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Investment
Procedures |
II.
EXCHANGE CONTROL REGULATIONS AFFECTING THE ACQUISITION OF RESIDENTIAL PROPERTY IN INDIA
Consequent to the liberalisation in Exchange Control policy and procedures,
certain relaxations in the existing regulations and procedures governing the acquisition
holding etc. of 1 immovable property in India have been announced.
The current position is therefore as under:
1. Non-resident Indians holding Indian passport do not require any
permission from RBI for acquiring immovable property for bonafide residential purposes as
section 31 of FERA 1973 is not applicable to them.
2. Non-resident Indians holding Indian passport may pay the purchase
consideration either by remittance of funds from abroad through normal banking channels or
out of NRO account or out of NRE account or out of FCNR account.
3. As per the recent relaxation RBI has granted general pen-nission to
Non-resident Indians holding Foreign Passport (ie. Foreign Citizens of Indian Origin) to
acquire, hold,transfer or dispose off by way of sale or inheritance of immovable
properties situated in India provided.
a. The property is for the purchaser's bonafide residential
purpose.
b. The purchase consideration is met either by remittance of
funds from abroad through normal banking channels or out of NRE/FCNR account or out of
FCNR Special Deposit account.
4. Foreign citizens of Indian origin are however required to declare the
properties to RBI within a period of 90 days from the date of purchase in Form IP- 17.
The following documents must be submitted along with the declaration.
a. A certified copy of the purchase deed or a
certificate from the Co-operative Housing Society or an Association of the apartment
owners as an evidence to transfer/registration of the property in the declarant's name.
b. Certificate from the declarant's bankers in
India evidencing receipt of inward remittance (s)- in foreign exchange through normal
banking channel or withdrawal of funds from the declarant's NRE/FCNR account/FCNR Special
Deposit account and payment of consideration for the property out of those funds.
5. Where a Foreign Citizen of Indian origin wishes to acquire a property
out of funds held in NRO account then the fore said general permission does not hold and a
prior permission from RBI will be required which can be applied for in Form IPI- 1.
6. Where a Foreign Citizen of Indian origin wishes to acquire a property
from the sale proceeds of another property, prior permission of RBI is essential and may
be obtained by applying in Form IPI-1.
7. Any number of properties can be acquired by non-resident Indians
regardless of whether they are holding Indian passport provided they are required for
bonafide residential purposes.
III. REPATRIATION OF INVESTMENT IN RESIDENTIAL PROPERTY
The Reserve Bank of India has vide Notification No. FERA/152/93-RB dated
26.05.94. permitted persons of Indian origin whether holding Indian passport or a foreign
passport (NRI) to repatriate the original investment in equivalent foreign exchange after
obtaining prior approval from the Reserve Bank of India. This facility will however be
restricted to maximum of two houses.
The above permission allowing repatriation is subject to the following conditions--
a. The residential properties are purchased on
or after 26.05.93.
b. The residential properties are not
transferred or sold for a period of 3 years from the date of the final purchase deed or
from the date of payment of final instalment, where the agreementfor purchase so provides.
c. Only the amount of sale proceeds equivalent
to the original investment in foreign exchange will be allowed to be repatriated outside
India; balance if any will have to be credited to the NRO account of the NRI.
The repatriation is subjected to prior approval from RBI which is required to be obtained
in Form IPI- 8, within a period of 90 days of the sale of the property. Form IPI- 8 must
be accompanied by a copy of the Form EPI-7 submitted earlier at the time of acquisition of
the property-
IV. ACQUISITION AND DISPOSAL OF RESIDENTIAL PROPERTY BY GIFT
Under Section 3 1 (1) of FERA 1973, General permission has been granted to person
of Indian origin whether holding Indian passport or foreign passport to acquire, or
dispose off residential properties (restricted to two houses) situated in India by way of
gift from or to a relative who may be a Indian citizen or a person of Indian origin
whether resident in India or not.
V. INVESTMENT IN COMMERCIAL PROPERTY
The Reserve Bank India has vide Notification No. FERA/152/93. RB dated 26.05.93
granted General Permission to persons of Indian origin whether holding an Indian passport
or foreign passport to acquire, by way of purchase or inheritance and transfer or dispose
off by sale of commercial immovable properties situated in India subject to following
conditions.
a. The purchase consideration is met either by remittance of funds from
abroad through normal banking channels or out of NRE/FCNR account.
b. The purchaser declares the properties to RBI within a period of 90
days from the date of purchase in Form IPI-7. The following documents must be submitted
along with the declaration.Certified copy of document evidencing the purchas@
'transaction.Certificate from the declarant's bankers in India evidencing receipt of
inward , @emittance(s) of foreign exchange through normal banking channel or withdrawal of
funds from the declarant's NRE/FCNR account and payment of consideration for the property
out of those funds.
VI. REPATRIATION OF INVESTMENT IN COMMERCIAL PROPERTY
The Reserve Bank of India has vide Notification No. FERA/152/93-RB dated 26.05.93
permitted persons of Indian origin whether holding Indian passport or a foreign passport,
to repatriate the original investment in commercial property, subject to the following
conditions after obtaining prior approval from the Reserve Bank of India.
a. The commercial properties are purchased with
funds remmitted from abroad or out of the NRE/FCNR account after 26.05.1993.
b. The commercial properties are not
transferred or sold for a period of 3 years from the date of the final purchase deed or
from the date of payment of final instalment, where the agreement of purchase, so
provides.
c. Only the amount of sale proceeds equivalent to the original
investment in foreign exchange will be allowed to be repatriated outside India; balance if
any will have to be credited to the NRO account of the NRI.
d. The repatriation is subject to prior
approval from RBI which is required to be obtained in Form IPI- 8, within a period of
90 days of the sale of the property. Form- 8 must be accompanied with a copy of the
Form IPI-7 submitted earlier at the time of acquisition of the property.
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