Guidelines for property acquisition by Non Resident Indian (NRI)

Feb. 3, 2011 - PRLog -- Guidelines for property acquisition by an NRI are laid down by FEMA Regulations, notified vide RBI Notification No. FEMA 21/2000-RB. NRIs and PIOs can acquire immovable property in India in the following ways:  
1) By way of Purchase
An NRI/PIO can acquire a residential or commercial property by purchasing it under the general permission granted by the RBI. Payment for purchasing the property should be made only out of funds remitted to India through normal banking channels or funds held in NRE/ FCNR/NRO accounts maintained in India. No payment can be made outside India.
A declaration is required to be submitted to Reserve Bank of India (Central Office) about the real estate acquisition of property by an NRI in form IPI 7 within a period of 90 days from the acquisition/final payment of purchase consideration, along with a certified copy of the document as evidence of the transaction and Bank certificate stating the amount paid.
2) By way of Gift
An NRI/PIO can acquire immovable property (only residential/commercial property) by way of gift from a resident of India, an NRI or a PIO. Agricultural land/plantation property/farmhouse in India cannot be acquired by way of gift.
•   A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.
3) By way of Inheritance
NRIs/PIOs/ foreign nationals of non-Indian origin are eligible to hold immovable property acquired by way of inheritance from a resident Indian / NRI or PIO. However, they would need specific approval from the RBI to hold any immovable property in India if acquired from a person resident outside India.
It is mandatory that the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange regulations applicable at the time of acquisition.
•   Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan are required to seek specific approval of the Reserve Bank of India before being able to inherit any immovable property in India.
Documents Required for Acquisition of Property
1.   Title Deed
2.   Tax Receipt
3.   Bills
4.   Encumbrance Certificate
5.   Document showing measurement of Land
6.   Registration Papers
Key facts on acquisition of property by NRI by Purchase/Gift/Inheritance
1.   There is no lock-in period now for any acquisition of immovable property.
2.   All the sale proceeds of residential/commercial property received by way of gift by NRI should be credited to NRO accounts only.
3.   Sale proceeds of property inherited from a resident Indian not exceeding USD 1 million can be remitted abroad in one calendar year.
4.   Sale proceeds of property inherited from an NRI cannot be repatriated.
5.   Sale proceeds of residential/commercial property received by way of gift by NRI/PIO can only be credited to NRO account.
6.   NRIs can seek an agreement with their relatives in the form of Power of Attorney in their resident country. This way, in their absence their relatives can represent them during the proceedings.
For more details contact the Expert Real Estate / Property Attorneys & Lawyers at :
Global Lawyers
Call: 0091 9810153965
Visit : http://www.globallawyers.in

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