NRI often have confusion over the tax related issues and provisions in respect of immovable properties. They have various queries regarding housing structure, transfer of immovable properties in India and other related aspects. Acquisition and transfer of properties or other assets are a major concern for NRI’s as they are not aware about the taxability structure or other legal compliances in this respect.

In order to reduce the burden of NRI in respect of transfer or acquisition of immovable properties in India, Tax Mantra has tries to provide details in respect of House Properties. Various facts have been provided in this respect to provide relief to the NRI’s in all these matters.

Some common facts relating to acquisition and transfer of Immovable Properties are as under:

Person entitled to purchase immovable property in India:

The following category of persons can purchase immovable property in India –

• Non- Resident Indian – NRI
  
• Person of Indian Origin – PIO

These categories of persons are entitled to purchase only residential or commercial property and are not available for purchase of agricultural land/ plantation property/ farm house in India.

No documents required

The NRI or POI who are purchasing any residential or commercial property in India under general permission are not required to file any documents/ reports with the Reserve Bank of India (RBI).

Restriction on the no. of properties held by NRI

No restrictions have been imposed on the no. of commercial or residential properties to be purchased by NRI’s/ PIO. Under the general permission a NRI/ PIO can purchase as many properties as he wishes to.

A foreign national of Non – Indian resident outside India cannot purchase immovable property in India

A foreign national of Non – Indian origin, resident outside India cannot purchase any immovable property in India unless the property is acquired by way of inheritance from a person who was resident in India. However, he/she can acquire or transfer immovable property in India, on lease, not exceeding 5 years. In such situation permission is not required to be taken from RBI.

A foreign national who is a person resident in India can purchase property in India

The foreign national who is a person resident in India can purchase immovable property in India, but the person concerned should obtain the approvals and also fulfill the requirements, if any, prescribed by other authorities such as State Government etc. The responsibility of proving his residential status is on the individual as per the extant FEMA provisions, if required by any authority.

Exceptions – A foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Nepal, Iran and Bhutan are required to obtain prior approval of the Reserve Bank of India (RBI) for purchasing property in India.