Who is a NRI ?
A NRI is a person resident outside India who is either a citizen of India or a person of Indian origin. A NRI is an Indian Citizen who has migrated to another Country. For all official purpose the Government of India considers Indian National away from India for more than 182 days, in a year.
Who is a PIO?
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:held an Indian Passport at any time, or who or whose father or paternal grand father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955.
What are the types of Property can a NRI/PIO purchase in India?
There are no restrictions on the numbers of Residential/Commercial Properties (other than agricultural land/farm house/plantation) that can be purchased.
Do NRI/PIO require permission of The Reserve Bank to acquire residential/ commercial property in India?
No. All Indian citizens are entitled to buy property in India, irrespective of their residential status.
How should the purchase of residential immovable property be paid for by NRI/ PIO under the general permission?
The purchase consideration should be met either out of inward remittance in foreign exchange through normal banking channels, or out of funds from NRE/FCNR(B)/NRO accounts maintained with banks in India.
Can the sale proceeds of such property (if and when sold) be remitted/repatriated out of India?
Yes the sale proceeds can be remitted/repatriated out of India.In the event property acquired out of foreign exchange source i.e. remittance through normal banking channels/ debit to NRE/ FCNR(B) accounts, the amounts to be repatriated should not exceed the amount paid for such property from such source. However, repatriation of sale proceeds purchased out of foreign exchange is restricted to not more that two residential properties, in a block of one year, with a facility of crediting the Capital gain to the NRO account. Again in the event the property was acquired out of Rupee source, an amount not exceeding USD one million, per financial year, subject to tax compliance, out of balance held in NRO account, may be remitted/repatriated.
Does a NRI/PIO, requires to have a company in India or abroad or both for purchasing of property?Can NRI/ PIO''s acquire or dispose residential property by way of gift?
Yes, NRIs and PIOs can freely acquire immovable property in India by way of gift either from
- person resident in India
However the property can only be commercial or residential.
Can NRI/PIO sell their purchased property without the permission of Reserve Bank?
Yes. Reserve Bank of India has granted general permission for sale of such property to the following categories:-
- To a NRI
- To a PIO (If the seller is a PIO, then a prior approval is required from RBI)
- To a person Resident of India.
In case of repatriation is there any tax liability to the Indian Government?
Yes, during repatriation Capital Gains (Long Term/Short Term) as applicable will be attracted.
Long Term Capital Gains: For properties held for 36 months or more are termed as Long Term Capital Assets, and currently attracts a rate of 22.6%(Fin. Year: 2007-08)
Short Term Capital Gains: For properties held for less than 36 months are termed asShort Term Capital Assets, and currently attracts a rate of 33.9%
Can rental Income be repatriated?
Repatriation of income derived out of letting of immovable property is permissible. NRI/PIO can rent out the property without approval of Reserve Bank. Rent received can be credited to NRO/NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, interest, dividend etc. of NRI/PIO who do not maintain an NRO account in based on an appropriate certification by Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/ provided for.
The purpose of this FAQ is to provide the visitors a general understanding on the various issues relating to House Property. The above FAQ been prepared on the basis of advice received and may vary from person to person, based on facts of such case. Reasonable efforts have been taken in collecting, preparing and providing quality information, but we do not warrant or guarantee the accuracy, completeness, adequacy or currency of the information. The contents of the FAQ are subject to changes / amendments made by the CBDT / Finance Ministry.