Q.9. Can an NRI/ PIO/foreign national sell his residential / commercial property?

A.9. (a) NRI can sell property in India to-
i. a person resident in India or
ii. an NRI or
iii. a PIO.

(b) PIO can sell property in India to
i. a person resident in India
ii. an NRI or
iii. a PIO – with the prior approval of Reserve Bank

(c) Foreign national of Non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan can sell property in India with prior approval of Reserve Bank to
i. a person resident in India
ii. an NRI
iii. a PIO
 

Q.10. Can a Non-resident gift his residential / commercial property?

A.10. Yes. NRI / PIO may gift residential / commercial property to -
i. Person resident in India or
ii. an NRI or
iii. PIO.

(b) Foreign national of Non-Indian origin needs prior approval of Reserve Bank.
 

Q.11. Can residential / commercial property be mortgaged?

A.11. i) NRI / PIO can mortgage to:
(a) an authorized dealer / housing finance institution in India – without the approval of Reserve Bank.

(b) a party abroad - with prior approval of Reserve Bank.
ii) a foreign national of Non-Indian origin can mortgage only with prior approval of Reserve Bank
iii) 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 authorized dealer in India.
 

Q.12. How can an NRI / PIO make payment for purchase of residential / commercial property in India?

A.12. Payment can be made by NRI / PIO out of
(a) funds remitted to India through normal banking channel or
(b) funds held in NRE / FCNR (B) / NRO account maintained in India

No payment can be made either by traveler's cheque or by foreign currency notes.
No payment can be made outside India.
 

Q.13. Can NRI / PIO, avail of housing loan in rupees from an authorized dealer or housing finance institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation ? How can such loan be repaid?

A.13. Yes, NRI/PIO can avail of housing loan in rupees from an Authorized Dealer or housing finance institution subject to certain terms and conditions. Such a loan can be repaid
a. by way of inward remittance through normal banking channel or
b. by debit to his NRE / FCNR (B) / NRO account or
c. out of rental income from such property.
d. by the borrower's close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower's loan account.
 

Q.14. Can NRI / PIO repatriate the sale proceeds of immovable property? If so, what are the terms?

A.14. NRI / PIO may repatriate the sale proceeds of immovable property in India

(a) If the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account

The amount to be repatriated should not exceed the amount paid for the property:
1. in foreign exchange received through normal banking channel or
2. by debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.

Repatriation of sale proceeds of residential property purchased by NRI / PIO out of foreign exchange is restricted to not more than two such properties.

Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to USD one million, per financial year, as discussed below.

(b) If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
 

Q.15. Can an NRI/PIO repatriate the proceeds in case the sale proceed was deposited in NRO account?

A.15. From the NRO account, NRI/PIO may repatriate up to USD one million per financial year (April-March), which would also include the sale proceeds of immovable property.
 

A.16. Yes, provided the loan has been subsequently repaid by remitting funds from abroad or by debit to NRE/FCNR (B) accounts.
 

A.17. Yes.
 

A.18. Yes, sale proceeds of not more than two residential properties can be repatriated.
 

A.19. The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorized Dealer and payment of applicable taxes.

A.20. Yes, general permission is available to the NRIs/PIO to repatriate the sale proceeds of the immovable property inherited from a person resident in India. NRIs/PIO may repatriate an amount not exceeding USD one million, per financial year, on production of documentary evidence in support of acquisition / inheritance of assets, an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002

In case of a foreign national, sale proceeds can also be repatriated even if the property is inherited from a person resident outside India. But this is allowed only with prior approval of Reserve Bank. The foreign national has to approach Reserve Bank with documentary evidence in support of inheritance of the immovable property and the undertaking and the C.A. Certificate as mentioned above.

The general permission for repatriation of sale proceeds of immovable property is not available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan and Iran and he has to seek specific approval of Reserve Bank.

As FEMA specifically permits transactions only in Indian Rupees with citizens of Nepal and Bhutan, the question of repatriation of the sale proceeds in foreign exchange to Nepal and Bhutan would not arise.
 

Q.21. Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds?

A.21. Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. Rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorized Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs / PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.
 

Q.22. In which account can the sale proceeds of such immovable property be cr edited?

A.22. The sale proceeds may be credited to NRO account.
 

A.23. Reserve Bank does not determine the residential status. Under FEMA, residential status is determined by operation of law. The onus is on an individual to prove his / her residential status, if questioned by any authority.