NRI FAQs

NRI guidelines have been prepared in order to address various issues relating to acquisition and transfer of immovable property in India by a person resident outside India under the provisions of the Foreign Exchange Management Act, 1999. These FAQs seek to cover the broad spectrum of issues relating to acquisition and transfer of immovable property in India by a non-resident Indian (NRI) or a foreign national of Indian origin (PIO) or a foreign national of non-Indian origin as also by a person resident in India who is not a citizen of India .

FAQ on acquisition of residential / commercial premises in India by Non-Resident Indians ("NRI") & Person of Indian Origin ("PIO")

  • Who is a non-resident Indian (NRI)?
  • An Indian citizen who stays abroad for employment / carrying on business or vacation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad, is a non-resident. (Persons posted in U. N. O and officials deputed abroad by Central / State Government and Public Sector undertakings on temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian origin are treated on par with non-residential Indian Citizens (NRIs) for the purpose of certain facilities.
  • Who is a person of Indian origin?
    • A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian origin, if, he has, at any time, held an Indian passport, or he or either of his parents or any of his grandparents were citizens of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955).
    • A spouse (not being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons solely or jointly with their NRI spouses.
    • Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens for the purpose of certain facilities.
  • Do NRIs and PIOs require permission of Reserve Bank to acquire residential/commercial property in India ?
  • NRIs and POIs do not require permission from RBI to acquire residential / commercial premises in India (other than agricultural land/farm house/plantation property). A person resident outside India acquiring property to carry on business from India has to file with the Reserve Bank a declaration in Form IPI within ninety days from the date of acquisition of immovable property. A citizen of Pakistan , Bangladesh , Sri Lanka , Afghanistan , China , Iran , Nepal or Bhutan cannot acquire immovable property without prior permission of Reserve Bank. However, he can take on lease an immovable property for not more than 5 years.
  • Can the sales proceeds of residential / commercial premises be remitted out of India ?
  • In respect of residential properties purchased on or after 26th May 1993 , Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non-resident rupee account of the owner of the property.
  • Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?
  • Applications for repatriation of sale proceeds are considered, provided the sale takes place after three years from the date of final purchase or from the date of payment of final installment of the consideration amount, whichever is later
  • What is the procedure for seeking such repatriation?
  • Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.
  • Can such property be sold without the permission of Reserve Bank?
  • Reserve Bank has granted general permission for sale of such property. 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.
  • Are there any formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?
  • They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
  • What guidelines for housing loans to NRI's has Reserve Bank of India issued ?
    • Guidelines for granting housing loans to Non-Resident Indians, Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
    • Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
  • In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?
  • The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.
  • Can NRIs obtain loans for acquisition of a house/flat for residential purpose from authorised dealers/financial institutions providing housing finance?
  • Yes. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the borrower's NRE/FCNR/NRO accounts.
  • Can Indian companies grant loans to their NRI staff?
  • Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions.
  • Can NRIs and PIOs give a Power of Attorney in favor of a person of their choice in India to complete loan formalities on their behalf?
  • Yes. Normally it is desirable to appoint a Power of Attorney in India to represent you in dealings in India . The Power of Attorney should be executed as per drafts provided by the housing finance company. The Power of Attorney holder should be a trustworthy person .
  • Can NRIs and PIOs gift residential / commercial premises to relatives / registered charitable trusts / organisations in India ?
  • Yes. General permission has been granted by Reserve Bank to non-resident persons (foreign citizens) of Indian origin to transfer by way of gift immovable property held by them in India to relatives and charitable trusts/organisations subject to the condition that the provisions of any other laws, including Foreign Contribution (Regulation) Act, 1976 and stamp duty laws, as applicable, are duly complied with.
  • Can NRIs and PIOs give residential / commercial premises on rent 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 are eligible for repatriation subject to payment of taxes and production of a certificate issued by a chartered accountant with the guidance of an Authorised Dealer such as a bank for completion of formalities.
  • Can the rental income from such property be remitted outside India ?
  • No. Such income cannot be remitted abroad and will have to be credited to the ordinary non-resident rupee account of the owner of the property .
  • Can Indian nationals buy a property in the NRI City ?
  • Yes! An Indian Nationals can buy a property in NRI City .

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