Nri buying residential land property
Querist :
Anonymous
(Querist) 17 January 2012
This query is : Resolved
I am a foreign national previously holding Indian passport- and am interested in buying property that has been converted from agricultural use to commercial/residential under Section 90B in Rajasthan. The land-approximately 3000 gaj-is located in a village. Am I able to buy this land and have it registered in my name?
Last year I was going to buy a residential plot-1000 gaj-in a large town, but the local authorities did not know if they would be able to register it in my name.
Thank you for your response.
A V Vishal
(Expert) 17 January 2012
No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. However, he / she can acquire or transfer immovable property in India, on lease, not exceeding five years. In such cases, there is no requirement of taking any permission of /or reporting to the Reserve Bank.
However, a foreign national who is a ‘person resident in India’ within the meaning of Section 2(v) of FEMA, 1999 can purchase immovable property in India,but the person concerned would have to obtain the approvals and fulfil the requirements, if any, prescribed by other authorities, such as, the State Government concerned, etc. The onus to prove his/her residential status is on the individual as per the extant FEMA provisions, if required by any authority. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank.
Deepak Nair
(Expert) 17 January 2012
Dear Mr.Vishal,
Thanks a lot for this update.
Dear Querist.
Hope you are satisfied now.
Rajeev Kumar
(Expert) 17 January 2012
Thanks for Mr.Vishal for update
Querist :
Anonymous
(Querist) 17 January 2012
Thank you for your reply. I am of Indian origin - born and studied in India and previously holding Indian passport. I want to buy residential property near Jaipur - in a village or town.
However, the local authorities do not know if I am able to register residential land in my name. Last year they refused to register a residential plot in my name. I did not have the time to probe further, but am wondering who would be able to tell these local authorities, that I am able to register residential property in my name.
A V Vishal
(Expert) 17 January 2012
You will have to file a suit to get the property registered
Raj Kumar Makkad
(Expert) 17 January 2012
Acquisition of immovable property in India by persons resident outside India (foreign national) is regulated in terms of section 6 (3) (i) of the Foreign Exchange Management Act (FEMA), 1999 as well as by the regulations contained in the Notification No. FEMA 21/2000-RB dated May 3, 2000, as amended from time to time. Section 2 (v) and Section 2 (w) of FEMA, 1999 defines `person resident in India' and a `person resident outside India', respectively. Person resident outside India is categorized as Non- Resident Indian (NRI) or a foreign national of Indian Origin (PIO) or a foreign national of non-Indian origin. The Reserve Bank does not determine the residential status. Under FEMA, residential status is determined by operation of law. The onus is on an individual to prove his / her residential status, if questioned by any authority.s
A person resident in India who is not a citizen of India is also covered by the relevant Notifications.
2. In terms of the provisions of Section 6(5) of FEMA 1999, a person resident outside India can 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 a resident in India or inherited from a person who was a resident in India.
3. The regulations under Notification No. FEMA 21/2000-RB dated May 3, 2000, as amended from time to time, permit a NRI or a PIO to acquire immovable property in India, other than agricultural land or, plantation property or farm house. Further, foreign companies who have been permitted to open a Branch or Project Office in India are also allowed to acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. Such dispensation is however not available to entities which are permitted to open liaison offices in India.
4. The restrictions on acquiring immovable property in India by a person resident outside India would not apply where the immovable property is proposed to be acquired by way of a lease for a period not exceeding 5 years or where a person is deemed to be resident in India.
In order to be deemed to be a person resident in India, from FEMA angle, the person would need to comply with the provisions of Section 2(v) of FEMA 1999. The Press Release dated February 1, 2009 issued by Government of India in this regard is enclosed as Annex.
Note: Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan cannot acquire or transfer immovable property in India, (other than on lease not exceeding five years) without the prior permission of the Reserve Bank.
5. NRIs/ PIOs are allowed to repatriate an amount up to USD one million, per financial year (April-March), out of the balances held in the Non-Resident (Ordinary) Rupee (NRO) account, subject to compliance with applicable tax requirements. This amount includes sale proceeds of assets acquired by way of inheritance or settlement.
6. The FAQs cover the following topics :
A. Acquisition of Immovable Property in India by a person resident outside India, i.e., by a NRI / PIO / foreign national of non-Indian origin by way of purchase / gift / inheritance.
B. Transfer of immovable property in India by a person resident outside India by way of
i) sale
ii) gift
iii) mortgage
C. Mode of payment for purchase of immovable property in India.
D. Repatriation of sale proceeds of residential / commercial property, in India, outside India acquired by NRI / PIO by way of
i) purchased
ii) gift
iii) inheritance
E. Provisions for Foreign Embassies / Diplomats / Consulates General
F. Other Aspects.
Querist :
Anonymous
(Querist) 19 January 2012
Dear Vishal and Makkad Sahib,
Thanks for your advice. One thing, what authority can I site so that the local officials-who are not aware of the law governing PIO's-are willing to register under my name?
All the best,
Brij
