Foreign Exchange Management Act,1999 under section 6(3)(i)grants permission to RBI to prohibit, restrict or regulate acquisition or transfer of immovable property in India, by a person resident outside India. RBI pursuant to powers conferred under sec.6(3)(i) has issued The Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations,2000. The said regulations doesn’t put any restrictions on the number of residential / commercial properties that can be purchased. The same has been confirmed in Q.4 of FAQ’s issued by RBI.
FAQ’s on Acquisition and Transfer of Immovable Property in India by a person resident outside India.
Q.1. Who can purchase immovable property in India?
Ans. Under the general permission available, the following categories can purchase immovable property in India:
i) Non-Resident Indian (NRI)
ii) Person of Indian Origin (PIO)
The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land / plantation property / farm house in India.
Q.2. Can NRI/PIO acquire agricultural land/ plantation property / farm house in India?
Q.3. Are any documents required to be filed with the Reserve Bank after the purchase?
Ans. No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank.
Q.4. How many residential / commercial properties can NRI / PIO purchase under the general permission?
Ans. There are no restrictions on the number of residential / commercial properties that can be purchased.
Q.5. Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?
Q.6. Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?
Ans. No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India unless such 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 five years. In such cases, there is no requirement of taking any permission of /or reporting to the Reserve Bank.
Q.7. Can a foreign national who is a person resident in India purchase immovable property in India?
Ans. Yes, a foreign national who is a ‘person resident in India’ within the meaning of Section 2(v) of FEMA, 1999 can purchase immovable property in India, but the person concerned would have to obtain the approvals and fulfill the requirements, if any, prescribed by other authorities, such as, the State Government concerned, etc. The onus to prove his/her residential status is on the individual as per the extant FEMA provisions, if required by any authority. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank.
However the RBI has put a restriction on repatriation of sale proceeds of number of house properties in India.
Q.22. Can NRI / PIO repatriate outside India the sale proceeds of immovable property held in India?
Ans. (a) In the event of sale of immovable property other than agricultural land / farm house / plantation property in India by a NRI / PIO, the Authorized Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely:
(i) the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations;
(ii) the amount to be repatriated does not exceed:
a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels, or
b) the amount paid out of funds held in Foreign Currency Non-Resident Account, or
c) the foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; and
(iii) in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
For this purpose, repatriation outside India means the buying or drawing of foreign exchange from an authorized dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorized dealer from which it can be converted in foreign currency.
It is pretty clear from the FAQ’s issued by RBI that there is no restriction on number of properties being held by NRI/PIO , however NRI/PIO can only remit sale proceeds of 2 house properties from India in a Single name. There is no bar in remitting sale proceeds of house properties held in different names.