1) Who is a NRI under the provisions of Foreign Exchange Management Act?

Generally, an Indian Citizen who is not resident in India for a period over 182 days is a non-resident Indian. Persons posted in U.N. organizations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents.

2) Do non-resident Indian citizens require permission of The Reserve Bank to acquire residential/commercial property in India?

No.

3) In what manner should the purchase consideration for residential immovable property be paid by NRI 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/NRO accounts maintained with banks in India.

5) Can the properties held by NRIs in India be sold without the permission of Reserve Bank?

Yes. Reserve Bank has granted general permission for sale of NRI properties. 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.

6) Are any conditions required to be fulfilled if repatriation of sale proceeds from NRI properties in India is desired?

Applications for repatriation of sale proceeds of property in India are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount on the NRI property, whichever is later.

7) What is the procedure for seeking such repatriation?

Applications for necessary permission for remittance of sale proceeds from NRI Real Estate in India should be made in form IPI 8 to the Central Office of The Reserve Bank at Mumbai within 90 days of the sale of the property and the same can be made through the designated banking channels.

8) Can NRIs acquire or dispose residential property by way of gift?

Yes, Reserve Bank has granted general permission to NRIs to acquire or dispose of NRI India Properties by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin (PIO) whether resident in India or not.

9) Can immoveable NRI property held in India, be transferred by way of gift to relatives/registered charitable trusts/organizations in India?

Yes General permission has been granted by Reserve Bank to non-resident persons (foreign citizen) of Indian Origin (PIOs) to transfer, by way of gift, immoveable property held by them in India to relatives and charitable trusts / organizations subject to the condition that the provisions of all other laws, as applicable are complied with.

10) Can NRIs acquire commercial properties in India?

Yes, under the general permission granted by The Reserve Bank, property other than agricultural land/farm house/plantation property can be acquired by NRIs provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser's NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

Payments can also be made by from NRO account in which case the investment will remain on Non – Repatriation basis

11) Can sale proceeds of NRI property be remitted out of India?

Yes. Repatriation of original NRI investments in respect of Indian properties purchased by NRIs on or after 26 May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the NRI property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final installment of consideration amount, which ever is later. Applications for the purpose are required to be made to the Central Office of Reserve Bank within 90 days of the sale of property in form IPI 8.

12) Can property (residential/commercial) be given or rent if not required for immediate use?

Yes, Reserve Bank has granted general permission for letting out any immovable properties in India. The rental income or proceeds of any investment of such in-come are eligible for repatriation subject to payment of local income tax.

13) 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 passport subject to certain conditions.
(Source: Reserve Bank of India)

14) Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?

The Reserve Bank has granted some general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to NRI nationals for acquisition of a NRI house/flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts.

15) Can funds held in an NRO account be repatriated?

Authorized Dealers can allow remittance/s up to USD 1 million per financial year (April-March) for bonafide purposes, from balances in NRO accounts subject to payment of applicable taxes. The limit of USD 1 million per financial year includes sale proceeds of immovable properties held by NRIs/PIO.