Q: Who is a Non-Resident Indian (NRI)?
A: A NRI is a Person Resident Outside India who is a citizen of India or a Person of Indian origin.
A Person resident outside India is a person who has gone out of India or who stays outside India, in either case
 For or on taking up employment outside India, or
For carrying on outside India a business or vocation, or
For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period
Q: Who is a Person of Indian Origin?
A: A person of Indian origin is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who:
At any time, held Indian passport;
Who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)."
Q: Do non-resident Indian citizen require permission of Reserve Bank to acquire residential/ commercial property in India?
A: No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse.
Q: Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use? If yes, what are the formalities required to be completed by them?
A: Yes, However, Reserve Bank of India has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to acquire immovable property in India for their bonafide residential purpose. They are, therefore, not required to obtain separate permission of The Reserve Bank of India. They are required to file a declaration in form IPI 7 with Central Office of Reserve Bank at Bangalore within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
Hence a person of Indian origin resident outside India does not require any permission to acquire any immovable property other than agricultural land/farm house/plantation property in India by purchase, from out of funds:
Received in India by way of inward remittance through banking channel from any place outside India
OR
Held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act.
Q: In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?
A: The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/ FCNR accounts maintained with bank in India.
This FAQ applies to: Buying, Estate Agents, Corporate Investors, Legal, NRI and Selling & Renting.
Q: Where can permission be taken for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals of Indian origin?
A: All requests for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001.
Q: Can foreign citizens of Indian origin acquire commercial properties in India?
A: 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 property sold by NRIs be remitted out of India?
A: 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.
Hence, Repatriation outside India, including credit to RFC, NRE or FCNR account, of sale proceeds of any immovable property situated in India, requires prior permission of the Reserve Bank except in circumstances stated in paragraphs below:
(A) In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a person resident outside India, who is a citizen of India, or a person of Indian origin, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied :-
The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules /Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act,1999;
The amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency
non- resident account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property;
And in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
(B) Authorized Dealers have been permitted to allow the facility of repatriation of funds by NRIs / PIOs in their Non-Resident Ordinary Rupee (NRO) account up to US$ 100,000/- per year representing sale proceeds of immovable property held by them for a period of not less than 10 years subject to payment of applicable taxes.
Q: What are the conditions required to be fulfilled if repatriation of sale proceeds is desired? What is the procedure for seeking such repatriation?
A: Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of The Reserve Bank at Bangalore within 90 days of the sale of the property.
Q: Can foreign citizens of Indian origin acquire commercial properties in India? Can they dispose of such properties?
A: Yes, under the general permission granted by The 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 purchaser's 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. Yes they can dispose of such properties
Q: Can sale proceeds of such property be remitted out of India?
A: Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26 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, which ever 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 foreign citizens of Indian origin acquire or dispose residential property by way of gift?
A: Yes, Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, provided gift tax has been paid.
Q: Can the properties (residential / commercial) owned by NRIs be given on rent if not required for immediate use?
A: Yes. The NRIs / PIOs can freely rent out their immovable properties in India without seeking any permission from the Reserve Bank of India. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation and hence the rental income being a current account transaction is freely repatriable outside India.
Q: Can immoveable property held in India, be transferred by way of gift to relatives/registered charitable trusts/organizations in India?
A: Yes, General permission has been granted by Reserve Bank to non-resident persons (foreign citizen) of Indian Origin to transfer, by way of gift, immoveable property held by them in India to relatives and charitable trusts / organizations subject to the condition that the provisions of all other laws, as applicable are complied with.
Q: Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?
A: The Reserve Bank has granted permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors' NRE / FCNR / NRO accounts.
Q: Can an authorized dealer grant a housing loan to non-residents of Indian nationality where he is a principal borrower with his resident close relative as a co-borrower / guarantor or where the immovable property is owned jointly by such NRI borrower with his resident close relative?
A: Yes, However in such cases the payment of margin money and repayment of loan installments should be made by the NRI borrower.
Q: What are the documents required for loan processing?
A: The following documents are required along with the application form: Photocopy of the labour contract duly countersigned by applicant’s employer (translated to English for non-English documents). Latest salary certificate (in English) specifying the following:
Name (as it appears in the passport).
Date of joining.
Passport Number.
Designation.
Perquisites and salary.
Photocopy of labor card / identity card.
Photocopy of valid resident Visa stamped on the Passport.
Photocopy of monthly statement of local Bank account.
Property related documents
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