RELEVANT LAWS & NOTIFICATIONS WITH RESPECT TO ACQUISITION & TRANSFER OF IMMOVABLE PROPERTY IN INDIA BY A PERSON RESIDENT OUTSIDE INDIA:
1. Section 6 (3) (i) of Foreign Exchange Management Act, 1999 (“FEMA 1999”) – “acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India.”
2. Reserve Bank of India (“RBI”) notification No. FEMA 21/2000-RB Dated May 3, 2000 (Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2000) as amended from time to time as per the following RBI notifications:
a) FEMA 65/2002- RB Dated June 29,2002 - Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) (Amendment) Regulations 2002
b) FEMA 93/2003- RB Dated June 9,2003- Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) (Amendment) Regulations 2003
c) FEMA 146 /2006- RB Dated February 10,2006- Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) (Amendment) Regulations 2006
d) FEMA 186/2009-RB dated February 3, 2009- Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) (Amendment) Regulations 2009
3. Section 6 (5) of FEMA,1999 – “A person resident outside India may hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India.”
1. NRIs/PIO’s can freely purchase immovable property in India (except agricultural land/plantation property/farm house for which specific approval is required from the RBI in consultation with Government of India (“GOI”)).
2.NRIs/PIOs can freely acquire immovable property by way of gift from person resident in India or NRI or PIO except agricultural land/plantation property/farm house.
3. NRIs/PIOs can inherit immovable property in India.
4. For acquiring agricultural land/plantation property/farm house specific approval has to be obtained from RBI and the proposals are considered in consultation with GOI.
1. *Foreign nationals of non-Indian origin can take residential accommodation on lease for a period not exceeding 5 years without taking any permission from or reporting to RBI.
2. Foreign nationals resident in India can purchase immovable property in India without any approvals from RBI provided that the person concerned has obtained the approvals and has fulfilled the requirements if any prescribed by the other authorities such as the concerned State Government etc. A foreign national is a person resident in India if the person is 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 an employment, carrying on business or vocation in India or any other purpose that would indicate his intention to stay in India for an uncertain period.
The Haryana State Government, as on date, has not mandated any requirement of such specific approval from its offices/ministries.
3. Foreign nationals can inherit immovable property from a person resident in India and person resident outside India.
*For foreign nationals holding citizenship of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, only Option 1 is available in default and for exercising options 2 & 3 specific RBI approval required in consultation with GOI. However they can take immovable property on lease for a period not exceeding 5 years.
1. A foreign national of non Indian origin resident outside India cannot acquire or transfer immovable property in India.
2. A foreign national cannot be a joint holder of property purchased by an NRI /PIO.
3. A foreign national cannot acquire any immovable property by way of gift.
1. Foreign companies acquire any immovable property in India in accordance with RBI regulations, necessary for or incidental to carrying out the business activity by making payment by way of foreign inward remittance through normal banking channels. All applicable laws, rules, regulations or directions for the time being in force should be complied with and a declaration should be filed with the RBI in Form IPI within 90 days from the date of acquisition of property.
2. The property can be transferred by way of mortgage to an authorised dealer as a security for any borrowing.
3. Repatriation of sale proceeds however can take place only with RBI permission.
1. Can purchase and sell any immovable property in India other than agricultural land/farmhouse/plantation property with prior clearance from Ministry of External Affairs, Government of India.
2. RBI permission is not necessary.
3. Purchase should be made from inward remittance of foreign exchange.
1. NRIs/PIOs can transfer any immovable property (except agricultural land/plantation property/farm house) to any person resident in India or NRI or PIO (however a PIO has to obtain prior approval of RBI for transfer of immovable property to a PIO)
2. NRIs/PIO can transfer agricultural land/plantation property/farm house by way of gift or sale to a person resident in India who is a citizen of India.
3. Foreign nationals and companies can sell immovable property to person resident in India, NRI or PIO with prior approval of RBI.
1. NRIs/PIOs can gift any immovable property to a person resident in India or NRI or PIO
2. Foreign nationals can gift immovable property to a person resident in India or NRI or PIO with prior approval of RBI.
3. An agricultural land/plantation property/farm house may be gifted only to a person resident in India who is a citizen of India. However a foreign national needs prior approval of RBI.
1. An NRI / PIO can mortgage property to an authorised dealer / housing finance institution in India (without the approval of RBI) and a party abroad (with prior approval of RBI).
2. A foreign national can mortgage property only with prior approval of RBI
3. Foreign Companies have a general permission to mortgage the property with an authorised dealer in India.