Q.8 Can an office of a foreign company purchase immovable property in India?

A.8. A foreign company which has established a Branch Office or other place of business in India, in accordance with FERA / FEMA regulations, can  acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through proper banking channel. A declaration in form IPI should be filed with Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for other borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of Reserve Bank. Further, acquisition of immovable property by entities who had set up Branch Offices in India and incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank to acquire such immovable property. However, if the foreign company has  established a Liaison Office, it can not acquire immovable property . In such cases, Liaison Offices, can take property by way of lease not exceeding 5 years.

Q.9 Whether immovable property in India can be acquired by way of gift ?

A.9. (a)  Yes, NRIs and  PIOs can freely acquire immovable property by way of gift either  from

i) a person resident in India or
ii) an NRI  or
iii) a PIO.

However, the property can only be commercial or residential. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift.
(b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable  property in India through gift.

Q.10.  Whether a non-resident can inherit immovable property in India?

A.10. Yes, a person resident outside India i.e.

i) an NRI
ii) a PIO and
iii) a foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India. However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek specific approval of Reserve Bank.

Q.11.  From whom can  the non-resident  inherit immovable property?

A.11. 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 that point of time.

Transfer of immovable property

in India

(i) Transfer by Sale

Q.12 Can an NRI/ PIO/foreign national sell his residential / commercial property?

A.12. (a)  NRI can sell property in India to-

i)   a person resident in India or
ii)  an NRI or
iii) a PIO.

Q.13. Can an agricultural land / plantation property / farm house in India owned / held by a non-resident  be sold?

A.13. (a) NRI / PIO may sell agricultural land /plantation property/farm house to a person resident in India who is a citizen of India.
(b)  Foreign national of non-Indian origin resident outside India would need prior approval of Reserve Bank to sell agricultural land/plantation property/ farm house in India

Transfer of immovable property

in India

(ii) Transfer by Gift

Q.14. Can a non-resident gift his residential / commercial property?

A.14. Yes.
(a) NRI / PIO may gift residential / commercial property to -

(i) person resident in India or
(ii) an NRI or
(iii) PIO.
(b)  foreign national of non-Indian origin needs prior approval of Reserve Bank.

Transfer of immovable property

in India

(iii) Transfer through Mortgage

Q.16. Can residential / commercial property be mortgaged?

A.16.   i) NRI / PIO can mortgage to:

(a) an authorised dealer / housing finance institution in India –
without the approval of Reserve Bank.
(b) a party abroad - with prior approval of Reserve Bank.

ii) a foreign national of non-Indian origin can mortgage only with prior approval of Reserve Bank
iii) a foreign company which has established a Branch Office or other place of business in accordance with FERA/FEMA regulations has general permission to mortgage the property with an authorized dealer in India.

 Mode

of

payment for purchase

Q.17. How can an NRI / PIO make payment for purchase of residential / commercial property in India ?

A.17. Payment can be made by NRI / PIO out of
(a) funds remitted to India through normal banking channel or
(b) funds held in NRE / FCNR (B) / NRO account  maintained in India
No payment can be made either by traveller’s cheque or by foreign currency notes.
No payment can be made outside India.

Q.18 What shall be the option if there is refund of application money / payment made by the building agencies / seller because of non-allotment of flat / plot / cancellation of bookings / contracts ?

A.18. The amount of refund, together with interest (net of income tax) can be credited to NRE account. This is subject to condition that the original payment was made by way of inward remittance or by debit to NRE / FCNR (B) account.