- Who can purchase immovable property?
- Under the general permission available, the following categories can freely purchase immovable property in India:
i) Non-Resident Indian (NRI)- that is a citizen of India resident outside India
ii) Person of Indian Origin (PIO)- that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
1. At any time, held Indian passport, or
2. Who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). However these conditions are available only for the residential and commercial base properties.
- Who is an NRI?
NRI’s full form is Nonresident Indian. An Indian citizen who is the lives outside the India is called NRI.
- Who are Authorized Persons under Foreign Exchange Management Act?
According to section 10(1) of FEMA Act, RBI issued certain banks, entities, financial institutions and selected registered companies to carry out all permissible current and capital account transactions, foreign exchange transactions and purchase and sale of forex by companies.
- Who is authorized to sell of foreign exchange reserves for travelling abroad?
Foreign exchanges can be purchased from any authorized entities like certain banks, financial institutions and registered companies. Moreover Full-Fledged Money Changers are also permitted to release exchange for business.
- How much foreign currency can be carried in cash for travel abroad?
Travellers going to all countries other than (a) and (b) below are allowed to purchase foreign currency notes / coins only up to USD 3000 per visit. Balance amount can be carried in the form of store value cards, traveller cheque or banker’s draft. Exceptions to this are (a) travellers proceeding to Iraq and Libya who can draw foreign exchange in the form of foreign currency notes and coins not exceeding USD 5000 or its equivalent per visit; (b) travellers proceeding to the Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States who can draw entire foreign exchange (up-to USD 250,000) in the form of foreign currency notes or coins.
For travellers proceeding for Haj/ Umrah pilgrimage, full amount of entitlement (USD 250,000) in cash or up to the cash limit as specified by the Haj Committee of India, may be released by the ADs and FFMCs.
- What is Money Transfer Service Scheme?
The Money Transfer Service Scheme (MTSS) is a way to transfer personal remittances from abroad to recipients in India. Remittance to foreign tourists visiting India and the family maintenance are permissible.
- Who is overseas principal?
Registered companies or the entities licensed by the RBI or the government of India for carrying out money transfer services.
- What is the meaning of transfer?
“Transfer” includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien.
- What is direct investment outside India?
Direct investment outside India Is an investment by way of a capital contribution or a subscription to a foreign entity's Memorandum of Association, or by way of purchase of the foreign entity's existing shares, either by market purchase or private placement, or by way of a stock exchange, but does not include a portfolio investment.
- What is the Liberalised Remittance Scheme (LRS) of USD 2,50,000 ?
Under the Liberalized Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2, 50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. Further, resident individuals can avail of foreign exchange facility for the purposes mentioned in Para 1 of Schedule III of FEM (CAT) Amendment Rules 2015, dated May 26, 2015, within the limit of USD 2, 50,000 only.
The Scheme was introduced on February 4, 2004, with a limit of USD 25,000. The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions.
In case of remitter being a minor, the LRS declaration form must be countersigned by the minor’s natural guardian. The Scheme is not available to corporate, partnership firms, HUF, Trusts etc.
- Whether a non resident can acquire agricultural property and plantation property/farm house in India?
No, NRI/PIO could not acquire agricultural property and plantation property in India.
- Can external embassies / diplomats / general consulates buy property in India?
Yes they can buy and sell the immovable properties in India except agricultural land and farming properties provided with the prior approval by the government of India and the external ministry to acquire such property. This is paid off from funds transferred from abroad via bank channels for purchase of immovable property investment in India.
- Which account shall be credited with the sale of such properties?
Sale of such properties may be credited to NRO accounts.
- How Indian citizen could invest in immovable property outside India?
According to the section 6(4) of FEMA Act, A person resident in India may hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.
It can be acquired as a gift from a person (1) mentioned as in under 6(4) FEMA Acts, (2) who has acquired it prior to July 8, 1947, (3) Pursuant to the foreign exchange regulations in force at the time of the purchase.
- Whether a resident who bought immovable property in India continues to hold it after becomes NRI?
Yes according to section 6(4) of FEMA Act, a person can continue to hold the immovable property if such property was acquired, held or owned by him/ her when he/ she was resident outside India or inherited from a person resident outside India.
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How is the payment of property purchased in India accepted?
Payment of property purchased in India can be transferred through the banking channels credited to the NRO accounts including all the services and taxes applicable in India.
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Can a spouse of an NRI/ OCI who is not a NRI/ OCI acquire property in India?
A spouse of a Non-Resident citizen of India may acquire immovable property except the agricultural lands and the framing properties, jointly with his/ her NRI/ OCI spouse subject to the conditions laid down in regulation 6 of FEMA 21(R).
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Whether NRI/IPO can acquire immovable property by way of gift?
Yes, an Indian citizen, NRI and IPO can acquire an immovable property by the way of gift.
- Whether NRI, IPO gift their property in India?
Yes NRI, IPO and Indian citizen can gift their residential and a commercial property.
- Whether a remittance made only in dollar?
Remittance can be made in any foreign currency.
The Author, Rakshit Sharma, is a 3rd year student pursuing BBA LLB from Bhartiya Vidyapeeth New Law College Pune. He is currently interning with LatestLaws.com.
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