Q.1 Do non-resident Indian citizens require permission of Reserve Bank to acquire residential/commercial property in India?
Q.2 Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?
Ans. 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 permission of Reserve Bank.
Q.3 In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?
Ans. 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.
Q.4 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?
Ans. 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 alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
Q.5 Can such property be sold without the permission of Reserve Bank?
Ans. 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.
Q.6 Can sale proceeds of such property if and when sold be remitted out of India?
Ans. 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 ordinary non-resident rupee account of the owner of the property.
Q.7 Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?
Ans. 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.
Q.8 What is the procedure for seeking such repatriation?
Ans. 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.
Q.9 Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?
Ans. Yes. 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, subject to compliance with applicable tax laws.
Q.10 Can immovable property held in India, be transferred by way of gift to relatives/registered charitable trusts/organisations in India?
Ans. Yes. General permission has been granted by Reserve Bank to non-resident persons (foreign citizens) of Indian origin to transfer by way of gift immovable property held by them in India to relatives and charitable trusts/organisations subject to the condition that the provisions of any other law, including Foreign Contribution (Regulation) Act, 1976, as applicable, are duly complied with.
Q.11 Can foreign citizens of Indian origin acquire commercial properties in India?
Ans. 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 purchasers' NRE/FCNR accounts maintained with banks in India and a declaration is 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.
Q.12 Can they dispose of such properties?
Q.115 Can sale proceeds of such property be remitted out of India?
Ans. Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26th May 1993 will be allowed to 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, whichever 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.
Q.13 Can the properties (residential/commercial) be given on rent if not required for immediate use?
Ans. Yes. 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 for repatriation.
Q.14 Can NRIs obtain loans for acquisition of a house/flat for residential purpose from authorised dealers/financial institutions providing housing finance?
Ans. Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., 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. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the investors' NRE/FCNR/NRO accounts.
Q.15 Can Indian companies grant loans to their NRI staff?
Ans. Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions.
Q.16 Can authorised dealer grant housing loan to non-residents of Indian nationality where he is a 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?
Ans. Yes. However, in such cases the payment of margin money and repayment of the loan instalments should be made by the NRI borrower.
B. Resident Foreign Currency (RFC) Accounts Scheme
Q.17 What is the Resident Foreign Currency (RFC) Account Scheme?
Ans. This is a Scheme approved by Reserve Bank permitting persons of Indian nationality or origin, who have returned to India on or after 18th April 1992 for permanent settlement (Returning Indians), after being resident outside India for a continuous period of not less than one year to open foreign currency accounts with banks in India for holding funds brought by them to India. Persons who have returned to India before 18th April 1992 can also open RFC account if (a) they are holding foreign currency assets abroad with Reserve Bank's permission or (b) are in receipt of pension or other monetary benefits from their erstwhile employers abroad.
Q.18 Is any permission from Reserve Bank required for opening such accounts with authorised dealers?
Q.19 In which currencies can RFC accounts be maintained?
Ans. RFC accounts can be maintained in any convertible currency.
Q.20 What funds can be credited to RFC accounts of Returning Indians?
Ans. The entire amount of foreign exchange brought to India at the time of their return to India for permanent settlement as well as the balances standing to the credit of their NRE and FCNR accounts at the time of return can be credited to RFC accounts. However, the foreign exchange brought to India in the form of foreign currency notes/bank notes/travellers cheques should have been declared to Customs at the time of arrival on the Currency Declaration Form (CDF) if it exceeded U.S. $ 10,000 or its equivalent. In the case of foreign currency/bank notes, such a declaration on form CDF is compulsory if the amount exceeds U.S. $ 5,000 or its equivalent.
Q.21 Can income received from their overseas assets in the form of dividends etc., or sale proceeds of such assets be credited to RFC accounts?
Ans. Yes. The entire income from such assets or sale proceeds of such assets repatriated to India can be credited to RFC accounts.
Q.22 Can pension received by the account holder from abroad be credited to his RFC account?
Ans. Yes. The entire amount of pension received from abroad can be credited to his RFC account.
Q.23 NRIs returning to India for permanent settlement were granted RIFEE facility. Is this facility still available?
Ans. No. RIFEE facility has been replaced by the RFC accounts facility.
Q.24 Can funds in RFC accounts be remitted abroad?
Ans. Yes. Funds in RFC accounts can be remitted abroad for any bona fide purpose of the account holder or his dependents including exchange required for travel and other personal purposes and investments.
Q.25 Can funds in RFC accounts be utilised for local payments?
Ans. Yes. Funds in RFC accounts can be withdrawn freely for local payments.
Q.26 Can a Returning Indian desiring to go abroad again for employment, business or vocation transfer his funds in RFC account to NRE/FCNR account?
Q.27 Can persons who have returned to India after a short assignment of less than one year open RFC accounts?
Ans. Their applications for opening such accounts would be considered by Reserve Bank. Persons who have gone abroad for studies, training, etc. are, however, not eligible for this facility.
C. Import of gold/silver by NRIs
Q.28 Can NRIs bring gold into India?
Ans. Yes. NRIs can bring into India gold upto 10,000 grams as part of their baggage once in six months provided they have stayed abroad for a continuous period of six months.
Q.29 In what form can the gold be brought into India?
Ans. The gold may be brought into India in any form, including ornaments (other than ornaments studded with stones and pearls).
Q.30 Are NRIs required to pay customs duty on the gold brought by them into India?
Ans. Yes. They are required to pay customs duty in any convertible foreign currency at a rate equivalent to Rs.400/- per 10 grams of gold.
Q.31 How often can a NRI bring gold into India?
Ans. A NRI can bring gold into India once in six months.
Q.32 Is it necessary that the NRI should have stayed abroad at least for a minimum period of six months prior to his return to India for being eligible to bring gold?
Q.33 Can NRIs bring silver into India?
Ans. Yes. NRIs can bring to India silver upto 100 kilograms as part of their personal baggage.
Q.34 What is the rate of duty payable on such import?
Ans. The rate of duty on import of silver is Rs. 500 per kilogram which is payable in foreign currency.
Q.35 Can they bring both gold and silver?
Q.36 Can NRIs sell gold/silver imported by them to residents?
Ans. Yes. Gold/silver so brought by NRIs can be sold to residents against payment in rupees. Reserve Bank has granted general permission to persons resident in India to make payment to NRIs in Indian rupees by means of a crossed cheque in India and that such rupees are credited to Ordinary Non-resident Rupee (NRO) account of the NRI seller.