We are spread across the world and there is no limit for crossing the border of our own country. Those who are Indian citizen and residing outside India is known as Non Resident Indian (NRI). The common reason for travelling abroad is to get the better job opportunity or higher education. Some of them will come back to India after few years work or some of them would get the residing country’s citizenship and planning to settle their family outside India. One common difficulties for the NRI is to buy or sell some thing in India.
Because there are certain rules enforced for those who are not in the Indian soil. This rules are enforced to protect the India from any illegal activities like money laundering, etc. This article explores the most important rules on buying and selling the immovable properties in India when you are working abroad. If you are NRI and experienced any difficulties or posses any experience on the transactions, please post your thoughts in the comments section. If you are not aware of the NRI status and the various status on residing abroad, please read the below article before start reading this article.
Who can acquire immovable property in India?
If you are staying abroad, you can buy the immovable properties in India only if your NRI status is fall under the following categories:
- Non-Resident Indian (NRI)
- If you are Indian citizen and staying abroad, then you are NRI
- If you are not Indian citizen but your any of the parents(it can be any ancestral relation) are Indian citizen, then you are considered as Person of Origin (PIO).
What can be purchased?
You can not purchase anything you want in India when you are NRI. You can buy :
- Residential Property
- Commercial Property
- Agricultural Land
- Plantation Property
- Farm House
A foreign national who is a ‘person resident in India’ within the meaning of Section 2(v) of FEMA, 1999 can purchaseimmovable property in India. But, he has to satisfy the approvals required by the state govt on the status of his residence. If you are from any of the countries Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan, need the prior approval from Reserve Bank of India (RBI). When you are buying the property, you can not add any foreigner (who are not Indian by origin) as the second holder of the property.
Can NRI Receive Immovable Property as Gift?
If you are NRI then you can freely get the property as gift from any of the following persons:
- A person resident in India; or
- An NRI; or
- A PIO.
Mode of Payment for the Transaction
- The funds can be remitted through normal banking channels.
- Funds held in NRE / FCNR / NRO account maintained in India
No payment can be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.
Rules on Sale of Immovable Property
If you are selling any commercial or residential property other than the agricultural land, you can easily repatriate(taking money to abroad) the sale amount if you can meet the following criterias:
- The amount of sale doesn’t exceed
- the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels, or
- the amount paid out of funds held in Foreign Currency Non-Resident Account, or
- the foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; and
- If you are selling the residential property, the maximum property allowed is two.
Other Key Points to Remember
- NRI can rent out the acquired property in India. The rental income can be remitted to his NRE/NRO account or to the foreign bank.
- The sale proceeds may be credited to NRO account of the NRI /PIO.
This article explores the important key points related to acquiring the property in India. If you are NRI and has bought the property in India, please share your thoughts with us. Post your ideas in the comments section. Still there are many aspects like transfer of property, utilization of money earned on the sales are not covered in the article. I will come up with another article with more details.