Rules For NRI And PIO To Invest In India

Many NRIs and Persons of Indian Origin (PIO) want to invest in India, both commercial and residential properties. NRIs and PIOs also plan to buy such properties as an investment, and rent them out to earn a secure income stream.
This article talks about various rules and restrictions related to such purchases. It also clarifies the concerns about taxation (capital gains and income tax), repatriation, etc.
The rules regarding purchase, rent and sale of immovable property by Non Resident Indians (NRIs) have been thoroughly simplified and liberalized in recent years.
Let’s have a look at the current regulations for NRIs regarding purchase, renting out and sale of residential / commercial property.
Purchase of Property:-
A Non Resident Indian (NRI) can buy a residential (apartment, house, etc) or a commercial (shop, office, go down, etc) property (but not farm land or a farm house or a plantation) without seeking any permission from the Reserve Bank of India (RBI).
But the NRI can not participate in any business activity in real estate.
No. Of Properties:-
There is no restriction on the number (or value) of properties that can be bought by NRIs.
Payment for purchases:-
The payment can be made using money remitted through banking channels, or using the funds from the NRE / FCNR / NRO accounts.
Permission from the Reserve Bank of India (RBI):-
No permission is needed by NRIs to buy a property in India.
Mortgage property to a bank / financial institution:-
An NRI can mortgage the property to a bank / financial institution to take a loan for funding the purchase.
Stamp duty / registration fee exemption:-
No stamp duty / registration fee freedom is available to NRIs.
Permanent Account Number (PAN):-
A PAN number is not mandatory for NRIs buying residential or commercial property.
Inheritance of property in India:-
NRIs can inherit a property in India.
Purchase going wrong:-
If the payment is made from an NRE / FCNR account, and the deal is canceled or there is no allotment of property, the refund amount can be repatriated by NRIs.

One Comment

  1. Posted July 16, 2008 at 6:16 am | Permalink

    As many as 20 property developers from India are participating in an exhibition in Jeddah aimed at showcasing investment opportunities for NRIs living in Saudi Arabia, in the real estate sector of Kerala. The ongoing “India Homes Fair”, which is presenting more than 40 projects to expats working in the Kingdom expects to achieve sales worth Rs 400 million. Eight builders from Kochi are participating in the fair which has been organised by Housing Development Finance Corporation (HDFC).For more view- realtydigest.blogspot.com

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