FREQUENTLY ASKED QUESTIONS ABOUT NRI INVESTMENT IN INDIA
In respect of residential properties purchased on or after 26th May 1993, Reserve Bank would consider applications for the repatriation of sale proceeds up to the consideration amount remitted in Foreign exchange for the acquisition of the property (only up to two such properties) provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for the purpose should be made to Reserve Bank (Central Office) in form IPI 8 within 90 days of the sale of the property.
b . Acquisition by way of purchase or inheritance or disposal by way of sale of Commercial Properties in India.
Property (not being agricultural land/farm house/plantation property) situated in India is acquired by way of purchase or inheritance and transferred or disposed of by way of sale.
Consideration for the property purchased is met out of foreign exchange remitted from abroad through normal banking channels or funds withdrawn from the purchaser's NRE/FCNR account maintained with banks in India.
A declaration is submitted to Reserve Bank (Central Office) about acquisition of the commercial property in form IPI 7 within a period of 90 days from such acquisition/final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
Reserve Bank would consider applications for repatriation of original investment in commercial property in respect of properties purchased on or after 26th May 1993 up to the consideration amount remitted in foreign exchange for the acquisition of the property provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.
The balance amount of sale proceeds of the properties should be credited to the seller's NRO account or Resident Rupee Account (Q.A. 22 Account) in the case of resident foreign citizens maintained with a bank in India. Applications for repatriation of the amount should be made to Reserve Bank (Central Office) in form IPI 8 within 90 days of the sale of the property.
7 . Are there any Schemes for NRIs in Housing Development in India?-
Non-Resident Indian Investment in Housing
The Indian Government has launched a scheme to attract NRI investment in housing and real estate development. A nodal cell in the National Housing Bank (NHB) has been created to co-ordinate decisions. The cell has been having representatives from State Governments and other agencies and will finalize policies and procedures related to NRI investment under the agencies of the Ministry of Urban Development.
NRIs settled in various countries will be permitted to acquire, rent, gift property and trade in housing colonies in different cities, so long as they make payment in foreign exchange. The original investment will be allowed to be repatriated after taxation in respect of manufacture of building materials, ventures in real estate and housing finance institutions will be permitted. Reserve Bank of India will issue appropriate notifications.
Upto 5% of sale proceeds in each scheme subject to a ceiling of Rs. 2.5 million, excluding the foreign exchange for travel and advertisement will be released in foreign exchange to the builders towards expenses for making the houses including payment of commission and promotion of schemes on an international basis. Depending on the approved status of builders necessary clearance in respect of the builder's project will be given for the construction and provision of services at the local level by the State and civic agencies.
8 . Is there any liberalization for NRI's?
New Liberalized Rules For Acquisition of Immovable Property by NRIs
Residential Property - Foreign citizens of Indian Origin, whether resident in India or not, are allowed to acquire, hold, transfer or dispose of, by sale or inheritance, immovable properties situated in India. The only condition is that the sale proceeds of such properties and income accruing thereon will not be eligible for repatriation outside India.
Further incentives of foreign citizens of Indian Origin - Reserve Bank of India has since allowed repatriation of original investment in equivalent foreign exchange on residential properties, after obtaining prior approval, subject to a maximum of two houses, subject to the following conditions:
(I). The residential properties are purchased on or after 26th May, 1993.
(II). The properties are not transferred or disposed of by way of sale for a period of three years from the date of the final purchase deed or from the date of payment of final installment where the agreement for purchase so provides;
(III). Only the amount of sale proceeds equivalent to the original investment in foreign exchange, if sold after three years, will be allowed to be repatriated outside India and the balance amount of sale proceeds of the property should be credited to seller's Non-resident Ordinary (NRO) Account with an authorized bank in India.
9 . Where would I get more information?
All NRI investment related information can be held from-
Central Government Organization Assisting NRIs
Indian Investment Centre
Jeevan Vihar Sansad Marg
NEW DELHI - 110 001
Tel : 91 11 2373 3673
Fax : 91 11 2373 2245
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