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Who
is an NRI?
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Under
the Foreign Exchange Regulation Act of 1973, Non-Resident Indians are
Indian citizens who stay abroad for employment or for carrying on business
or vocation outside India or for any other purpose in circumstances indicating
an indefinite stay abroad, or
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Government
servants who are posted abroad on duty with the Indian mission and similar
other agencies set up abroad by Government of India where the officials
draw their salaries out of Government resources, or
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Government
servants deputed abroad on assignments with foreign Governments or regional/international
agencies like the World bank, International Monetary Fund (IMF), World
Health Organisation (WHO), Economic and Social Commission for Asia and
the Pacific (ESCAP), or
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Officials
of State Governments and public sector undertakings abroad on temporary
assignments or posted to their branches or offices abroad.
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| Can
NRI avail of Home Loans back in India? |
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The
Reserve Bank of India has issued certain guidelines for granting loans
to Non-Resident Indians by Housing Finance Company. The guidelines are:
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The loan amount
should not exceed 85% of the cost of the dwelling unit. |
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Own
contribution, which is the cost of the dwelling unit can be financed,
less the loan amount, can be met from direct remittances from abroad through
normal banking channels, from the Non-Resident (External) account in India
and /or the Non-Resident (Ordinary) account in India.
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Repayment
of the loan, comprising of principal and interest including all charges
are to be remitted to HDFC from abroad through normal banking channels,
from the Non-Resident (External) account in India and /or the Non-Resident
(Ordinary) account in India.
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Can
I buy immovable property in India?
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| Acquisition
of immovable property |
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Acquisition
of immovable property by NRI's holding Indian passport:Non-Resident Indians
holding Indian passport do not require prior permission of Reserve Bank
of India to buy residential or commercial immovable property in India.
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The
purchase consideration may be paid either by remittance of funds from
abroad through normal banking channels or out of NRE/NRO/FCNR account.
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Non-Resident
of Indian nationality do not require any permission for acquisition, transfer
or disposal by way of gift of immovable property which is not a farmhouse
or agricultural land or plantation property. Declaration on form IPI-7
for acquisition of commercial property for carrying on any industrial,
commercial or trading activity by their property/partnership firm in India
is required to be filed with RBI within 90 days from the date of purchase.
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| Acquisition
of immovable property by foreign citizens of Indian origin |
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Under
the general permission to Non-Resident Indians holding foreign passport,
the Reserve Bank of India has allowed them to acquire, hold, transfer
or dispose of by way of sale or inheritance, immovable properties situated
in India.
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A
foreign citizen shall be deemed to be of Indian origin, if
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he held an
Indian passport at any time; or |
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he
or his father or paternal grandfather was a citizen of India by virtue
of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
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| Acquisition
of immovable property by foreign nationals of Non-Indian origin |
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Foreign
Nationals of Non-Indian origin (whether resident in India or not) are
permitted on application to Reserve Bank of India (Form No- IPI 1) to
acquire , hold, transfer or dispose of immovable property provided the
following conditions are satisfied.
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the
purchase consideration is made out of foreign exchange remitted from abroad
in any convertible foreign currency through normal banking channels.
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the property
to be acquired is only for bonafide residential use. |
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the
Foreign National of Non-Indian origin will provide an undertaking not
to repatriate the sale proceeds at any future date.
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nvestment
in ready-built house is permitted. |
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investment
in vacant plot is not allowed. |
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one unit for
residential purposes is allowed. |
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consideration
will be made on a case by case basis only. |
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In
the absence of a specific circular, it may be necessary for a foreigner
of Non-Indian origin to obtain RBI's prior permission before letting out
the residential premises acquired by him
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| General
Permission to Foreign Companies
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The
Reserve Bank of India has given general permission to foreign companies
to acquire or hold any immovable property which is necessary for or incidental
to any activity carried on in India. The foreign companies engaged in
manufacturing or trading activity will be permitted to open branches in
India for the following purposes:
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to represent
the parent company/ other companies in various matters in India. e.g. acting
as buying/selling agents in India. |
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to conduct
research work in which the parent company is engaged provided the results
of the research are made available to Indian Companies. |
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to
undertake export and import trading activity; and
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to
promote technical and/or financial collaboration between Indian companies
and overseas companies.
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Can
NRI's resell their immovable property in India? Can NRI's let out their
immovable properties in India?
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| Permission
to let out Immovable Property |
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The Reserve
Bank of India has also granted general permission to Non-Resident Indian
citizens of Indian origin, to let out their residential properties acquired
for their bonafide residential purpose but which on account of their residence
abroad, are not required for their immediate residential purpose. |
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| Sale
of immovable property |
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The
Reserve Bank of India has granted general permission to Non-Residents
holding Indian passports and foreign citizen of Indian origin, whether
resident in India or not, to dispose of by sale or inheritance immovable
properties situated in India subject to certain conditions. However ,
such property can be sold to another foreign national of Indian origin
provided funds towards purchase consideration are either remitted to India
or paid out of balances in NRE/FCNR accounts.
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Can
NRI's repatriate their funds invested in immovable property in India?
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The
Reserve Bank of India has allowed general permission to Non-Residents
holding Indian passports and foreign citizen of Indian origin to repatriate
original investments equivalent foreign exchange in residential/commercial
properties after obtaining prior approval subject to maximum of two houses,
provided that:
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the residential
properties are purchased on or after 26th May 1993. |
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the
properties have been purchase from the remittances from abroad or from
NRE/FCNR account in India.
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the
properties are not transferred or disposed of by way of sale for a period
of three years from the date of final purchase deed or from the date of
payment of final instalment where the agreement for purchase so provides.
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only
amount of sale proceeds equivalent to the original investment in foreign
exchange, if sold after three years, will be allowed to be repatriated
outside India and the balance amount of sale proceeds of the property
should be credited to seller's Non-Resident Ordinary (NRO) Account with
an authorised bank in India.
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the
person intending to repatriate the original investment made in residential
immovable properties shall submit it within a period of 90 days of sale
of the property an application in Form IPI 8 to the below address.
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