NRI Rules for Investment in Immovable Property FAQs

NRI Rules for Investment in Immovable Property

FOREIGN EXCHANGE DEPARTMENT
FOREIGN INVESTMENT DIVISION

Frequently Asked Questions (FAQs)

Q.1 Where can one find regulations / directions issued by Reserve Bank for
acquisition and transfer of immovable property in India by a person residen
t outside India ?
A.1 Regulations regarding acquisition and transfer of immovable property
in India by a person resident outside India have been notified vide RBI
Notification No.FEMA 21/2000-RB dated May 3, 2000 as amended by Notific
ation No.FEMA 64/2002-RB dated June 29, 2002, Notification No.FEMA 65/20
02-RB dated June 29, 2002 and Notification No.FEMA 93/2003-RB dated June
6, 2003 and relevant directions issued in the form of A.P. (DIR Series)
Circulars. These are available on RBI website.

Q.2 Under the extant foreign exchange regulations to whom is general permi
ssion available for purchase of immovable property in India ?
A.2 General permission is available to purchase only a residential / commerci
al property in India to a person resident outside India who is a citizen of I
ndia (NRI) or who is a person of Indian origin (PIO).

Q.3 Who is a Person of Indian Origin (PIO)
A.3 For the purpose of acquisition and transfer of immovable property in Ind
ia, a PIO means an individual (not being a citizen of Pakistan or Bangalades
h or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (i)
at any time, held Indian passport, or (ii) who or either of whose father or
grandfather was a citizen of India by virtue of the Constitution of India or
the Citizenship Act, 1955 (57 of 1955).

Q.4 Is NRI / PIO who has purchased residential / commercial property unde
r general permission required to file any documents with Reserve Bank of
India?
A.4 NRI / PIO who has purchased residential / commercial property under ge
neral permission is not required to file any documents with the Reserve Ba
nk.

Q.5 Is there any restriction on the number of residential / commercial prope
rties that NRI / PIO can purchase under the general permission available ?
A.5 There is no restriction on the number of residential / commercial proper
ties that NRI / PIO can purchase under the general permission available.

Q.6 Can a name of a foreign national of non-Indian origin be added as a sec
ond holder to a residential / commercial property purchased by NRI / PIO ?
A.6 No.

Q.7 Can a foreign national of non-Indian origin resident outside India acqu
ire any immovable property in India by way of purchase ?
A.7 No. Under section 2(ze) of the Foreign Exchange Management Act, 1999 '
transfer' includes among others, 'purchase'. Therefore, a foreign national
of non-Indian origin resident outside India cannot acquire any immovable
property in India by way of purchase.

Q.8 Can a foreign national of non-Indian origin acquire residential property
on a lease in India ?
A.8 Yes. A Foreign National of non-Indian origin including a citizen of Pa
kistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal
or Bhutan may acquire only residential accommodation on lease, not exceed
ing five years for which he / she does not require prior permission of Res
erve Bank of India.

Q.9 Can a person resident outside India (i.e,. a NRI or a PIO or a foreign na
tional of non-Indian origin) acquire agricultural land / plantation property
/ farm house in India by way of purchase ?
A.9 No. A person resident outside India cannot acquire by way of purchase ag
ricultural land / plantation property / farm house in India.

Q.10 Can NRI / PIO acquire residential / commercial property by way of gift
under the general permission available ?
A.10 Yes. Under the general permission available NRI / PIO may acquire res
idential / commercial property by way of gift from a person resident in In
dia or a NRI or a PIO.