| Non
Resident Indians - NRI
A
non-resident Indian (NRI) is a citizen of
India who has migrated to another country, a person of Indian origin
who resides outside India, or a person of Indian origin who has born
outside India. They are residing across the world with an estimated
population of 40 to 100 million. Presently, there are many options
available for non-residents
to invest in India. 'Real Estate' is
one of the best option for non-residents because Indian
real estate is witnessing a wide range of transformations that
are expected to make India a preferred destination. The reasons for
this being the fact that real
estate sector in India is being self-organized, professionalized,
and India is also one of the emerging economies of the world. According
to experts, the boom in the realty sector is most likely to continue
till 2015 making investment in real estate a lucrative option for
at least five-six more years. Also, Investment
in Indian Real Estate is one of the best option to earn maximum
benefits or returns.
Many NRIs and Persons of Indian Origin
(PIO) across the world are intended to invest in Indian Real Estate
- in both commercial
and residential
properties. NRIs and PIOs also plan
to buy such properties as an investment, and rent
them out to make a steady source of income. The IT boom in India
has brought back NRI's to invest in their
country as the economy is climbing the ladder high. Recent landmark
decisions to open Foreign Direct
Investment (FDI) to real estate will help the industry greatly.
NRI Investments in India
Government of India has simplified and liberalized the rules regarding
purchase, rent and sale of immovable property by Non
Resident Indians (NRIs) in recent years. Let's have a look
at the current regulations for NRIs regarding
purchase, renting out and sale of residential / commercial property:
Residential Property
- Indian Citizens
Indian citizens who are residing abroad can purchase a residential
(apartment, house, etc) property or immovable property for residential
use without seeking any permission from the Reserve Bank of India
(RBI).
- Foreign Citizens of Indian Origin
RBI has also permitted foreign citizens of Indian origin, whether
resident in India or not, to attain by purchase or inheritance,
hold and transfer or dispose of by way of sale or immovable property
in India for residential purpose subject to certain conditions.
In case of a person resident outside India, they can attain a
maximum of two properties, without RBI permission.
The RBI has also delegated the powers to authorized dealers (Banks)
to grant loans to NRIs against the security
of NRE/FCNR deposits (subject to certain conditions) for purchase
of immovable property. There is also no limit on the number of
properties an NRI can buy.
Commercial property:
Foreign citizens of Indian origin can
purchase and sell
commercial property in India subject to certain conditions.
Some of these conditions are listed as follows:
- Purchase consideration should be paid out of foreign remittance
or out of funds in NRE/ FCNR account.
- Repatriation to the level of original investment made shall
only be permitted subject to accomplishment of the following conditions:
- Property has been purchased on or after May 26, 1993.
- The property is not transferrable before three years from the
date of purchase deed or from the date of disbursement of final
installment, whichever is later.
- The balance sale advanced should be credited to NRO account.
Letting out of the property is acceptable as per the general permission
given by the RBI.
Repatriation:
It is mandatory to take the prior approval of RBI before the repatriation
of sale proceeds, provide:
- Such sales should be conducted after three years from the date
of acquisition or from the date of payment of final installment
of consideration, whichever is later.
- Such property is bought on or after May 26, 1993.
- Repatriation is limited to the level of foreign exchange paid
for acquirement of immovable property. In case of sale of residential
properties, the amount equivalent in foreign exchange paid for
acquisition of maximum two properties and subject to certain conditions.
RealtyZing - Your Home Loan Advisor
It is mandatory to take the prior approval of RBI before the repatriation
of sale proceeds, provide:
- Such sales should be conducted after three years from the date
of acquisition or from the date of payment of final installment
of consideration, whichever is later.
- Such property is bought on or after May 26, 1993.
- Repatriation is limited to the level of foreign exchange paid
for acquirement of immovable property. In case of sale of residential
properties, the amount equivalent in foreign exchange paid for
acquisition of maximum two properties and subject to certain conditions.
Facilities to Returning Indians
There is no requirement of declaring or surrendering the foreign currency
assets abroad for NRIs returning to India
after a continuous stay abroad for one year and above. They are allowed
to retain their foreign currency accounts with banks abroad. Also
they have the complete independence to utilize these assets as well
as income earned or stale proceeds received subsequently.
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Indian Real Estate Portal
