RBI-DIRECTIVES

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The Reserve Bank of India (RBI) permits NRIs and PIOs to acquire immovable property in India other than agricultural property, plantation or a farmhouse. They can use funds received in India through normal banking channels by way of inward remittance from outside the country to pay the purchase consideration.

Home loan guidelines

  • The home loan amount should not exceed 85% of the cost of the dwelling unit; the remaining 15% needs to be own contribution towards the cost of unit financed.
  • The own contribution of 15% toward cost of the dwelling unit can be paid by direct overseas remittance/s through normal banking channels, or from Non-Resident (External) Account (NRE account) and /or Non-Resident (Ordinary) Account (NRO account) in India.
  • Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted to the housing finance compay from abroad through normal banking channels, the Non-Resident (External) Account (NRE account) and/or Non-Resident (Ordinary) Account (NRO account) in India. The loanrepayment has to be done in accordance with the provisions of the Foreign Exchange Management Act, 1999, and the regulations made by the RBI from time to time.

Guidelines for investment in properties in India

PERMISSION FOR PURCHASE OF RESIDENTIAL PROPERTY / COMMERCIAL PROPERTY.
  • NRIs holding Indian passports–Permission not required
  • NRIs holding foreign passports–RBI to be intimated(Form IPI –7) within 90 days of purchase of property or final payment of consideration
  • Funds to be remitted through NRE/NRO accounts
SALE OF PROPERTY
  • NRIs can sell properties they hold in India. RBI permission not required
REPATRIATION OF SALE PROCEEDS
  • Repatriation of sale proceeds of residential property purchased on or after 26th May 1993 is permitted
  • The RBI will consider repatriation of the sale proceeds in foreign exchange up to the amount paid for the acquisition of 2 properties. The sale has to take place after 3 years from the date of final purchase deed or from the date of final payment
  • Application for repatriation (IPI – 8) has to be made within 90 days of the sale of the property
INCOME FROM PROPERTY
  • NRIs can let out immovable property in India. The rental income has to be credited to an NRO account
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