NRIs A non-resident Indian who wishes to buy a property in India, should be aware of the regulations that govern the acquisition and sale of property, as well as income earned from the property.
TS- RERA Licensed Real Estate Agent from Hyderabad
Important FEMA rules that NRIs must keep in mind
In order to attract more foreign investment, the Reserve Bank of India has made the rules simple for NRI investments. Real estate transactions fall under the purview of the Foreign Exchange Management Act (FEMA).
An NRI or person of Indian origin (PIO), as defined in FEMA, can acquire by way of purchase, any immovable property in India, other than agricultural land/plantation property/farm house. This is under a general permission that has been given by the government of India. However, no person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan, shall acquire or transfer immovable property in India, other than lease, not exceeding five years, without prior permission of the Reserve Bank
Types of properties where NRIs can invest
An NRI is allowed to invest in both residential and commercial properties in India. However, any agricultural land, farm house and plantation property can be owned, only if it is inherited or gifted to the NRI.
Financial transactions
When it comes to property transactions in India, NRIs/ PIO can make payments out of:
- Funds remitted to India through normal banking channel.
- Funds held in NRE/ FCNR (B) / NRO account maintained in India.
- No payment can be made either by traveller’s cheque or by foreign currency notes.
- No payment can be made outside India.
NRIs can earn returns from their investments in real estate, in the form of rental income and short or long-term gain and NRIs are taxed, for profit earned from real estate investments
