FEMA requires observation of its provisions in letter and spirit and if any contravention may land in penalties on the erring company and individuals. There are various conditions and stipulations in case of FDI , ODI , investment by individuals in foreign shares , purchase of assets in foreign countries , extending guarantees , availing ECBs , supplier's credit . In this column , I will discuss all intricacies and complications involving the interpretation of FEMA Act provisions in detail.
Saturday, February 19, 2011
PURCHASE OF PROPERTIES BY NRI / PIO IN INDIA
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).
The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land / plantation property / farm house in India.
Whether agricultural land/ plantation property / farm house in India can be purchased by an NRI / PIO ?
No. Since general permission is not available to NRI/PIO to acquire agricultural land/ plantation property / farm house in India, such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India.
Whether an NRI / PIO has to report to RBI after purchase of property in India?
No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents with the Reserve Bank.
IS THERE ANY RESTRICITION FOR NRI / PIO TO PURCHASE ANY PROPERTY IN INDIA?
There are no restrictions on the number of residential / commercial properties that can be purchased.
WHETHER AN INDIAN RESIDENT CAN GIFT A PROPETY TO A NRI / PIO?
Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from
i) a person resident in India or
ii) an NRI or
iii) a PIO.
However, the property can only be commercial or residential. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift.