NRI Investment
1. Who Is Nri / Pio / Oci ?
Who is a NRI (Non Resident Indian) ?
A. A non-resident Indian (NRI) is a citizen of India who holds an Indian passport and has temporarily emigrated to another country for six months or more for employment, residence, education or any other purpose.
A person who has gone out of India or who stays outside India, in either case-
- For or on taking up employment outside India,
- For carrying on outside India a business or vocation outside India,
- For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.
2. Who Is A Pio (Person Of Indian Origin) ?
A person of Indian origin (PIO) is a person of Indian origin or ancestry who was or whose ancestors were born in India or nations with Indian ancestry but is not a citizen of India and is the citizen of another country. A PIO might have been a citizen of India and subsequently taken the citizenship of another country. Other terms with vaguely the same meaning are overseas Indian and expatriate Indian. In common usage, this often includes Indian-born individuals (and also people of other nations with Indian ancestry) who have taken the citizenship of other countries.
A. A citizen of any country (other than a citizen of Bangladesh or Pakistan) is deemed to be a Person Of Indian Origin (PIO), if, –
- For or on taking up employment outside India,
- For carrying on outside India a business or vocation outside India,
- For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.
3. Who Is A Oci (Overseas Citizenship Of India) ?
The Overseas Citizenship of India (OCI) Scheme was introduced by amending the Citizenship Act, 1955 in August 2005. The Scheme provides for registration as Overseas Citizen of India (OCI) of all Persons of Indian Origin (PIOs) who were citizens of India on 26th January, 1950 or there after or were eligible to become citizens of India on 26th January, 1950 except who is or had been a citizen of Pakistan, Bangladesh or such other country as the Central Government may, by notification in the Official Gazette, specify.
NRI Investment
India is the investment hotspot for global money. Top fund managers, investors and analyst are swearing by the long term, domestic demand driven, growth story of India, supporting valuations and financial market outperformance.
Why Indian Real Estate?
Real Estate with its extensive market reach, experience and cutting edge technology platforms, provide the perfect vehicle for you to invest and benefit from the Indian real estate. Being an NRI, time distance and lack of knowledge will no longer come in the way of your investments.
Buying A Property
What Should A NRI Buyer Keep In Mind While Purchasing A Residential Flat ?
Some of the factors to consider while purchasing a flat are;
- Locality i.e. transport, schools, hospitals, market, business district, entertainment centres, hotels, restaurants, pollution levels
- Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area
- Car parking space
- Quality of construction
- Reputation of the builder or seller
- Sufficient water and electric supply, other utilities
- Cost components : price, stamp duty, registration charges, transfer fees, monthly outgoings and society charges, costs of utilities
- Potential for resale or renting out of the property
- Any other distinguishing features or advantages of the property
WHAT IS THE CHECKLIST FOR BUYING A RESIDENTIAL PROPERTY?
Keep in mind the following things while buying a residential property;
- Market Trends about prevalent rates of property in the vicinity and last known transactions.
- Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any on the property must be cleared before completion of purchase of the property. The title of the Vendor to the property must be clear and marketable.
- Check for approved layout plan and approved building plan with number of floors
- Clearance from municipality, electricity, water, pollution and lift authorities
- Check the building bye-laws in that area to verify any issue with setback, side setback, height, etc.
- Confirm transfer fees, stamp duty and registration charges to be paid on purchase of the property as well as outgoings to be paid for the property, i.e., property tax, water and electricity charges, society charges and maintenance charges.
DO NRIS REQUIRE CONSENT OF THE RESERVE BANK TO BUY IMMOVABLE PROPERTY IN INDIA?
No, NRI’s do not require permission to buy any immovable property in India other than agricultural/plantation property or a farmhouse.
In What Way Should The Purchase Consideration For The Immovable Property Be Paid Under The General Permission?
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from any non-resident accounts maintained with banks in India.
Is There Any Limit On The Number Of Housing Properties That May Be Purchased By An NRI?
There are no limits on the number of residential properties that may be bought by an NRI. However, repatriation (the process of converting a foreign currency into the currency of one’s own country) is allowed only in respect of two such properties.
WHAT ARE THE GUIDING PRINCIPLES FOR GETTING HOLD OF AGRICULTURAL LAND / PLANTATION PROPERTY / FARMHOUSE BY NRIS AND FOREIGN CITIZENS OF INDIAN ORIGIN?
All requests for purchase of agricultural land/plantation property/farm house by any person residing outside India may be made to:
The Chief General Manager,
Reserve Bank of India, Central Office
Exchange Control Department
Foreign Investment Division (III)
Mumbai 400 001
Selling A Property
CAN A HOME/LAND BE SOLD WITHOUT THE PERMISSION OF RESERVE BANK?
Yes, the Reserve Bank has granted general permission for sale of property. However, where another foreign citizen of Indian origin purchases the property, funds towards the purchase consideration should either be remitted to India or paid out of balances in non-resident accounts maintained with banks in India.
CAN SALE PROCEEDS OF SUCH PROPERTY IF AND WHEN SOLD BE REMITTED OUT OF INDIA?
In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a NRI or PIO, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied:
The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999;
NRIs/PIOs can effect remittance of sale proceeds of immovable property in India irrespective of the period for which the property was held. The sale proceeds allowed to be repatriated should, however, not exceed the foreign exchange brought in to acquire the said property. In case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties, if the property was purchased from funds held in NRE Account.
The amount sought to be repatriated abroad should not exceed the amount paid for acquisition of the immovable property in the foreign exchange received through normal banking channels or out of funds held in FCNR or NRE Account. In case of investment out of NRE Account the amount to be calculated as foreign currency is equivalent value as on the date of payment for acquisition of the said property.
Renting A Property
CAN NRI'S/PIO'S RENT OUT THE PROPERTIES (RESIDENTIAL/COMMERCIAL) IF NOT REQUIRED FOR IMMEDIATE USE ?
Yes. NRI/PIOs can freely rent out their immovable property, whether purchase through application of forex or otherwise, without seeking any permission from the RBI. The rental income being a current account transaction is repatriable outside India, only if proper tax is paid or provided for.
Loan
DOES RBI HAVE ANY GUIDELINES FOR LOANS TO NRIS/PIOS?
There are guidelines issued by the Reserve Bank of India for grant of housing loans to NRIs. The guidelines are;
- The loan amount shall not exceed 85% of the cost of the housing unit.
- Own contribution, which is the cost of housing unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
- Reimbursement of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
CAN AUTHORIZED DEALERS GRANT LOANS TO NRIS FOR PURCHASE OF A FLAT/HOUSE FOR RESIDENTIAL INTENTION?
Authorized dealers have been granted permission to grant loans to NRIs for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. Repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investors’ NRE/FCNR/NRO accounts.
CAN AUTHORIZED DEALERS GRANT HOUSING LOAN TO NRIS WHERE HE IS A PRINCIPAL BORROWER WITH HIS RESIDENT CLOSE RELATIVE AS A CO-APPLICANT / GUARANTOR OR WHERE THE LAND IS OWNED JOINTLY BY SUCH NRI BORROWER WITH HIS RESIDENT CLOSE RELATIVE?
Yes. Such housing loans availed in rupees can also be repaid by the close relatives in India of the borrower.
WHAT ARE THE DOCUMENTS REQUIRED ALONG WITH THE APPLICATION?
The following documents are normally required to be submitted along with the application;
- Photocopy of the labor contract and English translation duly countersigned by your employer.
- Latest salary certificate (in English) specifying the following: name (as it appears in the passport), date of joining, passport number, designation, perquisites and salary.
- Photocopy of labor card/identity card.
- Photocopy of valid resident visa stamped on the passport.
- Photocopy of monthly statement of local bank account for the last 4 months.
- Property related documents.
