Non-Resident Indian (NRI) is a citizen of India, 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. Non-resident foreign citizens of Indian Origin are treated at par with Non-Resident Indians (NRIs).

Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (a) at any time, held an Indian passport, or (b) who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

(a) Any person of full age and capacity:

• Who is a citizen of another country, but was a citizen of India at the time of, or at any time after, the commencement of the constitution, or
• Who is a citizen of another country, but was eligible to become a citizen of India at the time of the commencement of the constitution, or
• Who is a citizen of another country, but belongs to a territory that became part of India after the 15th Day of August, 1947.
• Who is a child of such a citizen, or (b) A person, who is minor child of a person mentioned in clause
• Provided that no person, who is or had been a citizen of Pakistan, Bangladesh shall be eligible for registration as an Overseas Citizen of India.

Under the general permission granted by RBI, the following categories can freely purchase immovable property in India:
(a) Non-Resident Indian (NRI)- that is a citizen of India residing outside India
(b) Person of Indian Origin (PIO)- that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who

• at any time, held Indian passport or
• who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

No. General Permission is available to purchase only a residential/commercial property in India to a person resident outside India who is a citizen of India (NRI) and who is a Person of Indian Origin (PIO).

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. 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 transactions and bank certificate regarding the consideration paid.

Yes, Reserve Bank has granted general permission for sale of such property. However, whether 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 balance in NRE / FCNR accounts.

With respect to 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.

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. Applications for repatriation of sale proceeds will be considered, provided the sale takes place after three years from the date of final purchase deed from the date of payment of final instalment of consideration amount, whichever is later.

Yes. Reserve Bank has granted general permission to a foreign citizen 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.

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.

There is no restriction on the number of residential or commercial properties an NRI can own in India. However, the law restricts NRIs from purchasing any kind of agricultural land/ plantation property/ farm house in India.

Yes, under the general permission granted by the Reserve Bank, property other than agricultural land/farm house/plantation property can be acquired by NRIs 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 in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

The mere acquisition of property does not attract income tax. However, any income accruing from the ownership of it, in the form of rent (if it is let out)/annual value of the house (if is not let out and it is not the only residential property owned by that person in India) and/or capital gains (short term or long term) arising on the sale of this house or part thereof is taxable in the hands of the owner.

Yes. Long-term and short-term capital gains are taxable in the hands of non-residents.

In case of sale of an immovable property, the Double Tax Avoidance Agreement (DTAA) with most countries state that capital gains will be taxed in the country where the immovable property is situated. Hence, if an NRI owns immovable property in India, then he/she will be subject to pay tax in India on the capital gains which arise on the sale of the property. Similarly, letting of immovable property in India would be taxed in India under most tax treaties.

Under the general permission granted by RBI, the following categories can freely purchase immovable property in India:

1. Non-Resident Indian (NRI)- who is a citizen of India residing outside India
2. Person of Indian Origin (PIO)- who is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
   • At any time, held Indian passport or
   • Whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

Since general permission is not available to NRI / PIO to acquire agricultural land/plantation property/farm house in India, such proposals will require specific approval from the Reserve Bank and the proposals are considered in consultation with the Government of India.

The mere acquisition of property does not attract income tax. However, any income accruing from the ownership of it, in the form of rent (if it is let out)/annual value of the house (if is not let out and it is not the only residential property owned by that person in India) and/or capital gains (short term or long term) arising on the sale of this house or part thereof is taxable in the hands of the owner.

The Government of India has granted general permission to NRI / PIO / OCI to buy property in India and they do not have to pay any taxes even while acquiring the property in India. However, taxes have to be paid if they are selling this property. Rental income earned is taxable in India, and they will have to obtain a PAN and file a return of the income if they have rented this property. On sale of the property, the profit on sale shall be subject to capital gains. If they have held the property for less than or equal to 3 years after taking actual possession then the gains would be short term capital gains, which are to be included in their total income and will be taxed in the normal bracket. However, if the property has been held for more than 3 years, then the resulting gain would be labeled as long term capital gains subject to 20% tax and some additional levy (cess).

India has DTAAs with several countries which give a favorable tax treatment in respect of certain heads of income. However, in case of sale of immovable property, the DTAA with most countries provide that the capital gains will be taxed in the country where the immovable property is located. Hence, the non-resident will be subject to tax in India on the capital gains which arise on the sale of immovable property in India. Letting of immovable property in India would be taxed in India under most tax treaties in view of the fact that the property is in India.

Yes. Long-term and short-term capital gains are taxable in the hands of non-residents.

1. If the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels/by debit to NRE / FCNR(B) account, the amount to be repatriated should not exceed the amount paid for the property:

• In foreign exchange received through normal banking channel
• By debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR(B) account

1. If the property was acquired out of Rupee sources, NRI / PIO may remit an amount of up to USD One million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance. The NRI / PIO may use this facility to remit capital gains, where the acquisition of the subject property was made by funds sourced by remittance through normal banking channels/by debit to NRE / FCNR(B) account.
2. Is the rental income from property repatriable and what are the RBI rules?
3. The rental income, being a current account transaction, is repatriable, subject to the appropriate deduction of tax and the certification thereof by a Chartered Accountant in practice. Repatriation of sale proceeds is subject to certain conditions. The amount of repatriation cannot exceed the amount paid for acquisition of the immovable property in foreign exchange.

An authorized dealer or a housing finance institution in India approved by the National Housing Bank may provide housing loan to a non-resident Indian or a person of Indian Origin residing outside India for acquisition of a residential accommodation in India, subject to the following conditions, namely:

• The quantum of loans, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person residing in India.
• The loan amount shall not be credited to Non-Resident External (NRE)/Foreign Currency Non-Resident (FCNR)/Non-Resident non-Repatriable (NRNR) account of the borrower.
• The loan shall be fully secured by an equitable mortgage by deposit of title deal on the property proposed to be acquired, and if necessary, also be lien on the borrower’s other assets in India.
• The installment of loan, interest and other charges, if any, shall be paid by the borrower by remittances from outside India through normal banking channels or out of funds in his Non-Resident External (NRE)/Foreign Currency Non-Resident (FCNR)/Non-Resident Non-Repatriable (NRNR)/Non-Resident Ordinary (NRO)/non-Resident Special Rupee (NRSR) account in India, or out of rental income derived from renting out the property acquired by utilization of the loan or by any relative of the borrower in India by crediting the borrower’s loan account through the bank account of such relative (The word ‘relative’ means ‘relative’ as defined in section 6 of the Companies Act, 1956.)
• The rate of interest on the loan shall conform to the directives issued by the Reserve Bank of India or, by as the case may be, the National Housing Bank.

1. PAN card (Permanent account number)
2. OCI / PIO card (In case of OCI / PIO)
3. Passport (In case of NRI)
4. Passport size photographs
5. Address proof

Salaried individuals

• Copy of employment contract
• Latest Salary slip
• Latest work permit
• Bank statement for 4 months or NRE / NRO a/c 6 months statement
• Passport/visa copyUtility bill for address proof
• PIO / OCI card
• Power of Attorney (if applicable, in respective bank’s format)
• Customer credit check report
• Property agreement duly registered or other related docs
• Income Tax returns last 2 years

• Balance sheets and P&L a/c of the company for last 3 years
• Bank a/c statements for last 6 months for company and individual, both
• Income tax returns (3 years)
• Passport/visa copy
• Utility bill for address proof PIO / OCI card
• Power of Attorney (if applicable, in respective bank’s format)
• Credit check report
• Property agreement or other related docs

Yes, foreigners can purchase residential and commercial properties in India, although there are some restrictions. Foreign nationals of non-Indian ancestry who live in India can purchase property without the RBI's permission; however, those who live outside of India typically require RBI approval. However, there are limitations on purchasing agricultural land, plantation property, or farmhouses, with limited exceptions for inherited property.

Yes, a US citizen can usually buy properties in India, although there are some restrictions. People of Indian origin (PIO), including NRI (NRI) and US citizens, can buy housing and commercial assets in India under the Foreign Costs Act (FEMA) without obtaining special approval from the Reserve Bank of India (RBI). However, special withdrawal from RBI is required to buy agricultural land, plantation property, or a farmhouse.

Absolutely! Real estate can be an excellent investment option in India since it provides appreciation potential, rental income, tax advantages, and diversification.

Return on investment (ROI) assesses the profitability of a real estate venture by dividing total return by total investment expenses. The cost technique determines ROI by dividing investment gain by entire beginning expenditures, which include both the purchase price and any enhancements.