This is the second part
of the article. The first part appeared in these columns on March 12, 2004.
PIO
(Person of Indian Origin) is also permitted to gift residential or commercial
property in India to person
resident in India
and a NRI or PIO.
Repatriation
of proceeds
Prior
permission of the RBI is required to repatriate the sale proceeds of immovableproperty outside India ,
by a NRI, or his successor. The authorized dealer is permitted to allow
repatriation of the sale proceeds of immovable property in India/outside India
except agricultural, plantation property or farmhouse outside India to a Non
Resident Indian (NRI) or to a PIO on following conditions:-
The
acquisition of the immovable property by the seller was in compliance with the
law and regulations in force.
The
property was sold after three years from the date of acquisition or from the
date of payment of final installment of sale price, whichever is later.
The
amount to be repatriated does not exceed the amount paid for acquisition in
foreign exchange received through normal banking channels or funds held in
foreign currency Non-Resident account or equivalent to foreign currency on the
date of payment if acquired through Non-resident external account.
If
the sale proceeds are of residential property, repatriation should not be more
than two properties.
There
is a complete prohibition against acquisition or transfer of immovable property
in India by the citizens of Pakistan , Bangladesh ,
Sri Lanka , Afghanistan , China ,
Nepal and Bhutan without
the prior permission of the Reserve Bank of India (RBI).
However,
they may acquire or transfer immovable property on lease, which should not be
beyond five years.
RBI
has permitted the repatriation of Sale Proceeds of immovable property up to
$1,00,000/- per year, provided the property is held by NRIs/PIO for a period of
not less than 10 years.
Acquisition
of Immovable Property
Reserve
Bank of India has accorded
permission to a NRI to acquire immovable property in India ,
for the purpose of carrying on business or other activities in India on the
following conditions:
The
purpose is to open a branch or other place of business.
The
business or activity is established in India as per the Foreign Exchange
Management (establishment in India of Branch or Offices or other place of
business) Regulation, 2000.
The
office is not a Liaison Office.
There
is a need to acquire immovable property to carry on the activity.
There
is strict compliance of all applicable laws, rules, regulations, and direction
in force.
The
person files Form No.IPI within ninety days from the date of such acquisition.
The
immovable property acquired is permitted to be transferred by way of mortgage
to an authorized dealer as security for any amount borrowed.
Housing
loan in rupees to a Non-Resident
Non
Resident Indian or a PIO (a person residing out of India and holding an Indian
Passport, whose father or grand father was an Indian citizen by virtue of
Constitution of India, is eligible for a housing loan to acquire residential
accommodation in India subject to the following conditions:
Loans to be availed
from an authorized dealer or a Housing Finance Institution approved by the
National Housing Bank.
Amount
of loan, margin to be met and repayment period will be as applicable to a
person residing in India .
The
loan proceeds are not allowed to be credited to Non-Residential External (NRE)
/ Foreign Currency Non-Resident (FCNR)/Non-Resident-non-repatriable account of
the borrowed.
Loan
should be fully secured. The acquired property will have to be given as
security by equitable mortgage. If
needed, other assets of the borrower will have to be given by way of lien.
The
repayment of loan, interest an other charges shall be by the borrower from out
of remittances outside India
through normal banking channels.
This
may be from the funds of the borrower in his Non-Resident External
(NRE)/foreign currency Non-Resident (FCNR) Non-Resident Non-repatriable
(NRNR)/Non-Resident-ordinary (NRO)/Non-Residential Special Rupee (NRSR) account
in India .
The rental income of the property acquired may also be used for repayment.
The
interest charged to the loan shall be in conformity with the RBI, National
Housing Bank directives.
Invest
out of Local Funds
Reserve Bank of India grants permission to foreign
citizens of Indian origin to invest in local funds in real estate on submission
of necessary applications provided such investments are for bonafide use of
residence.
If
the property is not immediately required for residential purpose, the same may
be leased out and the lease amount is repatriable.
Foreign
Citizens residing in India
are allowed to purchase one property for their bonafide residential purpose out
of their Rupee funds.
Investment by non
Indian Origin Foreign Citizen
Foreign national of Non
Indian Origin any purchase of immovable properties in India for their residential purpose, out of
fresh remittance of foreign exchange through normal banking channels, with
prior approval of Reserve Bank of India .
The income out of
investment cannot be repatriated. If any member of a Partnership Firm, Trust,
Association or Club is a foreign Citizen, prior permission of RBI is necessary
for purchase or sale.
Foreign Companies /
Banks
Any foreign Company
other than Banking Companies are permitted to acquire / hold immovable
properties if they are needed for their business. They have to declare such
acquisition to the RBI.
Foreign Companies who
have only liaison office in India
can also invest in acquisition out of fresh remittance.
Income out of
investments in Real Estate is more remunerative, safe, and appreciates in the
course of time.
Before investing your hard earned money in any immovableproperty, do scrutinize the title deeds through an eminent Lawyer and select
the promoters having good track record to safeguard your investment.
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