FREQUENTLY ASKED QUESTIONS ABOUT NRI INVESTMENT IN INDIA

1. Who are NRI's?
   
   The following persons constitute Non-Resident Indians:-
   
   

   1. Indian citizens who stay abroad for employment or for carrying on any business or vocation or for any other purpose in circumstances indicating an indefinite period of stay outside India.
   2. Indian citizens working abroad on assignments with foreign Governments, Government agencies or international/multinational agencies like United Nations Organization (UNO), International Monetary Fund (IMF), World Bank (IBRD), etc.
   3. Officials of Central and State Governments and public sector undertakings deputed abroad on assignments with foreign Governments/agencies/ organizations or posted to their own offices (including Indian Diplomatic Missions) abroad.

   
   Non-resident Indians become resident in India only when they return to India for employment or for carrying on in India any business or vocation or for any other purpose indicating an indefinite period of stay in India. They are not regarded as persons resident in India during their short visits to India, say, on holiday, leave, etc.
   
   
2. Can a NRI invest in India in immovable properties?
   
   The Reserve Bank of India has allowed NRIs to use their foreign currency assets which have been earned and accumulated by them lawfully while they were resident outside India. The RBI has granted general exemption to them from the requirement of surrendering foreign exchange and income there on, in any currency (other than the currency of Nepal or Bhutan): - acquired by them lawfully i.e. without contravention of FERA, 1973, while they were resident outside India, and/or through employment, business or vocation outside India, taken up or commenced while they were residing outside India provided that they were resident outside India for a continuous period of not less than one year.
   
   
3. Who are Foreign Citizens of Indian Origin?
   
   Foreign citizen is deemed to be of Indian origin if: -
   
   He held an Indian passport at any time, or
   He or his father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 provided that citizens of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka and Nepal shall be deemed to be not of Indian origin.
   
   
4. Can a person of Indian origin acquire any immovable property in India by way of inheritance?
   
   A person of Indian origin, resident outside India, may acquire any immovable property in India by way of inheritance from a person, resident outside India, who had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition by him or the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. Immovable property, by way of inheritance, can also be acquired by a person of Indian origin resident outside from a person resident in India.
   
   
5. Can a person of Indian origin resident outside India gift properties acquired earlier in terms of the provisions of FERA/FEMA?
   
   Yes. A person of Indian origin resident outside India may transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India. A Person of Indian origin resident outside India may also transfer by way of gift agriculture land/farm house/plantation property in India to a person resident in India who is a citizen of India.
6. Can Foreign Citizens of Indian Origin invest in India?
   
   The Reserve Bank of India has granted general permission to Foreign Citizens of Indian origin, (whether resident in India or not), to acquire and dispose of, immovable properties (other than agricultural land/farm house/plantation property) situated in India subject to the fulfillment of the following conditions:

   1. Acquisition/Disposal of Residential Properties in India other than by way of Gift.

   1. Property is acquired by way of purchase or inheritance for the person's bonafide residential use and transferred 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 a bank in India.
      Property purchased is not let out except where it is not immediately enquired for the purchaser's own residential use.
      A declaration is submitted to Reserve Bank (Central Office) about such acquisition 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.
      Income accruing by way of rent or sale proceeds of the property or income arising out of investment of such proceeds is credited to the person's NRO account (if the property is held by a non-resident foreign citizen of Indian origin) or to the Resident Rupee Account i.e.Q.A.22 Account (if the property is held by a foreign citizen of Indian origin resident in India) with a bank 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.