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Do non-resident Indian citizens require permission of
Reserve Bank to acquire residential/commercial properly in
India? |
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No. |
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Do foreign citizens of Indian origin require
permission of Reserve Bank to purchase immovable property in India
for their residential use? |
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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. |
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In what manner the purchase consideration for the
residential immovable property should be paid by foreign citizens of
Indian origin under the general permission?. |
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The purchase consideration should be met either out
of inward remittances in foreign exchange through normal banking
channels or out of funds from NTE/FCNR accounts maintained with
banks in India. |
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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. |
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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 alongwith a certified copy of the
document evidencing the transaction and bank certificate regarding
the consideration paid. |
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Can such property be sold without the permission of
Reserve Bank? |
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Yes. Reserve Bank has granted general permission for
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. |
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Can sale proceeds of such property if and when sold
be remitted out of India? |
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In respect of residential properties purchased on or
after 26th May,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 26th
May,1993, will have to be credited to the ordinary non-resident
rupee account of the owner of the property. |
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Are any conditions required to be fulfilled if
repatriation of sale proceeds is desired? |
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Applications for repatriation of sale proceeds are
considered provided the sale takes place after three years from the
date of final purchase deed or from the date of payment of final
instalment of consideration amount, whichever is later. |
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What is the procedure for seeking such repatriation?
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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. |
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Can foreign citizens of Indian origin acquire or
dispose of residential property by way of gift? |
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Yes. Reserve Bank has granted general permission to
foreign citizens of Indian origin to acquire or dispose of
properties up to two 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. |
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Can foreign citizens of Indian origin acquire
commercial properties in India? |
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Yes. Under the general permission granted by Reserve
Bank properties other than agricultural land/farm house/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 purchasers' 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. |
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Can they dispose of such properties? |
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Yes. |
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Can sale proceeds of such property be remitted out of
India? |
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Yes. Repatriation of original investment in respect
of properties purchased by foreign citizens of Indian origin on or
after 26th May 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 three years from the date of the
final purchase deed or from the date of payment of final instalment
of 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. |
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Can the properties (residential/commercial) be given
on rent if not required for immediate use? |
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Yes. Reserve Bank has granted general permission for
letting out of any immovable property in India. The rental income or
proceeds of any investment of such income has to be credited to NRO
account. |
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Can NRIs obtain loans for acquisition of a house/flat
for residential purpose from financial institutions providing
housing finance? |
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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
non-resident Indian nationals for acquisition of houses/flats for
self-occupation subject to certain conditions. |
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Can authorised dealer grant loans to NRIs for
acquisition of a flat/house for residential purposes? |
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Authorised dealers have been granted permission to
grant loans up to non-resident Indian nationals for acquisition of
house/flat for self-occupation on their return to India subject to
certain conditions. Repayment of the 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 investments' NRE/FCNR
accounts. |
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Can Indian companies grant loans to their NRI staff?
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Reserve Bank permits Indian firms/companies to grant
housing loans to their employees deputed abroad and holding Indian
passport subject to certain conditions.
Source: Reserve Bank of India
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What are the options available for obtaining guarantors while applying for a HDFC/LIC loan
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One will need a guarantor for a loan mainly for collateral security. The guarantor will have to demonstrate appropriate networth to cover for the loan. Usually one can have a guarantor in any city where the loan issuer has a branch. Talk to loan issuers they will work something out for NRIs and foreign banks. |
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While purchasing real estate most developers demand a Power of Attorney in their favor, is there a way to avoid it? |
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One can choose not to grant the Power of Attorney (POA) to the developers. However this will mandate the mailing of all documents to your foreign residence and associated time delays. A good compromise is to grant the POA to the builder only for specific necessary items.
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