Q : NRI FAQ's Who is a non-resident Indian (NRI)?
In Indian Citizen who stays abroad for employment / carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non resident. (Persons posted in U.N. organizations and official deputed abroad by Central / State governments and Public Sector undertaking on temporary assignments are also treated as Non- resident). Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian Citizens (NRIs) for the purpose of certain facilities. For the purpose of availing of the facilities of opening and maintenance of bank accounts and investments in shares / securities in India. A foreign citizen other than citizen of Pakistan or Bangladesh is deemed to be of Indian origin, if He, at any time, held an Indian passport, or He or either of his parents or any of his grant parents was citizen of India by virtue of the constitution of India Citizenship Act, 1955 (57 of 1955). Note- Spouse not being a citizen of Pakistan or Bangladesh) of an India Citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purpose the bank accounts are opened or investments in share/ securities in India are made by such persons only jointly with their NRI spouses. For Investments in immovable properties a foreign citizen other than citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal is deemed to be of Indian origin if he held an Indian passport at any time or he or his father or his parental grand-father was a citizen of India by virtue of the constitution of India or the Citizenship Act, 1955.
Q : Can such property be sold without the permission of Reserve Bank?
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 toward the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.
Q : Can sale proceeds of such property if and when sold be remitted out of India?
In respect of residential properties purchased on or after 26th May, 1993 Reserve Bank considers applications for repatriation of sale proceed up to the original investment 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 of May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.
Q : Can foreign citizens of Indian origin acquire commercial properties in India?
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.
Q : Can sale proceeds of such property be remitted out of India?
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 installment 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.
Q : Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?
Reserve Bank has granted general permission to certain financial institutions provided hosing finance e.g. HDFC, LIC Housing Finance Ltd. etc and authorised dealers to grant housing loans to non-resident Indian nationals for acquisition of the house/flat for self occupation subject to certain condition. The purpose of the loan, margin money and quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within the period not exceeding 15 years out of inward remittance or out of funds held in the investors NRE/NRO/FCNR accounts.