NRI FAQ
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.
Who is a person of Indian Origin ?
For the purpose of availing
of the facilities of opening and maintenance
of bank accounts and investments in shares/securities
in India : A foreign citizen (other than a citizen
of Pakistan or Bangladesh is deemed to be of
Indian origin, if,
(i) he, At any time, held an Indian passport
(or)
(ii) he or either of his parents
or any of his grand parents was a citizen by
virtue of the constitution of India or citizenship
act, 1995 (57 of 1955).
Note:
A . Spouse (not being a
citizen of Pakistan or Bangladesh) of an Indian
origin is also treated as a person of Indian
origin for the above purposes.
B. For investments
in immovable properties:
A foreign citizen
other than a citizen of Pakistan, Bangladesh,
Sri Lanka or Nepal), Is deemed to be of Indian
origin if,
(i) he, At any time, held an Indian passport
(or)
(ii) he
or either of his parents or any of his grand parents
was a citizen by virtue of the constitution of
India or citizenship act, 1995 (57 of 1955).
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Q3. 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 at least 60%. |
Q4. 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. |
Q5.
What are the various facilities available to
NRIs/OCBs?
NRIs/OCBs are granted the followings
facilities: |
- Maintenance of bank accounts in India.
- Investments in securities / shares
of, and deposits with, Indian firms/companies.
- Investments in immovable properties in India.
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Q6. Do
non-resident Indian citizens require permission
of Reserve Bank to acquire residential/commercial
property in India?
No. |
Q7.
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. |
Q8.
In what manner the purchase consideration for
the residential immovable property should be paid
by foreign citizens of Indian 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.
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Q9.
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. |
Q10.
Can such property be sold without the permission
of Reserve Bank?
Yes. Reserve Bank has granted general permission for sale of such property. However,
where the property is purchased by another foreign citizen of Indian origin,
funds towards the purchase consideration should either be remitted to India or
paid out of balances in NRE/FCNR accounts. |
Q11.
Can sale proceeds of such property if and when
sold be remitted out of India?
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. |
Q12.
Are conditions required to be fulfilled if repatriation
of sale proceeds is 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. |
Q13.
What is the procedure for seeking such repatriation?
Applications for necessary permission for remittance
of sale proceeds should be made in form IPI 8
to the Central Office of Reserve Bank at Mumbai
within 90 days of the sale of the property |
Q14.
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. |
Q15.
Can foreign citizens of Indian origin acquire
commercial properties in India?
Yes. Under the general permission granted by Reserve
Bank properties other than agricultural land/farm
house/plantation property can be acquired by foreign
citizens of Indian origin provided the purchase
consideration is met either out of inward remittances
in foreign exchange through normal banking channels
or out of funds from the purchaser's NRE/FCNR
accounts maintained with banks in India and a
declaration is submitted to the Central Office
of Reserve Bank within a period of 90 days from
the date of purchase of the property / final payment
of purchase consideration. |
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