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How can an NRI buy a property in India?

Posted by admin on December 29, 2022
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If you’re an NRI purchasing property in India, or even curious about the procedure for NRI to buy property in India, we have broken it down for you considering the current market trends and documentation processes.

The Requirements and Procedures required for an NRI to purchase property in India that will be covered are 

  • The various types of properties an NRI can purchase in India and Payment Methods.
  • The various documents required for an NRI to purchase property in India.
  • The RBI guidelines required for an NRI to purchase property in India.

NRIs, or Non Resident Indians and OCIs (overseas citizens of India) must follow the same NRI procedures to purchase property in India.

 1.Types of property and payment procedures

As stated by the FEMA (Foreign Exchange Management Acquisition and Transfer of Immovable Property in India) Regulations, NRIs are allowed to purchase property in India.

According to the RBI guidelines for NRI buying property in India, they can purchase commercial and residential property. The only properties an NRI cannot purchase are properties that have to do with agricultural practices, for example: plantations, agricultural land, or farmhouse properties. 

There is no bar on the number of properties NRI can purchase in the country. However, one must possess the capital amount to purchase the property in an NRI account, inclusive of inward remittances, or money received in your bank account from a foreign bank account.

Another great way to acquire NRI Property in India is that they can take a home loan from an Indian bank where it can be collected and repaid in Indian Rupees, which will be credited directly into the account of the seller/property developer. 

The monthly installments can be repaid through either an NRO (non-resident account) or an NRE account or even through FCNR deposits.

2.Documents required for an NRI to purchase property in India

The word “documents ” causes immediate confusion and hesitation in the Indian real estate market, but with this article it doesn’t have to. The various documents required for an NRI to purchase property in India are –

1.Passport/OCI card: NRIs must provide their Indian passport for property purchase India. If they possess a foreign passport, they must also provide their OCI/PIO card.

2.PAN card – Indian personal pan card which has been issued by the Government of India. 

3.Power Of Attorney: NRIs must provide a notarized power of attorney, in case they aren’t available in India for the purpose of executing the purchase transaction. Consider consulting a lawyer or trusted real estate developers to know more.

4.Documents required in case of availing a home loan:

a. Copy of Indian passport and visa / foreign passport and OCI/PIO card

b. Employment contract / appointment letter / work permit (of country of residence)

c. Latest salary certificate / Payslips (last 6 months)

d. Latest income tax returns

e. NRO/NRE accounts Bank Statements (last 1 year)

f. Bureau report of country of residence

g. Power of attorney.

5.Documents required for Sale Deed registration:

  1. Identity proof (passport/PAN card)
  2. Address proof (eg: utility bills)
  3. Passport size photographs

6.Essential papers:

  1. Title deed (in the specific seller’s name). It is important to note that different states may have different specifications for paperwork.
  2. Approved plan
  3. Building permit
  4. Occupation certificate (in the situation of a ready building)
  5. Older title deeds (if there are any)
  6. RERA registration 
  7. NOC from society
  8. Updated encumbrance certificate
  9. Share certificate (if in case of a cooperative housing society)

These are the main types of documents required for NRIs to buy property in india. Consider consulting your prospective real estate developer or a lawyer to explain these documents in detail.

3. RBI guidelines for an NRI buying Property in India

NRIs can purchase property in India according to the rules and regulations of the FEMA, which allows the RBI to frame rules to regulate the obtaining or transfer of immovable property and which does not include farmhouses/plantations/agricultural land in India.

The RBI guidelines for an NRI buying property in India as stated on the official RBI website is –

An NRI can transfer property to an Indian resident, an NRI or a PIO resident outside India. This means that these properties are considered to be a great source of investment for NRIs. They can also be used to purchase for future occupation.

Payment methods:

  1. Payment received in India through inward remittance or by debit to NRE / FCNR(B) / NRO accounts.
  2. Not through traveler’s cheque or by foreign currency notes (or by other modes except those specifically mentioned above) .

4. For Foreign Embassies/ Diplomats/ Consulate Generals

Foreign Embassy/ Diplomat/ Consulate Generals can also purchase property in India but require the following additional documents to acquire property in India –

  1. Clearance from the Ministry of External Affairs of the Government Of India 
  2. Proof of Payment done through funds from abroad.

5. Immovable property acquired by way of inheritance or out of Rupee funds

A Non-Resident Indian (NRI)/Person of Indian Origin (PIO) may remit an amount, not exceeding US $1,000,000 per financial year out of the balances held in:

  1. NRO/ sale proceeds of assets by way of purchase
  2. the assets in India acquired by him by way of inheritance 
  3. out of Rupee funds

This is subject to production of documentary evidence and tax clearances/no objection certificate from the Income Tax Authority for the remittance. Amounts exceeding 1 million USD require prior permission from the RBI.

In cases of deeds of settlements made by either the NRI’s parents or a close relative and the settlement taking effect on the death of the settler, the original deed of settlement and a tax clearance / No objection certificate from the Income-Tax Authority are required.

 6.Additional pointers to keep in mind

Based on the RBI guidelines for NRIs buying property in india, No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan without prior permission of the Reserve Bank shall acquire or transfer immovable property in India, other than lease, not exceeding five years.

Foreign nationals of non-Indian origin residing outside India cannot purchase property in India except by inheritance from an Indian resident. However, they can acquire or transfer property in India, on lease, not exceeding five years without the prior permission of the Reserve Bank.

Pavani Group has always been considered one of the best choices by NRIs to purchase property. With seamless purchase processes and customizable consultations, Pavani Group is considered to be one of the best developers in the Real Estate Industry in India.

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