NRI FAQS
Are Foreign Nationals of Indian origin allowed to purchase immovable property in India?
Yes, foreign nationals of Indian origin, whether resident in India or abroad, have been granted general permission to purchase immovable property in India.
What should be the method of payment for purchasing residential immovable property in India by Foreign Nationals 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.
For Non-resident Indians staying abroad, can the property be purchased through an agent or through power of attorney?
Non-resident Indians who are staying abroad may enter into an agreement through their relatives and / or by executing the Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or Developer, drafting and signing of agreements, taking possessions, etc) These formalities can be completed through some known person who can be given the Power of Attorney for this purpose. Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be drafted on the stamp paper bought in India.
Who is liable to pay Stamp Duty-the buyer or the seller?
The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary.
In whose name are the stamps required to be purchased?
The stamps are required to be purchased in the name of any one of the executors to the Instrument.
What is meant by the market value of the property and is Stamp Duty payable on the market value of the property or on consideration as stated in the agreement?
Market value means the price at which a property could be bought in the open market on the date of execution of such an instrument. The Stamp Duty is payable on the agreement value of the property or the market value, which ever is higher.
What constitutes completion of the sale?
The transfer of a flat is completed when you have a sale deed / agreement for sale coupled with actual custody. Generally, in all cases the entire amount is paid simultaneously with the handing over of physical ownership and signing of the transfer documents.
Which properties are worth investing in?
Investments can be made in land and built-up residential, commercial (office /IT parks) and retail properties for shopping malls and markets.
How can I do it?
You need information on opportunities for real estate investments either through direct or indirect sources. These provide information on investment opportunities including invitations for investment opportunities from real estate developers on their properties, brokers or real estate agents in India as well as through a real estate portal.
What are all the important documents one should check before buying any property?
If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.
Are there any formalities to be completed by foreign nationals of Indian origin for purchasing residential immovable property in India?
They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Bombay within a period of 90 days from the date of purchase of Immovable property.
Can such residential property be given on rent if not required for immediate residential use?
Yes.
Can the rental income from such property be remitted outside India?
No. Such income cannot be remitted abroad and will have to be credited to the ordinary non-resident rupee account of the owner of the property.
A flat in a Co-op. Housing Society is to be gifted. What are the legal formalities? What about stamp duty?
Gift of an immovable property is considered as a 'transfer' under the provisions of the TOP Act and you have to have the transaction registered through a Gift Deed and pay stamp duty as per provisions of the relevant stamp act depending in which state the property is located.
What is Stamp Duty? What are the benefits of paying Stamp Duty?
Stamp Duty is a tax, similar to sales tax and income tax collected by the government, and must be paid in full and on time. A stamp duty paid instrument / document is considered a proper and legal instrument / document. It gets evidentiary value and is admitted.
Why is registration necessary?
Registration acts as a proof that a transaction has taken place. The registration of a document serves as a notice of the transaction to the persons affected by the transaction. It also serves as an implied notice to any person subsequently acquiring interest in the property, covered by the registered document.
When a document, which is to be compulsorily registered, is not registered, it fails to confer any title given by the document. The real purpose of registration is to ensure that every person dealing with property, for which compulsory registration is required, can confidently rely on the statement contained in the register as being a full and complete account of all transactions by which the title may be affected.
Is it worth investing in property in India? What are the returns?
It is always worth investing in property in India, as this investment produces assets which give capital appreciation of 20-40% each year and a net yield after tax of 10-15% per annum.
In comparison to other opportunities for investment in stock markets, bond markets, bank / saving deposits / instruments, gold and precious metals, real estate investments provide:
Carpet Area : This is the area of the apartment / building which does not include the area of the walls.
Built up Area: This includes the area of the walls also.
Super Built up Area: This includes the built up area along with the area under common spaces such as the lobby, lifts, stairs, etc. This term is therefore only applicable in the case of multi-dwelling units.
LOAN DETAILS
SANCTION DOCUMENTS FOR NRI CUSTOMERS (BUSINESS CLASS)
Are Foreign Nationals of Indian origin allowed to purchase immovable property in India?
Yes, foreign nationals of Indian origin, whether resident in India or abroad, have been granted general permission to purchase immovable property in India.
What should be the method of payment for purchasing residential immovable property in India by Foreign Nationals 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.
For Non-resident Indians staying abroad, can the property be purchased through an agent or through power of attorney?
Non-resident Indians who are staying abroad may enter into an agreement through their relatives and / or by executing the Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or Developer, drafting and signing of agreements, taking possessions, etc) These formalities can be completed through some known person who can be given the Power of Attorney for this purpose. Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be drafted on the stamp paper bought in India.
Who is liable to pay Stamp Duty-the buyer or the seller?
The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary.
In whose name are the stamps required to be purchased?
The stamps are required to be purchased in the name of any one of the executors to the Instrument.
What is meant by the market value of the property and is Stamp Duty payable on the market value of the property or on consideration as stated in the agreement?
Market value means the price at which a property could be bought in the open market on the date of execution of such an instrument. The Stamp Duty is payable on the agreement value of the property or the market value, which ever is higher.
What constitutes completion of the sale?
The transfer of a flat is completed when you have a sale deed / agreement for sale coupled with actual custody. Generally, in all cases the entire amount is paid simultaneously with the handing over of physical ownership and signing of the transfer documents.
Which properties are worth investing in?
Investments can be made in land and built-up residential, commercial (office /IT parks) and retail properties for shopping malls and markets.
How can I do it?
You need information on opportunities for real estate investments either through direct or indirect sources. These provide information on investment opportunities including invitations for investment opportunities from real estate developers on their properties, brokers or real estate agents in India as well as through a real estate portal.
What are all the important documents one should check before buying any property?
If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.
Are there any formalities to be completed by foreign nationals of Indian origin for purchasing residential immovable property in India?
They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Bombay within a period of 90 days from the date of purchase of Immovable property.
Can such residential property be given on rent if not required for immediate residential use?
Yes.
Can the rental income from such property be remitted outside India?
No. Such income cannot be remitted abroad and will have to be credited to the ordinary non-resident rupee account of the owner of the property.
A flat in a Co-op. Housing Society is to be gifted. What are the legal formalities? What about stamp duty?
Gift of an immovable property is considered as a 'transfer' under the provisions of the TOP Act and you have to have the transaction registered through a Gift Deed and pay stamp duty as per provisions of the relevant stamp act depending in which state the property is located.
What is Stamp Duty? What are the benefits of paying Stamp Duty?
Stamp Duty is a tax, similar to sales tax and income tax collected by the government, and must be paid in full and on time. A stamp duty paid instrument / document is considered a proper and legal instrument / document. It gets evidentiary value and is admitted.
Why is registration necessary?
Registration acts as a proof that a transaction has taken place. The registration of a document serves as a notice of the transaction to the persons affected by the transaction. It also serves as an implied notice to any person subsequently acquiring interest in the property, covered by the registered document.
When a document, which is to be compulsorily registered, is not registered, it fails to confer any title given by the document. The real purpose of registration is to ensure that every person dealing with property, for which compulsory registration is required, can confidently rely on the statement contained in the register as being a full and complete account of all transactions by which the title may be affected.
Is it worth investing in property in India? What are the returns?
It is always worth investing in property in India, as this investment produces assets which give capital appreciation of 20-40% each year and a net yield after tax of 10-15% per annum.
In comparison to other opportunities for investment in stock markets, bond markets, bank / saving deposits / instruments, gold and precious metals, real estate investments provide:
- Highest returns
- Low volatility
- Lower liquidity
- Lowest risk
Carpet Area : This is the area of the apartment / building which does not include the area of the walls.
Built up Area: This includes the area of the walls also.
Super Built up Area: This includes the built up area along with the area under common spaces such as the lobby, lifts, stairs, etc. This term is therefore only applicable in the case of multi-dwelling units.
LOAN DETAILS
SANCTION DOCUMENTS FOR NRI CUSTOMERS (BUSINESS CLASS)
- Application form
- Passport and visa copy
- Photograph - 3 nos
- MOU (Memorandum of Understanding)
- Audit Report (attested by CA)
- Current Account Statement for last 6 months
- Company Profile
- Personal Bank Statement for last 6 months (Overseas & NRE/NRO) processing fee cheque from NRE / NRO account in favour of Bank.
- Power of Attorney (if customer is not here you can execute power of attorney in Correspondent Bank format)If the Customer is in Gulf countries the Power of Attorney should be attested by the Consulate and the customer in USA and UK should be attested by the notary.
- The customer from UK or US need credit report.
- If any co-applicant, his photos and ID proof must be submitted.
- Application form
- Passport and visa copy
- Photograph - 3 no:s
- Salary certificate / Slip
- Work Permit / Job Contract 6 months bank statement with salary credit
- Processing fee cheque from NRE / NRO account in favour of Bank.
- Power of Attorney (if customer is not here you can execute power of attorney in Correspondent Bank format). If the Customer is in Gulf countries the Power of Attorney should attested by the Consulate and the customer in USA and UK it should be attested by the notary.
- The customer from UK or US need credit report.
- Application form
- PAN card copy or address proof
- Photograph - 3 nos
- Latest Salary certificate / Slip
- 6 months bank statement with salary credit
- One cheque leaf for processing fee