FEMA provisions for transfer of immovable property for NRI

[vc_row rt_row_background_width=”default” rt_row_style=”default-style” rt_row_borders=”” rt_row_paddings=”true” rt_bg_effect=”classic” rt_bg_image_repeat=”repeat” rt_bg_size=”cover” rt_bg_position=”right top” rt_bg_attachment=”scroll” rt_bg_video_format=”self-hosted” rt_padding_top=”0″][vc_column rt_wrp_col_paddings=”false” rt_border_top=”” rt_border_bottom=”” rt_border_left=”” rt_border_right=”” rt_border_top_mobile=”” rt_border_bottom_mobile=”” rt_border_left_mobile=”” rt_border_right_mobile=”” rt_bg_image_repeat=”repeat” rt_bg_size=”auto auto” rt_bg_position=”right top” rt_bg_attachment=”scroll”][vc_tta_accordion style=”modern” shape=”square” color=”sky” spacing=”2″ gap=”2″ c_icon=”triangle” c_position=”right” active_section=”1″ no_fill=”true” collapsible_all=”true”][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Whether NRIs and OCIs can acquire and transfer immovable property in India without prior approval of RBI (i.e. under general permission) ?” tab_id=”1594970424543-68fc7709-e77e”][vc_column_text el_class=”tdsrates”]

Particulars From/To
Purchase from (other than agricultural land/ farmhouse/ plantation etc.) Resident/ NRI/ OCI
Acquire as gift (other than agricultural land/ farmhouse/ plantation etc.) Resident/ NRI/ OCI – who is a relative
Acquire (any IP) as inheritance a. Any person who has acquired it under laws in force;
b. Resident
Sell (other than agricultural land/ farmhouse/ plantation etc) Resident/ NRI/ OCI
Sell (agricultural land) Resident
Gift (other than agricultural land i.e. residential/ commercial property ) Resident/ NRI/ OCI
Gift (agricultural land) Resident

[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”How can NRI / OCI make payment for purchase of residential/commercial property in India ?” tab_id=”1594970424555-15e09168-68d3″][vc_column_text]Payment can be made by NRI / OCI only out of funds remitted to India through normal banking channels or funds held in NRE / FCNR / NRO a/c maintained in India. Payments cannot be made through travellers’ cheque or foreign currency note.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Whether any documents are required to be filed by NRI/OCI with the RBI for acquisition of any immovable properties as mentioned in above table ?” tab_id=”1594970603844-c2e8e692-e7f7″][vc_column_text]NRI/OCI who has acquired immovable property in India under general permission is not required to file any documents with RBI.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”How many immovable properties can NRI / OCI acquire under the general permission ?” tab_id=”1594970626550-9509f573-c6f6″][vc_column_text]There are no restrictions on the number of immovable properties that can be acquired. However, they can repatriate sales proceeds of only 2 residential properties outside India.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can a non-resident inherit immovable property in India ?” tab_id=”1594970648976-783a43ad-c37c”][vc_column_text]Yes, a person resident outside India (NRI/OCI) can inherit and hold immovable property in India from a person resident in India or Person resident outside India.
However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong and Democratic People’s Republic of Korea should seek specific approval of RBI.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”A non-resident has inherited an agricultural land in India from his father who was also a non-resident. Is he permitted to inherit such land from a non-resident ?” tab_id=”1594970671005-ce606b79-813e”][vc_column_text]Yes, he is permitted to inherit agricultural land property from his father who was also a non-resident provided the father had acquired the property in accordance with the Foreign Exchange laws in force.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Suppose a NRI/OCI acquired agricultural land by way of inheritance, to whom can such property be transferred ?” tab_id=”1594970694781-67e9a523-b9d8″][vc_column_text]The NRI/OCI may transfer agricultural land/ farm house/ plantation property in India, by way of gift or sale to a person resident in India, who is a citizen of India.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can a NRI sell immovable property other than agricultural land in India ?” tab_id=”1594970717113-9c455f44-e98c”][vc_column_text]Yes, he may sell to a person resident in India/ NRI/ OCI.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can NRI be eligible to sell an agricultural land, in case the same was purchased by him while he was a Resident ?” tab_id=”1594970736768-0524a908-d963″][vc_column_text]Yes, he is eligible to sell an agricultural land to a person resident in India, even if the same was purchased by him while he was a Resident.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can a foreign national of non-Indian origin and resident outside India purchase immovable property in India ?” tab_id=”1594970757973-30b69fb9-afef”][vc_column_text]No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he may take immovable property on lease provided the period of lease does not exceed 5 years. In such cases, there is no requirement of taking any permission of or reporting to RBI. However, he is permitted to acquire one immovable property (other than agricultural land / plantation property / farm house) jointly with his spouse, provided the spouse is NRI or OCI and otherwise not prohibited from such acquisition and their marriage should have been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition of such property.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can a foreign national being employed in India, and thus being a person resident in India as per FEMA acquire an immovable property in India ?” tab_id=”1594970781080-b14bfbed-df2d”][vc_column_text]Yes, a foreign national who is a ‘person resident in India’ as per FEMA can acquire immovable property in India. However, Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong or Democratic People’s Republic of Korea (DPRK) would require prior approval of RBI.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can a NRI/ OCI/ Foreign national acquire immovable property in India by way of gift ?” tab_id=”1594970802727-a452568e-870b”][vc_column_text]Yes, NRIs/OCI can freely acquire immovable property (residential and commercial properties only) by way of gift either from a person resident in India, a NRI or OCI who is a relative defined in section 2(77) of the Companies Act,2013. However they are not permitted to acquire an agricultural land / plantation property / farm house in India by way of gift.
A foreign national of Non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can a NRI/ OCI gift his immovable properties ?” tab_id=”1594970827601-63bea0ec-cc8b”][vc_column_text]Residential /Commercial property: NRI / OCI may gift residential/ commercial property to a person resident in India, NRI or OCI who is a relative as defined in section 2(77) of the Companies Act, 2013.
Foreign national of non-Indian origin requires prior approval of RBI for gifting the residential / commercial property.
Agricultural land / a plantation property / a farm house: NRI / OCI can gift agricultural land / a plantation property / a farm house only to a person resident in India who is a citizen of India. A foreign national would require prior approval of RBI[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can NRI / OCI avail housing loan from an AD / registered non-banking financial company (NBFC) or financial institutions in India ?” tab_id=”1594970854980-b999790f-fe55″][vc_column_text]Yes, NRI/ OCI are permitted to obtain housing loans from AD, registered NBFC and other financial institutions as specified from RBI from time to time.
The loan shall be subject to the policy laid down by the Board of Directors of the AD and in compliance with prudential guidelines of RBI or terms and conditions as prescribed by RBI from time to time. The borrowed funds are not to be used for restricted end uses such as under:

  • In the business of chit fund or Nidhi Company;
  • Investment in capital market including margin trading and derivatives;
  • Agricultural or plantation activities;
  • Real estate activity or construction of farm houses; and
  • Trading in Transferrable Development Rights (TDR), where TDR shall have the meaning as assigned to it in the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2015.

[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can NRI avail of housing loan in rupees from his employer in India ?” tab_id=”1594971050125-aa409579-906d”][vc_column_text]Yes, subject to certain terms and conditions.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can residential / commercial property be mortgaged ?” tab_id=”1594971080600-3012d791-b4fe”][vc_column_text]

  • NRI/ PIO can mortgage to:
  1. AD Bank/ registered NBFC/housing finance institution in India- without RBI approval
  2. A party abroad- with RBI prior approval
  • A company outside India in which NRI/OCI is a director, can avail loan from the overseas lender of the Indian AD Bank against mortgage of an immovable property in India owned by such NRI/OCI, subject to certain terms and conditions.
  • A foreign national of non-Indian origin can mortgage only with prior approval of RBI
  • A foreign company which has established a Branch Office or other place of business in accordance with FERA/ FEMA regulations has general permission to mortgage the property with an AD Bank in India.

[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”NRI has acquired residential/ commercial property in India by way of inward remittances through normal banking channel or by debit to NRE /FCNR/ NRO a/c. Can he repatriate the sale proceeds of the same? If yes, is there any limit on the quantum ?” tab_id=”1594971168342-f312b5f1-268c”][vc_column_text]Yes, he may repatriate sale proceeds of immovable property subject to below conditions:
• Amount to be freely repatriated should not exceed amount paid for acquisition of residential/ commercial property in foreign exchange, received through normal banking channel or by debit to FCNR a/c or NRE a/c.
• In case of residential property, repatriation of sale proceeds is restricted to 2 such properties
• Sale proceeds of residential/ commercial property in India acquired by way of debit to NRO a/c cannot be freely repatriated and sale proceeds should be credited to NRO a/c only. However, such sale proceeds can be transferred from NRO a/c to NRE a/c/ overseas a/c subject to the limit of USD 1 million per FY[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Is there requirement of minimum holding period for sale of residential/ commercial property purchased out of inward remittance/ debit to NRE/ FCNR / NRO A/c ?” tab_id=”1594971221111-04e32630-09db”][vc_column_text]There is no requirement of minimum holding period applicable for sale of such property.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”NRI acquired an immovable property by way of gift. Can the funds received on sale of said immovable property be repatriated abroad ?” tab_id=”1594971244065-d59c5354-e51c”][vc_column_text]The sale proceeds of immovable property acquired by way of gift should be credited to NRO a/c only. From balance in NRO a/c, NRI/OCI may remit up to USD 1 million, per FY, subject to satisfaction of AD Bank and payment of applicable taxes.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”If immovable property was received as inheritance by NRI/OCI from a person resident in India, can he repatriate the sale proceeds ?” tab_id=”1594971267223-bbaf7fd2-3071″][vc_column_text]Yes, general permission is available to repatriate such sale proceeds. The amount of repatriation is restricted to USD 1 million per FY, subject to satisfaction of AD Bank and payment of applicable taxes.
In case of a foreign national, sale proceeds can be repatriated in similar manner if the property is inherited from a person resident in India.
Repatriation of sale proceeds in foreign exchange to Nepal and Bhutan is not permissible.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”If the immovable property was received as inheritance by foreign national from a person resident outside India, can he repatriate the sale proceeds ?” tab_id=”1594971290388-ed485c20-a4d1″][vc_column_text]Yes, but only with prior RBI approval.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can NRI / OCI rent residential/ commercial property purchased from foreign exchange/ rupee funds ?” tab_id=”1594971311225-a20e01b0-9c04″][vc_column_text]Yes, NRI/OCI can rent the property without RBI approval.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can foreign nationals of non-Indian origin resident in India or outside India who had earlier acquired immovable property under FERA with specific approval of RBI continue to hold the same ?” tab_id=”1594971334154-b0f1896c-1a76″][vc_column_text]Yes, they may continue to hold the immovable property under holding license obtained from RBI.[/vc_column_text][/vc_tta_section][vc_tta_section i_icon_fontawesome=”fa fa-arrow-circle-right” add_icon=”true” title=”Can foreign nationals of non-Indian origin who had earlier acquired immovable property in India in accordance with foreign exchange laws at the time of acquisition or with general or specific permission of the RBI sell such property when he leaves India without prior RBI permission ?” tab_id=”1594971357562-e9d007a8-838a”][vc_column_text]Yes, such foreign national on becoming person resident outside India can transfer such property to a person resident in India provided transaction takes place through banking channel in India and the resident is not otherwise prohibited from such acquisition.
To transfer such property to a Non-resident, foreign national would require prior RBI permission.[/vc_column_text][/vc_tta_section][/vc_tta_accordion][/vc_column][/vc_row]