NRI's
Do NRI require permission of Reserve Bank to acquire immovable property in India?
No. NRI's do not require any permission to acquire any immovable property in India other than agricultural / plantation property or a farm house.
Do NRI's require permission of Reserve Bank to transfer immovable property in India?
No. NRI do not require any permission to transfer any immovable property in India. Permission is required only in the case of transferring of agricultural or plantation property or farm house to another citizen of India NRI or PIO.
Do PIO require permission of Reserve Bank to purchase immovable property in India for their residential use?
Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property other than agricultural land/farm house/plantation property, in India. They are, therefore, not required to obtain separate permission of Reserve Bank or file any declaration.
Can such property be sold without the permission of Reserve Bank?
Yes. Reserve Bank has granted general permission for sale of such property. However, where another foreign citizen of Indian origin purchases the property, funds towards the purchase consideration should either be remitted to India or paid out of balances in non-resident accounts maintained with banks in India.
Can NRI/PIO rent out the properties (residential/commercial) if not required for immediate use?
Yes. 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 is eligible for repatriation
Can NRI obtain loans for acquisition of a house/flat for residential purpose or office/showroom for commercial purpose from financial institutions providing housing finance?
Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., to grant housing loans to NRI for acquisition of a house/flat for self occupation subject to certain conditions. The purpose of loan margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the investor's NRE / FCNR / NRO Accounts.
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
Tax implications for NRIs upon sale of real estate property.
Non-Resident Indians (NRI) constitutes a significant portion of buyer percentage when it comes to real estate transactions in India. Irrespective of constituting a considerable portion, they still face a lot of hassles in the process of taxation when buying or selling properties.
“Sale of the flat will give rise to long-term capital gains which are taxed at 20 per cent, plus applicable surcharge and education cess. There are few important points that one should take a note of by your client.”
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