NRI Investment in Real
Estate in India - FAQs
If you have any
specific queries that are not answered on this page, please
Disclaimer: The purpose of this FAQ is to provide the visitors of this
site a general understanding on the various issues relating to NRI real estate
Investments within the Indian housing sector. The following FAQ been prepared on
the basis of advice received on planning for making an NRI investment 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 this FAQ page relating to NRI investments are
subject to changes / amendments made by the CBDT / Finance Ministry.
NRIs Can Cash Out of Indian Real Estate
Business Standard Reporter / Mumbai / New Delhi November 18, 2006
Non-resident Indians (NRIs) with wealth stuck in NRI real estate in India have
reason to rejoice. They can now not only cash out on the NRI property they hold
in India, but have also been provided an incentive to invest in NRI real estate
This has been made possible by the Reserve Bank of India allowing NRIs to remit
the proceeds from the sale of immovable NRI real estate. The RBI has lifted the
10-year lock-in as a step towards further liberalisation of the capital account.
"The key impact will be that it will provide an exit route to NRI investors, who
till now did not have the comfort level to invest in NRI property here as they
could not repatriate the gains on account of the lock-in condition. For North
America-based NRIs, who may not wish to come back to India, this will provide an
opportunity to invest and exit as and when they choose to," said Anshuman
Magazine, head (South Asia), at CB Richard Ellis, a real estate consulting
The remittance of sale proceeds of immovable NRI Real Estate is, however, within
the overall ceiling of $1 million per annum.
Barring a few premium properties in Delhi and Mumbai, the Rs 4.5 core cap would
not be a hindrance in almost the entire Indian market for built-up homes and
apartments, real estate analysts said. Banks have been told to allow remittances
out of balances in non-resident Indian ordinary accounts, including sale
proceeds of immovable NRI properties, provided the amount does not exceed $1
million per financial year.
The analysts said NRIs who already own NRI real estate in India, especially
inherited titles, would be able to sell and possibly avoid messy family disputes
Some analysts said the $1 million cap could possibly be circumvented through
co-ownership of properties. "You can buy floors in a building and register them
in separate names. In this way, an investor can repatriate multiples of the $1
million cap," a real estate expert added.
YOU ARE GETTING
YOUR REAL DREAM HOME"
|NRI Frequently Asked
1) Do non-resident Indian citizens require permission of
The Reserve Bank to acquire residential/commercial property in
2) Do foreign citizens of Indian origin require permission
of the Reserve Bank to purchase immovable NRI property in
India for their residential use?
Yes. However, the Reserve Bank has granted general permission
to NRI citizens, whether resident in India or abroad, to
purchase immovable preperty in India for their bona fide
residential purpose. They are, therefore, not required to
obtain separate permission of The Reserve Bank.
3) Who is a foreign citizen of Indian Origin?
A foreign citizen (other than a citizen of Pakistan,
Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal) is deemed
to be of Indian origin if:
a.) He held an Indian Passport at any time or;
b.) He or his father or paternal grand father was a citizen of
India by virtue of the constitution of India or the
Citizenship Act, 1955.TOP
4) In what manner should the purchase consideration for
residential immovable property be paid by foreign citizens of
India origin 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 accounts maintained
with banks in India.
5) What are the formalities required to be completed by
foreign citizens of Indian origin for purchasing residential
immovable Nri properties in India under the general
They are required to file a declaration in form IPI 7 with
Central Office of Reserve Bank at Mumbai within a period of 90
days from the date of purchase of immovable NRI India
properties or final payment of purchase consideration along
with a certified copy of the document evidencing the
transaction and bank certificate regarding the consideration
6) Can NRI India Properties be sold without the permission
of Reserve Bank?
Yes. Reserve Bank has granted general permission for sale of
Nri properties. However, where the property is purchased by
another foreign citizen of Indian origin, funds towards the
purchase consideration should either be remitted to India or
paid out of balances in NRE/FCNR accounts.
7) Can sale proceeds of NRI India Properties, if and when
sold, be remitted out of India?
In respect of residential NRI real estate purchased in India
on or after 26 May 1993, Reserve Bank considers applications
for repatriation of sale proceeds up to the consideration
amount remitted in foreign exchange of the acquisition of the
NRI property for two such NRI properties. The balance amount
of sale proceeds if any or sale proceeds in respect of NRI
Real Estate Investments purchased prior to 26 May 1993 will
have to be credited to the ordinary non-resident rupee account
of the owner of the property.
8) Are any conditions required to be fulfilled if
repatriation of sale proceeds from Nri properties in India is
Applications for repatriation of sale proceeds of property in
India 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 on the
NRI property, whichever is later.TOP
9) What is the procedure for seeking such repatriation?
Applications for necessary permission for remittance of sale
proceeds from NRI Real Esate in India should be made in form
IPI 8 to the Central Office of The Reserve Bank at Mumbai
within 90 days of the sale of the property.
10) Can NRIs acquire or dispose residential property by way
Yes, Reserve Bank has granted general permission to NRIs to
acquire or dispose of NRI India Properties in 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 (PIO) whether resident in
India or not, provided gift tax has been paid.
11) Can immoveable NRI property held in India, be
transferred by way of gift to relatives/registered charitable
trusts/organizations in India?
Yes General permission has been granted by Reserve Bank to
non-resident persons (foreign citizen) of Indian Origin (PIOs)
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. TOP
12) Can NRIs acquire commercial properties in India?
Yes, under the general permission granted by The Reserve Bank,
property other than agricultural land/farm house/plantation
property can be acquired by NRIs 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.
13) Can they dispose of such NRI Indian properties?
Yes, NRI properties in India may de disposed of.
14) Can sale proceeds of NRI property be remitted out of
Yes. Repatriation of original NRI investments in respect of
Indian properties purchased by NRIs on or after 26 May 1993
will be allowed to be remitted up to the consideration amount
originally remitted from abroad provided the NRI 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. TOP
15) Can property (residential/commercial) be given or rent
if not required for immediate use?
Yes, Reserve Bank has granted general permission for letting
out any immovable properties in India. The rental income or
proceeds of any investment of such in-come are eligible for
16) Can NRIs obtain loans for acquisition of a house/flat
for residential purpose from financial institutions providing
The Reserve Bank has granted some general permission to
certain financial institutions providing housing finance e.g.
HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to
grant housing loans to NRI nationals for acquisition of a NRI
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.
17) Can Indian companies grant loans to their NRI staff?
The Reserve Bank permits Indian firms/companies to grant
housing loans to their employees deputed abroad and holding
Indian passport subject to certain conditions. 18. Can an
authorized dealer grant a housing loan to NRIs where he is a
principal borrower with his resident close relative as a
co-signer / guarantor or where the land is owned jointly by
such NRI borrower with his resident close relative? Yes
However in such cases the payment of margin money and
repayment of loan installments should be made by the NRI
Home Loan Requirements for NRIs
Latest salary slip showing statutory deductions and Form 16 (Declaration
from the employer giving the details of income and deductions, duly signed
by an authorized signatory of the Company) or latest acknowledged IT
Returns and bank statements for the last three months.
Self-employed Individuals / Proprietor
Computation of income for the last two years certified by a C.A. or P&L
and Balance Sheet for the last two years certified by a C.A. and copies of
acknowledged IT Returns for the last two years and bank statements for the
last six months. TOP
Computation of income for the last two years certified by a C.A. or P&L
and Balance Sheet for the last two years certified by a C.A. or copies of
acknowledged IT Returns for the last two years and partnership deed,
letter of authority, bank statements for the last six months, proof of
Private Limited Companies
Computation of income for the last three years certified by a C.A., P&L
and balance sheet for the last three years certified by a C.A., copies of
acknowledged IT returns for the last three years, memorandum and articles
of association, board resolution, bank statements for the last six months,
authority letter from all directors to accompany the application form with
photographs of authorized signatories if not specified in the board
resolution, proof of office. TOP
● Documents Required for NRIs
Salaried NRI Applicants:
1) Copy of valid passport showing VISA stamps; Copy of valid visa/work
permit/equivalent document supporting the NRI status of the proposed
account holder; Latest contract copy evidencing salary/salary
2) Overseas bank A/C for the last three months showing salary credits.
Self Employed NRI Applicants:
1) Trade license or equivalent document;
2) Six months overseas bank account statement and NRE/NRO account;
3) Computation of income, P&L account and balance sheet for last three
years certified by a C.A./CPA or any other relevant authority as the case
may be (or equivalent company accounts);
4) Passport copy with valid visa stamp;
5) Brief profile of the applicant and business.