Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

NRI PROPERTY REGULATIONS

FAQ on liberal provisions for purchase & repatriation of sale proceeds upto 1 million USD per annum

Q.1. Is a Non Resident eligible to purchase immovable property in India? 
A.1. Under the general permission granted by the Reserve Bank of India (RBI), every NRI being a citizen of India or a Person of Indian Origin (PIO), that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who at any time, held Indian passport, or who or either of whose father or grandfather was a citizen of India can freely purchase immovable property in India.
The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land or plantation property or farm house in India.
 
Q.2. Are any documents required to be filed with RBI after purchase?
A.2. No.  An NRI/PIO who has purchased residential/commercial property under general permission, is not required to file any documents with RBI. 
 
Q.3. How many properties can an NRI or PIO purchase under the general permission?
A.3. There is no restriction on the number of residential/commercial properties that can be purchased.
 
Q.4. Can a person who had bought immovable property when he was a resident, continue to hold such property even after becoming an NRI or PIO?
A.4. Yes. He can continue to hold the residential or commercial property or agricultural land, plantation property or farm house in India, without the approval of RBI.
 
Q.5. Whether an NRI or PIO can acquire immovable property in India either by way of gift or inheritance?
A.5. Yes. An NRI or PIO can freely acquire any immovable property by way of gift or inheritance either from a person resident in India or even another NRI or PIO.  However, agricultural land or plantation property or farm house in India cannot be acquired by way of gift. The same can only be received under inheritance.
 
Q.6. Can an NRI or PIO sell or gift his immovable property?
A.6. An NRI/PIO can sell or gift his residential or commercial property in India to any person. However, an NRI or PIO can sell agricultural land or plantation property or farm house only to a person resident in India, who is a citizen of India.
 
Q.7. Is an NRI or PIO eligible to repatriate the sale proceeds of immovable property?

A.7. An NRI or PIO can repatriate the sale proceeds of immovable property in India if the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels or by debit to NRE or FCNR account, to the extent of the purchase consideration paid for the property. The capital gains can be credited to the NRO account from where the NRI or PIO may repatriate an amount up to USD one million per financial year as discussed hereinafter. 

Q.8. Can an NRI or PIO repatriate the sale proceeds deposited in NRO account?
A.8. Where the sale proceeds are credited to an NRO account, in respect of an immovable property purchased out of rupee resources or acquired through gift or inheritance, the NRI or PIO can repatriate up to USD one million per financial year (April-March). This would also include sale proceeds of assets acquired by way of inheritance or settlement. Such repatriation is permitted for all bonafide purposes subject to the satisfaction of the authorized bank maintaining the NRO account on payment of applicable taxes.  
 
Q.9. Can an NRI or PIO rent out the residential or commercial property?
A.9. Yes.  An NRI or PIO can rent out the property without the approval of RBI. Rent received can be credited to NRO account. Powers have been delegated to the authorized banks to allow repatriation of current income like rent, dividend, pension, interest, etc. of an NRI or PIO based on an appropriate certification by a Chartered Accountant, certifying that the applicable taxes have been paid or provided for in respect of the amount proposed to be remitted.
 

Leave a Reply

You must be logged in to post a comment.

Powered by Epaperz.com | Hosted at HostADomainNow.com