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Some general guidelines to buy a property in India
- NRIs and PIOs may acquire any immovable property for residential/commercial purposes in India, other than agricultural/plantation/farm house, without the permission of Reserve Bank of India (RBI).
- No declaration is required to be made to the RBI. Only information regarding details of the property and costs incurred should be given to the RBI. This will help at the time of repatriation.
- No permission from the RBI is required to transfer any immovable property other than the agricultural land or plantation property or a farm house in India by way of sale to a person resident in India.
- The lock-in period of three years has been done away with.
- If property has been acquired through NRE (Non Resident External) account, then repatriation is allowed only for two residential properties.
- NRI/PIO is permitted to transfer his residential commercial property in India to an authorized dealer/housing finance institution in India by way of mortgage.
- NRI/PIO can avail housing loan in Indian currency from an authorized dealer or housing finance institution in India approved by the National Housing Finance Bank for purchase of residential accommodation or for the purpose of repairs/renovation/improvement of residential accommodation, subject to certain terms and conditions.
- Sale proceeds of residential/commercial property received by way of gift by NRI/PIO can only be credited to NRO (Non Resident Ordinary) account.
- Sale proceeds of any immovable property in India inherited by a person residing outside India (i.e. NRI or PIO or foreign national of non-Indian origin resident outside India) from a person residing outside India cannot be repatriated by him or his successor without prior permission of the RBI.
- NRI/PIO can rent out the residential/commercial property purchased out of foreign exchange/rupee funds.
- The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR (Foreign Currency Non Resident) accounts maintained with banks in India.
- The non-resident Indians who are staying abroad may enter into an agreement through their relatives and/or by executing the Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (which include negotiating with the builder or developer, drafting and signing of agreements, taking possession etc.). These formalities can be completed through some known person who can be given the Power of Attorney for this purpose. Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be drafted on the stamp paper bought in India.
- Residential property can be given on rent if not required for immediate residential use. Rental income cannot be remitted abroad and will have to be credited to the ordinary non-resident rupee account of the owner of the property.
February 11th, 2011 | |
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Category: NRI Helpline
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