian citizen only.
Can an NRI/PIO transfer his residential property by way of gift?
Yes. An NRI/PIO can transfer their residential property in India by way of a gift to an Indian resident/NRI/PIO.
What mode of payment can an NRI/PIO make to purchase a residential property in 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/her NRE/FCNR (B)NRO accounts. No consideration shall be paid outside India.
Can NRIs obtain loans for acquisition of a house /flat for residential purpose from authorised dealers/ financial institutions providing housing finance?
Reserve Bank of India has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc. and authorised dealers to grant housing loans to NRIs for acquiring a house/flat for personal use but subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period of 15 years out of inward remittances or out of funds held in the investors' NRE/FCNR/NRO accounts.
Can an NRI give their residential property on rent if not required for immediate use?
Reserve Bank of India has permitted NRIs to let out any immovable property in India on rent. The rental income or proceeds of any investment of such income are eligible for repatriation.
What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?
NRIs and PIOs are required to file a declaration in a form IPI 7 with the Central Office of Reserve Bank at Mumbai (within a period of 90 days) from the date of purchase of the property or final payment of the purchase consideration along with a certified copy of the document which would be an evidence of the transaction and bank certificate regarding the consideration paid.
Can an NRI/PIO repatriate the proceeds in case the sale proceeds were deposited in the NRO account?
NRI/PIO may repatriate up to US $ 1 million per financial year (April-March) from their NRO account which would also include the sale proceeds of immovable property. There is no lock in period for sale of immovable property and repatriation of sale proceeds outside India.