Do non-resident Indian citizens
require permission of The Reserve Bank to acquire residential/commercial
No. All Indian citizens are entitled to buy property in India,
irrespective of their residential status.
Do foreign citizens of Indian origin require permission of
the Reserve Bank to purchase immovable property in India
for their residential use?
Yes. However, the RBI 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 The Reserve Bank.
Who is a foreign citizen of Indian Origin?
A foreign citizen is deemed to be of Indian Origin if : i)
he held an Indian Passport at any time or ii) he or his father
or paternal grand father was a citizen of India by virtue
of the Constitution of India or the Citizenship Act, 1955.
However this does not apply to citizens of Pakistan, Bangladesh,
Afghanistan, Bhutan, Sri Lanka or Nepal.
How should the purchase of residential immovable property
be paid for by foreign citizens of Indian origin under
the general permission?
The purchase consideration should be met either out of inward
remittance in foreign exchange through normal banking channels,
or out of funds from NRE/FCNR accounts maintained with banks
What formalities have to be completed by foreign citizens
of Indian origin to purchase 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 documentary evidence for the transaction and
bank certificate for the money paid.
Can such property be sold without the permission of the
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.
Can sale proceeds of such property (if and when sold)
be remitted out of India?
For residential properties purchased on or after 26 May 1993,
the Reserve Bank considers applications for repatriation
of sale proceeds. Approval is usually granted for up to the
consideration amount remitted in foreign exchange in acquiring
the property for a maximum of two such properties. The balance
amount of sale proceeds, if any, or sale proceeds for properties
purchased prior to 26 May 1993, will have to be credited
to the ordinary non-resident rupee account of the owner of
Are any 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 the consideration amount, whichever is
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 The Reserve Bank at Mumbai within 90 days of the sale
of the property.
Can foreign citizens of Indian origin acquire or dispose
residential property by way of a gift?
The Reserve Bank has granted general permission to foreign
citizens of Indian origin to acquire or dispose of properties
up to two houses 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.
Can immoveable property held in India be transferred
by way of gift to in India?
General permission has been granted by Reserve Bank to non-resident
persons (foreign citizen) of Indian Origin to transfer, by
way of gift, immoveable property held by them in India to
relatives and charitable trusts / organisations subject to
the condition that the provisions of all other laws, as applicable
are complied with
Can foreign citizens of Indian origin acquire commercial
properties in India?
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. A declaration has to be submitted
to the Central Office of Reserve Bank in form IPI 7 within
a period of 90 days from the date of purchase of the property/final
payment of purchase consideration.
Can they dispose of such properties?
Can sale proceeds of such property be remitted out of
Yes. Repatriation of original investment in respect of properties
purchased by foreign citizens of Indian origin on or after
26 May 1993 can be remitted up to the consideration amount
originally remitted from abroad provided the property is
sold after a period of three years from the date of the final
purchase deed or from the date of payment of final instalment
of consideration amount, which ever is later. Applications
for the purpose are required to be made to the Central Office
of Reserve Bank within 90 days of the sale of property in
form IPI 8.
Can the properties (residential/commercial) be given on
rent if not required for immediate use?
The Reserve Bank has granted general permission for letting
out any immovable property in India. The rental income
or proceeds of any investment of such income are eligible
Can NRIs obtain loans for acquisition of a house/flat for
residential purpose from financial institutions providing
The Reserve Bank has granted general permission to certain
financial institutions providing housing finance e.g. HDFC
and authorised dealers to grant housing loans to non-resident
Indian nationals for acquisition of a house/flat for self-occupation,
subject to certain conditions. Criteria regarding the purpose
of the loan, margin money and the quantum of loan will be
at par with those applicable to resident Indians. Repayment
of the loan should be made within a period not exceeding
15 years, out of inward remittance through banking channels
or out of funds held in the investors' NRE/FCNR/NRO accounts.
Can Indian companies grant loans to their NRI staff?
The Reserve Bank permits Indian firms to grant housing loans
to their employees deputed abroad and holding Indian passport
subject to certain conditions.
Can an authorised dealer grant a housing loan to non-residents
of Indian nationality where the NRI is the principal borrower
with his resident close relative as a co-obligant / guarantor
or where the land is owned jointly by such NRI borrower
with his resident close relative?
Yes. However in such cases the payment of margin money and
repayment of loan instalments should be made by the NRI borrower.
Disclaimer : The purpose of this FAQ is to provide the
visitors a general understanding on the various issues
relating to House Property. The above FAQ been prepared
on the basis of advice received and may vary from person
to person, based on facts of such case. Reasonable efforts
have been taken in collecting, preparing and providing
quality information, but we do not warrant or guarantee
the accuracy, completeness, adequacy or currency of the
information. The contents of the FAQ are subject to changes
/ amendments made by the CBDT / Finance Ministry.