Q. Who is an ’Non-Resident Indian (NRI)?
As per Para 2(vi) of F.E.M. (Deposit) Regulation, 2000. ’Non-Resident Indian’ (NRI) means a person resident outside India who is a citizen of India or is a person of Indian origin .
Q. Who is a Person of Indian Origin (PIO)?
As per Para 2(c) of F.E.M. (Acquisition and transfer of immovable property in India) Regulations 2000 :-
A person of Indian origin means an individual (not being a citizen of Pakistan or Bangladesh 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 whose grandfather was a citizen of India by virtue of Constitution of India or the Citizenship Act, 1955 (57 of 1955);
Q. Who is a Person Resident in India (PRI)?
Under Section 2(v) of the Foreign Exchange Management Act 1999:
A person resident in India means:
i. a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include—
A. a person who has gone out of India or who stays outside India, in either case—
a. for or on taking up employment outside India, or
b. for carrying on outside India a business or vocation outside India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay outside
India for uncertain period.
B. a person who has come to or stays in India, in either case, otherwise than—
a. for or on taking up employment in India, or
b. for carrying on outside India a business or vocation in India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay in India for
an uncertain period.
ii. any person or body corporate registered or incorporated in India, or
iii. an office, branch or agency outside India owned or controlled by a person resident outside India,
iv. an office, branch or agency outside India owned or controlled by a person resident in India;
Q. Who is a Person Resident Outside India (PRO)?
Under Section 2(w) of FEMA 1999
‘Person Resident Outside India’ means a person who is not resident in India.
Q. Is NRI/PIO who has purchased residential/commercial property under general
permission required to file any documents with Reserve Bank of India?
No, NRI/PIO who has purchased residential/commercial property under general permission is not required to file any documents with the Reserve Bank.
Q. Is there any restriction on number of residential/commercial property that
NRI/PIO can purchase under the general permission available?
There is no restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available.
Q. What does OCB mean?
As per Para 2(xi) of F.E.M. (Deposit) Regulation, 2000. ‘Overseas Corporate Body (OCB)’ means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least sixty percent by Non-resident Indians and includes overseas trust in which not less than sixty percent beneficial interest is held by Non-resident Indians directly or indirectly but irrevocably.
Q. What types of bank accounts can be opened by NRIs/OCBs in India?
NRIs/OCBs can open the following types of accounts with authorized dealers, and with banks including co-operative banks authorized by R.B.I. to maintain such accounts.
Rupee Accounts:-
1. Non-Resident (Ordinary) Account - NRO A/c.
2. Non-Resident (External) Rupee Account - NRE A/c. (Proceeds of remittances to India in any
permitted country)
3. Non-Resident (Foreign Currency) Account - FCNR A/c.
(in Pound Sterling, US Dollar, Deutsche Mark, Japanese Yen and Euro and such other currencies as may be designated by Reserve Bank from time to time) vide RBI Notification No. GSR663 (E) (No. FEMA 140/2005-RBI dated 31.10.2005
Q. Are NRIs permitted to send remittances outside India out of the sale of immovable
property in India that is inherited by them?
Yes, general permission is available to the NRIs/PIO to repatriate the sale proceeds of the immovable property inherited from a person resident in India. NRIs/PIO may repatriate an amount not exceeding USD one million, per financial year, on production of documentary evidence in support of acquisition/inheritance of assets, an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No. 10/2002 dated October 9, 2002 [cf.A.P. (DIR Series) Circular No. 56 dated November 26, 2002]
Q. From whom can the non-resident inherit immovable property?
A person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) can inherit immovable property from
(a) a person resident in India.
(b) a person resident outside India
However, the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange regulations applicable at the point of time.
Regulations/Directions issued by Reserve Bank of India
Q. Where can one find regulations/directions issued by Reserve Bank for acquisition
and transfer of immovable property in India by a person resident outside India?
The relevant regulations covering the transactions in immovable property have been notified vide RBI Notification No. FEMA 21/2000-RB dated May 3, 2000 and this basid notification has been subsequently amended by the notifications detailed below:
1. Notification No. FEMA 64/2002-RB dated June 29, 2002.
2. Notification No. FEMA 65/2002-RB dated June 29, 2002.
3. Notification No. FEMA 93/2003-RB dated June 9, 2003; and
4. Notification No. FEMA 146/2006-RB dated February 10, 2006 available with A.P. (DIR Series) Circular No. 5 dated 16-8-2006 available on RBI website: www.fema.rbi.org.in
Q. Can a foreign national of non-Indian origin acquire residential property on a lease
in India?
Yes. A Foreign National of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission of Reserve Bank of India.
Q. Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of
non-Indian origin) acquire agricultural land/plantation property/farm house in
India by way of purchase?
No. A person resident outside India cannot acquire agricultural land/plantation property/farm house in India, such proposals will require specific approval of Reserve Bank and the proposals are considered in constitution with the Government of India.
Q. Under general permission available to whom can a PIO transfer his
residential/commercial property by way of sale?
PIO can transfer by way of sale residential/commercial property in India only to:
i) a person resident in India.
ii) an NRI
iii) a PIO- with prior approval of RBI
.
Q. Who can purchase immovable property in India?
Under the general permission available, the following categories can freely purchase immovable property in India:
(i) Non-Resident Indian (NRI)- that is a citizen of India resident outside India
(ii) Person of Indian Origin (PIO)
The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land/plantation property/farm house in India.
Q. Can a foreign national of non-Indian origin whether resident in India or outside
India transfer by way of sale residential/property in India acquired with the
specific permission of Reserve Bank to a person resident in India or outside India?
A foreign national of non-Indian origin can sell property in India with prior approval of Reserve Bank to:
(i) a person resident in India
(ii) an NRI
(iii) a PIO.
Q. Under general permission available to whom can NRI/PIO transfer by way of sale
his agricultural land/plantation property/farm house in India?
Under the general permission available NRI/PIO may transfer by way of sale his agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.
Q. Can a foreign national of non-Indian origin resident outside India transfer by way
of sale agricultural land/plantation property/farm house acquired by him in India?
A foreign national of non-Indian origin resident outside India would need to seek prior approval of Reserve Bank for transfer, by way of sale, agricultural land/plantation property/farm house in India.
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