Who can purchase property in India?
According to Reserve Bank of India (RBI), Indian property can be purchased by Non-Resident Indians (NRIs) and People of Indian Origin (PIOs).
- NRIs are Indian citizens residing outside of India.
- PIOs are:
- Citizens of any country, other than Pakistan, Bangladesh or Sri Lanka, who have held an Indian passport
- Those whose parents/grandparents are Indian citizens by virtue of the Constitution of India or the Citizenship Act 1955 (57 of 1955)
- Have a spouse of Indian origin
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Do NRIs and PIOs need permission from RBI before purchasing a property?
All Indian citizens (NRI and PIO) can purchase property in India irrespective of their residency status and without prior permission from RBI.
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Can foreign nationals of non-Indian origin purchase property in India?
No. A foreign national of non-Indian origin or resident outside of India cannot purchase property in India. They may lease residential accommodation without RBI approval provided the lease period does not exceed five years.
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Can foreign nationals of non-Indian origin purchase property in India with a joint applicant of Indian origin?
Property in India cannot be jointly purchased with one eligible person and one non eligible person. NRIs or PIOs cannot purchase property jointly with a foreign national.
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Can a foreign national who is an Indian resident purchase property in India?
Yes, the person concerned would have to obtain approvals, and fulfill requirements prescribed by other authorities, such as the State Government. A foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank of India.
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How many residential / commercial properties can NRIs / PIOs purchase under the general permission?
There are no restrictions.
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Can property in India be acquired by way of gift?
Yes, NRIs and PIOs can freely acquire residential or commercial property (not agricultural land / farm houses) by way of gift from:
• Indian residents
• NRI
• PIO
Foreign nationals of non-Indian residence cannot acquire property in India as a gift.
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Can NRIs / PIOs sell their purchased property without RBIs permission?
Yes. The Reserve Bank of India has granted general permission for the sale of such property to:
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NRIs
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PIOs
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Indian residents
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Can sale proceeds of property be sent out of India?
Yes. Sale proceeds can be remitted / repatriated out of India if the property was acquired out of:
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A foreign exchange source i.e. transferred through normal banking channels / debit to NRE / FCNR(B) accounts, the amounts to be repatriated should not exceed the amount paid for the property. Repatriation of sale proceeds purchased out of foreign exchange is restricted to no more than two residential properties, in one year, with a facility of crediting the Capital gain to the NRO account.
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A Rupee source, not exceeding USD one million per financial year, subject to tax compliance, out of balance held in NRO account, may be remitted / repatriated.
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In the case of repatriation is there tax liability to the Indian Government?
Yes. During repatriation Capital Gain Tax is applied to the seller. Property held over 36 months comes under long term gains, any property held less than 36 months comes under short term gains.
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Can NRIs / PIOs rent out their property and can that rental be repatriated?
Yes. NRIs / PIOs can rent out their property without RBI approval, but rent repatriation can only be credited to the NRO / NRE account. It is advised that the purchaser should open a NRE / NRO account before purchasing property in India.
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What does NRE / NRO Accounts stand for?
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What is the difference between an NRE / NRO account?
Funds remitted from abroad or local funds, can be remitted abroad to the account holder, and credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts. Funds can be freely transferred from NRE account to NRO account. However, no funds can be transferred from NRO account to NRE account.
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Disclaimer – to the best of our knowledge the information above is correct at the time of publishing. However, as it has been sourced from numerous locations we cannot guarantee its accuracy. This information is subject to change without notice.