Frequently Asked Questions
An Indian Citizen who stays abroad for (a) employment/ carrying on business or (b) vacation outside India or (c) stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Persons posted in U.N. organizations and officials deputed abroad by Central/ State Government and Public Sector Undertakings on temporary assignments are also treated as non-resident. Who is a RI (Non Resident Indian) ?
Person-of-Indian Origin can be people who are citizens of a foreign country, but who was born in India or whose father and forefathers were of Indian origin.To be considered a PIO the foreign national must register with the appropriate Indian authorities and obtain the PIO Card. PIO Card holders are granted the same benefits that are extended to a NRI.
These are bodies largely owned by people who are Indian citizen or of Indian origin but reside outside India. They include overseas companies, corporate bodies and partnership firms owned mostly by the Indian citizens or people of Indian origin. In these bodies, three-fourth of the interest is owned by Indian citizens or people of Indian origin.
Yes, it is absolutely possible for them however, through the RBI and Government way which includes, Foreign Investment Promotion Board (FIPB). These Individuals and bodies can invest upto 100% equity in Indian real estate and civil aviation sectors. Their investment in India is fully repatriable except in case of real estate which has 3 years lock-in period on original investment along with 16% cap on dividend repatriation.
Payments can be made by Foreign Citizens of Indian Origin through the inward remittances in foreign exchange through normal banking channels, or by NRI out of funds from NRE/FCNR accounts in Indian banks.
Any number of commercial properties can be acquired by them, as long as they can afford it legally.
It needs to be noted that the foreign nations with PIO cards can Acquire real estate, whether it is land or premises, and such activity will be governed by the Foreign Exchange and Management Act, 1999 (FEMA). This Act was amended in 2002 and is dependent on the status of the foreign national including,but not limited to, the foreign national’s resident status. The Ministry of Commerce and Industry governs foreign investments into India, with the Reserve Bank of India (the RBI), as the regulatory authority in most cases. With the permission of Reserve Bank of India (RBI), an NRI and a PIO can freely purchase immovable property in India. This permission, however, covers purchase of residential and commercial property only. Foreign nationals, NRIs and PIOs are not permitted to purchase agricultural land, plantation property and/or a farmhouse in India unless they have obtained specific approval from the RBI and the proposal is considered in consultation with the Government of India. However, once general permission from the RBI has been obtained there is no restriction to the number of residential and commercial property that an NRI or PIO can purchase. foreign national of non-Indian origin, resident outside India can neither purchase any immovable property in India (except as provided above), nor can such a person be a joint holder of immovable property purchased by an NRI or PIO. However, such a foreign national may take on lease residential accommodation without RBI permission provided the lease is for less than a five-year period. In addition, the foreign national residing in India may purchase a property after obtaining government approval and fulfilling other applicable requirements.
Where the acquisition of property is by an Indian company owned by a foreign national which has been set up to conduct activities permitted under the FDI norms or;the foreign national is a Person of Indian Origin (PIO) card holder.
In all other circumstances, applications have to be made to the RBI, which are considered on a case-by-case basis subject to the FEMA requirements. In addition to these provisions that apply all over India there may be specific state laws that regulate the purchase or acquisition of property in that state. For instance, every state has a minimum period of residency requirement in such state before any individual can acquire a property.Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan are not allowed to purchase property in india.
Person Resident in India – Under FEMA, a person resident in India is defined as a person residing in India for more than 182 days during the course of the preceding financial year (April-March) and who has come to or stays in India either for taking up employment, carrying on business or vocation in India or for any other purpose, that would indicate his intention to stay in India for an uncertain period.FEMA determines residential status by operation of law and the onus is on an individual to prove the residential status, if questioned by any authority.
NRIs or PIOs can repatriate the sale proceeds of commercial or residential property as long as the funds were transferred from overseas accounts or were funds from the NRE or FCNR(B) accounts. The amount repatriated cannot exceed the amount that was paid initially. The only restriction to the repatriation of sale proceeds is that it should not exceed two properties.
The Documents required to be submitted by Foreign Nationals, PIO, NRIs and OCI would be as mentioned below :
- Copy of Identity and Address Proof
- Copy of PAN Card(s)
- Copy of Passport (required) & Visa (if required)
- Copy of RBI Permission Letter(in case of foreign national)
- Copy of Documents regarding payment through NRE/NRO account
- Copy of PIO/NRI/OCI Card
- Copy of TRC and Form 10F (if applicable)
Where the lease purports to be for a term exceeding thirty years or in perpetuity or does not purport to be for any definite term; the stamp duty is same duty as applicable to a Conveyance, for a consideration equal to the market value of the property which is the subject of the lease.
The Customer will receive an acknowledgement for the installment payment made byway of a receipt. After the customer has made the payment of 20 Percent of the Basic Sale Price, the Developer enters into a Developer Buyer Agreement for the said Allotted Unit.
The Title will formally transfer to the Customer when possession of the Unit is offered along with the Sub-Lease Deed for the said Unit is executed between the Developer and the Customer.
TheAllottee/Customer can transfer the property as soon as the Agreement to Sub-Lease is executed between the Developer and the Allottee/customer.
The Government of India has granted general permission for NRI/PIO/OCI to buy property in India and they do not have to pay any taxes even while acquiring property in India. However, taxes have to be paid if they are selling this property. Rental income earned is taxable in India, and they will have to obtain a PAN and file return of income if they have rented this property. On sale of the property, the profit on sale shall be subject to capital gains.
India has DTAA’s with several countries which give a favorable tax treatment in respect of certain heads of income. However, in case of sale of immovable property, the DTAA with most countries provide that the capital gains will be taxed in the country where the immovable property is situated. Hence, the non-resident will be subject to tax in India on the capital gains which arise on the sale of immovable property in India. Letting of immovable property in India would be taxed in India under most tax treaties in view of the fact that the property is situated in India.
If you are an NRI/OCI/PIO, you would have to file your income tax returns if you fulfill either of these conditions:
(a) Your taxable income in India during the year was above the basic exemption limit of ` 2.5 lakh OR
(b) You have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit.
Note: The enhanced exemption limit for senior citizens and women is applicable only to residents and not to non-residents.
Please refer to the below links for updated information:
Please refer to the below links for updated information:
Ministry of External Affairs: http://mea.gov.in
Indian Income tax: http://www.incometaxindia.gov.in
RBI (NRI FAQ): http://www.rbi.org.in/scripts/faqview.aspx?id=52
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