Q1. Who is a non-resident Indian (NRI)?
An Indian Citizen who stays abroad for employment / carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. organisation and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non- residents). Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens (NRIs).
Q2. What is an OCB?
Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident out side Indian and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of atleast 60% by individuals of Indian nationality or origin resident outside India as also overseas trust in which atleast 60% of the beneficial interest is irrevocably held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be atleast 60%.
Q3. Are OCBs required to produce any certificate regarding ownership/beneficial interest in them by NRIs?
Yes. In order to establish that the ownership/beneficial interest in any OCB held by NRIs is not less than 60%, the concerned body/trust is required to furnish a certificate from an overseas auditor / chartered / accountant /certified public accountant in form OAC where the ownership/beneficial interest is directly held by NRIs, and in form OAC 1 where it is held indirectly by NRIs and further that such ownership interest is actually held by them and not in the capacity as nominees.
Q4. What are the various facilities available to NRIs/OCBs?
NRIs/OCBs are granted the followings facilities:
1. Maintenance of bank accounts in India.
2. Investments in securities/shares of, and deposits with, Indian firms/companies.
3. Investments in immovable properties in India.
Details of these facilities are given in Chapters II,III and IV.
Q5. Do non-resident Indian citizens require permission of Reserve Bank to acquire Residential/commercial property in India?
No.
Q6. Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?
Yes. However, Reserve Bank has granted general permission to foreign citizens of Indian origin whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are therefore, not required to obtain separate permission of Reserve Bank.
Q7. In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of India origin 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 accounts maintained with banks in India.
Q8. What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?
They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
Q9. Can such property be sold without the permission of Reserve Bank?
In respect of residential properties purchased on or after 26th May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993, will have to be credited to the oridinary non-resident rupee account of the owner of the property.
Q10.Are conditions required to be fulfilled if repatriation of sale proceeds id desired?
Applications for repatriation of sale proceeds 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 instalment of consideration amount, whichever is later.
Q11.What is the procedure for seeking such repatriation?
Applications for necessary permission for remittance of sale proceeds should be made in from IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.
Q12.Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?
Yes. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two house by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, provided gift tax has been paid.
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