Frequently Asked Questions (FAQs)

Browse By:
Investment in Immovable property
  • Investment in Immovable property
  • Investment is securities share and company deposit
  • Govt securities and Debt Instruments
  • Inter Depositery Transfer
  • Bharat Sookshma Udamy Suraksha Policy
  • Do Non-Resident Indian citizens require permission from the Reserve Bank to acquire residential/commercial property in India?

    No.

    Was this article helpful? Yes / No

  • Do foreign citizens of Indian origin require permission from the Reserve Bank to purchase immovable property in India for their residential use?

    Yes. However, Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain separate permission of Reserve Bank.

    Was this article helpful? Yes / No

  • In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under 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 NRE/FCNR accounts maintained with banks in India.

    Was this article helpful? Yes / No

  • What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?

    They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

    Was this article helpful? Yes / No

  • Can such property be sold without the permission of Reserve Bank?

    Yes. Reserve Bank has granted general permission for the sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.

    Was this article helpful? Yes / No

  • Can sale proceeds of such property, if and when sold, be remitted out of India?

    In respect of residential properties purchased on or after 26/05/1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds, if any or sale proceeds in respect of properties purchased prior to 26/05/1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.

    Was this article helpful? Yes / No

  • Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?

    Applications for repatriation of sale proceeds are considered provided the sale takes place after 3 years from the date of final purchase deed or from the date of payment of the final instalment of the consideration amount, whichever is later.

    Was this article helpful? Yes / No

  • What is the procedure for seeking such repatriation?

    Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.

    Was this article helpful? Yes / No

  • Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

    Yes. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to 2 houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, provided gift tax has been paid.

    Was this article helpful? Yes / No

  • Can foreign citizens of Indian origin acquire commercial properties in India?

    Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farmhouse/plantation property can be acquired by foreign citizens of Indian origin, provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser's NRE/FCNR accounts maintained with banks in India, and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

    Was this article helpful? Yes / No

  • Can they dispose of such properties?

    Yes.

    Was this article helpful? Yes / No

  • Can sale proceeds of such property be remitted out of India?

    Yes. Repatriation of the original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26/05/1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad, provided the property is sold after a period of 3 years from the date of payment of the final instalment of the consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of Reserve Bank within 90 days of the sale of property in form IPI 8.

    Was this article helpful? Yes / No

  • Can the properties (residential/commercial) be given on rent, if not required for immediate use?

    Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income has to be credited to NRO account.

    Was this article helpful? Yes / No

  • Can NRIs obtain loans for the acquisition of a house/flat for residential purposes from financial institutions providing housing finance?

    Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc. to grant housing loans to NRIs for acquisition of a house/flat for self-occupation subject to certain conditions.

    Was this article helpful? Yes / No

  • Can authorised dealer grant loans to NRIs for the acquisition of flat/house for residential purposes?

    Authorised 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 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 investor's NRE/FCNR/NRO accounts.

    Was this article helpful? Yes / No

  • Can Indian companies grant loans to their NRI staff?

    Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.

    Was this article helpful? Yes / No

  • Can NRIs invest their funds in Government securities or Units of Unit Trust of India?

    Yes, NRIs are freely permitted to invest their funds in Government securities or Units of UTI through authorised dealers Units can also be purchased directly from UTI.

    Was this article helpful? Yes / No

  • Can NRIs make investments in National Savings Certificates issued by Post Offices in India?

    Yes. Investment in National Savings Certificate can be made by NRIs subject to the terms and conditions applicable to the sale/issue of such certificates. However, NRIs are not permitted to invest in bearer securities like Indira Vikas Patra/Kisan Vikas patra.

    Was this article helpful? Yes / No

  • Can Government securities/units be freely transferred or sold?

    Yes, provided the transfers/sales are arranged through an authorised dealer. Units can, however, be repurchased directly by UTI.

    Was this article helpful? Yes / No

  • Are sale/maturity proceeds of Government securities/units/National Savings Certificates allowed to be repatriated abroad?

    If such securities were purchased out of funds remitted from abroad or out of NRE/FCNR accounts, sale/maturity proceeds can be repatriated. Sale/maturity proceeds of securities purchased out of funds in NRO accounts can only be credited to NRO accounts and cannot be remitted abroad. Interest earned during the financial year 1994-95 and onwards can however, be remitted to the extent permitted by Reserve Bank.

    Was this article helpful? Yes / No

  • Is permission of Reserve Bank required for NRIs to invest in proprietary/partnership concerns on non-repatriation basis?

    No. Reserve Bank has granted general permission to NRIs to invest by ways of capital contribution in any proprietary or partnership concern in India on a non-repatriation basis, provided the investee’s concern is not engaged in any agricultural/plantation activity or real estate business. This facility is, however, not available to OCBs.

    Was this article helpful? Yes / No

  • Is permission of Reserve Bank required for making investments in new issues of Indian companies on non-repatriation basis?

    No. Indian companies have been granted general permission to accept investments on no-repatriation basis, in shares/debentures by way of new/rights/bonus issue provided the investee company is not engaged in agricultural/plantation activity or real estate business (excluding real estate development i.e. development of property and construction of the house) or a chit fund or is not a Nidhi company.

    Was this article helpful? Yes / No

  • Are any formalities required to be completed by NRIs for getting the benefit of the above general permission?

    No. However, the firms/companies concerned are required to file declarations with Reserve Bank in form DIN giving particulars of the investments made, within ninety days from the date of the investment.

    Was this article helpful? Yes / No

  • Can NRI individuals make investments in domestic public/private sector mutual funds or money market mutual funds floated by commercial banks and public/ private sector financial institutions on a non-repatriation basis?

    Yes.

    Was this article helpful? Yes / No

  • Can overseas corporate bodies make similar investments in Mutual Funds on a non-repatriation basis?

    OCBS can make such investments only in domestic public/private sector mutual funds. They can also make investments in money market mutual funds.

    Was this article helpful? Yes / No

  • Can NRIs make investments in non-convertible debentures of Indian companies?

    Yes. Applications for necessary permission should be made to Reserve Bank (Central Office) by the concerned Indian company in the form ISD.

    Was this article helpful? Yes / No

  • Can NRIs purchase existing shares/debentures of Indian companies by private arrangement?

    Yes. Reserve Bank permits NRIs, on application in form FNC 7, to purchase shares/debentures of existing Indian companies on a non-repatriation basis. An undertaking about non-repatriation is to be given in form NRU.

    Was this article helpful? Yes / No

  • Is it necessary for a resident, holding securities in Indian companies, to secure any approval from Reserve Bank on his becoming a non-resident for holding such securities?

    No. Reserve Bank has granted general permission to companies in India to enter the overseas addresses of the shareholders in their books, in such cases provided the companies obtain undertakings from the holders that they will not seek repatriation of any income or sale proceeds of the security.

    Was this article helpful? Yes / No

  • Is income/interest earned on investments/deposits held in India by NRIs on a non-repatriation basis allowed to be repatriated?

    Yes. Income/interest accruing during the financial year 1994-95 and onwards on bank deposits and investments held by NRIs with non-repatriation benefits will be eligible for repatriation as under :(a) Up to US$ 1,000 or its equivalent in full and one-third of the balance income earned during the financial year 1994-95; (b) Up to US$ 1,000 or its equivalent in full and two-third of the balance income earned during the financial year 1995-96; (c) The entire income earned during the financial year 1996-97 and onwards; Note: The investment/principal amount of deposits made/held on a non-repatriation basis will, however, not be allowed to be repatriated abroad.

    Was this article helpful? Yes / No

  • What is the procedure to be followed for seeking repatriation in such cases?

    NRIs should designate a branch of an authorised dealer through whom the remittance of income is to be made and make an application in form RCI to the designated branch giving details of incomes earned during the previous financial year along with a Chartered Accountant's Certificate. The designated branch will allow the remittance of net amount (i.e. after payment of tax) or credit it to the NRE/FCNR account of the applicant.

    Was this article helpful? Yes / No

  • What are the schemes available to NRIs for direct investments in India with repatriation benefits?

    NRIs can make investments in new issues of shares/convertible debentures of Indian companies under direct investment schemes such as 24% scheme/40% scheme/100% scheme. They can also invest in the schemes of domestic mutual funds floated by public/private sector institutions/companies and bonds issued by public sector undertakings. Non-Resident investors are not required to apply for permission to invest but the company concerned will have to obtain permission from Reserve Bank.

    Was this article helpful? Yes / No

  • What is the 24% scheme?

    Under the 24% scheme, Indian companies engaged or proposing to engage in any activity including finance, hire purchase, leasing, trading or other services, the establishment of schools/colleges, etc. (except agricultural/plantation activities) are allowed by Reserve Bank to issue shares/debentures to NRIs with repatriation benefits to the extent of 24% of the new issue.

    Was this article helpful? Yes / No

  • What is the 40% scheme?

    Under the 40% scheme, Indian companies engaged or proposing to engage in the following activities are allowed by Reserve Bank to issue share/debentures to NRIs with repatriation benefits to the extent of 40% of the new issue. 1. Industrial and manufacturing units 2. Hotels with 3, 4 or 5-star categories. 3. Hospitals and diagnostic centres 4. Shipping companies 5. Development of computer software 6. Oil exploration services.

    Was this article helpful? Yes / No

  • Is remittance of interest/dividend to NRI investors freely allowed under the 24%/40% scheme?

    Yes. There is no ceiling or restriction on the amount of remittable dividends. Remittance of interest/dividend to NRI investors will be allowed by authorised dealers under the powers delegated to them.

    Was this article helpful? Yes / No

  • What are the specified industries under the 100% Scheme?