NRI Corner

A Non-Resident Indian (NRI) as per India’s Foreign Exchange Management Act 1999 (FEMA), is an Indian citizen or Foreign National of Indian Origin resident outside India for purposes of employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period. An individual will also be considered NRI if his stay in India is less than 182 days during the preceding financial year.

A Person of Indian Origin (PIO) means a foreign citizen (except a national of Pakistan, Afghanistan Bangladesh, China, Iran, Bhutan, Sri Lanka, and Nepal) who at any time held an Indian passport

Or

who or either of their parents/ grandparents/ great grandparents were born and permanently resident in India as defined in Government of India Act, 1935, or the Citizenship Act, 1955.

An Overseas Citizen of India (OCI) is a person who is technically a citizen of another country, but is granted several rights and freedoms enjoyed by Indians. An OCI card then, is a long-term visa available to such citizens of other countries who have familial links to India. It entitles them to a lot of the same benefits as NRIs and Indian citizens.

The Foreign Exchange Management Act, 1999 (FEMA) and the Regulations notified by the Reserve Bank of India (RBI), regulates the acquisition or transfer of immovable property in India by Persons resident outside India.

According to the RBI guidelines, the following categories can voluntarily purchase immovable property in India.

1. A Non-Resident Indian (NRI) and a Person of Indian Citizen (PIO)

They can acquire a residential property in India by a way of gift from an Indian or purchase it.  He or she can even acquire residential property by way of inheritance from a person who is a resident of India as per the Provisions of Section 6(5) of the FEMA, 1999. The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land / plantation property / farmhouse in India.

2. OCIs can purchase immovable property in India except agricultural land/plantation property/farmhouse.

How can a Non-Resident Indian (NRI) and Overseas Citizen of India (OCI) acquire immovable property in India?

I am a NRI and want to buy immovable property in India. Please guide me about the accepted modes of payments?

The payments for immovable property has to be received in India through banking channels and is subject to payment of all taxes and other duties/ levies in India. The payment can also be made out of funds held in NRE (Non-Resident Rupee)/ FCNR(B) (Foreign Currency Non Resident)/ NRO (Non-Resident Ordinary Rupee) accounts of the NRIs/ OCIs. Payments should not be made through travellers’ cheque and foreign currency notes.

• PAN card (Permanent account number)
• OCI / PIO card (In case of OCI / PIO)
• Passport (In case of NRI)
• Passport size photographs
• Address proof

For details, feel free to contact our Real Estate Consultant.

A person resident outside India, not being a Non-Resident Indian or an Overseas Citizen of India, who is a spouse of a Non-Resident Indian or an Overseas Citizen of India may acquire immovable property (other than agricultural land/ farm house/ plantation property), jointly with his/ her NRI/ OCI spouse subject to the conditions laid down in regulation 6 of FEMA 21(R).

No, there are no such restrictions.

• 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.
• The quantum of loans, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person residing in India.
• The loan amount is not entitled to be credited to Non-Resident External (NRE)/Foreign Currency Non-Resident (FCNR)/Non-Resident non-Repatriable (NRNR) account of the borrower.
• The loan needs to be fully secured by an equitable mortgage by deposit of title deal on the property proposed to be purchased, and if necessary, also be lien on the borrower’s other assets in India.
• The installment of loan, interest and other charges, if any, shall be paid by the borrower by remittances from outside India through normal banking channels or out of funds in his Non-Resident External (NRE)/Foreign Currency Non-Resident (FCNR)/Non-Resident Non-Repatriable (NRNR)/Non-Resident Ordinary (NRO)/Non-Resident Special Rupee (NRSR) account in India, or out of rental income derived from renting out the property acquired by utilization of the loan or by any relative of the borrower in India by crediting the borrower’s loan account through the bank account of such relative
• The rate of interest on the loan shall conform to the directives issued by the Reserve Bank of India or, by the National Housing Bank (subject to the case).

• The documents required to be submitted by the NRIs are different from the resident Indians. Non-Resident Indians are required to submit additional documents like a copy of the passport and a copy of the work contract, etc. Also, NRIs need to follow certain eligibility criteria in order to get home loans in India.
• Power of Attorney is one of the vital documents required while processing an home loan to NRI. Since the borrower is not based in India, the loan providing company/bank needs a representative in place of the NRI to deal with, if needed. Not obligatory, the Power of Attorney is usually drawn on the NRIs spouse/parents/children/close relatives or friends.

Yes, the Reserve Bank has granted general permission to NRIs to acquire or dispose of NRI India Properties 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.

Yes. NRI/PIOs can willingly rent out immovable property, without seeking any permission from the Reserve Bank of India. The rental income being a current account transaction is repatriable outside India, only if property tax paid or provided for.

Income Tax

Yes, a NRI/OCI/PIO need to file tax returns if they fulfill the below conditions:

• If taxable income in India during the year was above the basic exemption limit of INR.1.6 lakh OR
• If short-term or long-term capital gains were earned from sale of any investments or assets, even if the gains are less than the basic exemption limit.

Please Note: The enlarged exemption limit for senior citizens and women is applicable only to Residents and not to Non-Residents.

There are two exemptions:

• If the taxable income consisted only of investment income (interest) and/or capital gains income and if tax has been deducted at source from such income, you don’t need to file a tax return.
• If you have earned long term capital gains from the sale of equity shares or equity mutual funds, you need not to pay any tax and therefore it is not required to include that in your tax return.

• You could file your tax return either by giving a power of attorney to someone in India or by sending your form and documents to a tax expert/chartered accountant in India who would then file the return on your behalf.
• You can also file the Indian tax returns by using the online platform.

Power of attorney is a legal document in which one person gives authority to another to do something on his behalf. The person on whom power of attorney made act as an agent for the person who made the attorney. The agent may have limited or unlimited powers on behalf of his principal as mentioned under the contract between them.

Buying an immovable property associated with Pearl Group can give numerous benefits to NRIs.

• Top of the class luxury flat/villa at competitive prices.
• Assistance for renting or re-selling the property.
• Dedicated counselling in investing to maximise returns
• All Auto CAD drawings and legal documents shared to the client at the time of dealing
• Assigned dedicated customer relation personnel
• Conveyance facility for visiting clients
• Regular updates via email (if requested) on ongoing projects.
• Home loan assistance with leading banks.
• Legal assistance on legal documentation and power of attorney, if required.
• Reference Available to Cross Check Validation.

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