Everything that a Non Resident Indian (NRI) needs to know to invest
in property in India
Q.Who is a NRI ?
A NRI is a person resident outside India who is either a citizen
of India or a person of Indian origin. A NRI is an Indian Citizen
who has migrated to another Country. For all official purpose
the Government of India considers Indian National away from India
for more than 182 days, in a year.
Q.Who is a PIO?
A person of Indian origin means an individual (not being a citizen
of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China
or Iran or Nepal or Bhutan) who:
i) held an Indian Passport at any time, or
ii) who or whose father or paternal grand father was a citizen
of India by virtue of the Constitution of India or the Citizenship
Q.What are the types of Property can
a NRI/PIO purchase in India?
There are no restrictions on the numbers of Residential/Commercial
Properties (other than agricultural land/farm house/plantation)
that can be purchased.
Q.How should the purchase of residential
immovable property be paid for by NRI/ PIO under the general permission?
The purchase consideration should be met either out of inward
remittance in foreign exchange through normal banking channels,
or out of funds from NRE/FCNR(B)/NRO accounts maintained with
banks in India.
Q.Does a NRI/PIO, requires to have a
company in India or abroad or both for purchasing of property?
Q.Can NRI/ PIO's acquire or dispose
residential property by way of gift?
Yes, NRIs and PIOs can freely acquire immovable property in India
by way of gift either from
(i) person resident in India
However the property can only be commercial or residential.
Again NRIs and PIOs may gift residential/ commercial property
(i) person resident in India
(iv) Foreign national of non Indian origin - with approval of
Q.Is there are any Lock in period for
Currently there is no lock in period.
Q.Can NRI/PIO sell their purchased property
without the permission of Reserve Bank?
Yes. Reserve Bank of India has granted general permission for
sale of such property to the following categories:-
" To a NRI
" To a PIO (If the seller is a PIO, then a prior approval
is required from RBI)
" To a person Resident of India
Q.Can the sale proceeds of such property
(if and when sold) be remitted/repatriated out of India?
Yes the sale proceeds can be remitted/repatriated out of India
In the event property acquired out of foreign exchange source
i.e. remittance through normal banking channels/ debit to NRE/
FCNR(B) accounts, the amounts to be repatriated should not exceed
the amount paid for such property from such source. However, repatriation
of sale proceeds purchased out of foreign exchange is restricted
to not more that two residential properties, in a block of one
year, with a facility of crediting the Capital gain to the NRO
Again in the event the property was acquired out of Rupee source,
an amount not exceeding USD one million, per financial year, subject
to tax compliance, out of balance held in NRO account, may be
Q.In case of repatriation is there any
tax liability to the Indian Government?
Yes, during repatriation Capital Gains (Long Term/Short Term)
as applicable will be attracted.
Long Term Capital Gains: For properties held for 36 months or
more are termed as
Long Term Capital Assets, and currently attracts a rate of 22.6%
(Fin. Year: 2007-08)
Short Term Capital Gains: For properties held for less than 36
months are termed as
Short Term Capital Assets, and currently attracts a rate of 33.9%
Q.Can rental Income be repatriated?
Repatriation of income derived out of letting of immovable property
NRI/PIO can rent out the property without approval of Reserve
Bank. Rent received can be credited to NRO/NRE account or remitted
abroad. Powers have been delegated to the Authorised Dealers to
allow repatriation of current income like rent, interest, dividend
etc. of NRI/PIO who do not maintain an NRO account in based on
an appropriate certification by Chartered Accountant, certifying
that the amount proposed to be remitted is eligible for remittance
and that applicable taxes have been paid/ provided for.
Disclaimer : The purpose of this FAQ is to
provide the visitors a general understanding on the various issues
relating to House Property. The above FAQ been prepared on the
basis of advice received and may vary from person to person, based
on facts of such case. Reasonable efforts have been taken in collecting,
preparing and providing quality information, but we do not warrant
or guarantee the accuracy, completeness, adequacy or currency
of the information. The contents of the FAQ are subject to changes
/ amendments made by the CBDT / Finance Ministry.