FEMA
This query is : Resolved
02 December 2009
I have the following queries on investment in residential property in India by a foreign national resident in India. I have visited RBI Bangalore office and they have directed me to mail these questions to central office.
Whether he can bring money from abroad (Italy) for buying the property? Is there any limit. Can he take soft loans from
his parents in Italy and bring the same to India to buy the property?
How many properties can he buy in India? Is there any limit
Whether he can invest in property jointly with his spouse who is an Indian resident
Is there any lock in period for selling the property by him?
How much money can he repatriate when he sell the property. Whether the entire money can be repatriated if he invest using money brought from abroad as well money earned in India as salary from his employment
I have the following queries on investment in residential property in India by a foreign national resident in India. I have visited RBI Bangalore office and they have directed me to mail these questions to central office.
Whether he can bring money from abroad (Italy) for buying the property? Is there any limit. Can he take soft loans from
his parents in Italy and bring the same to India to buy the property?
How many properties can he buy in India? Is there any limit
Whether he can invest in property jointly with his spouse who is an Indian resident
Is there any lock in period for selling the property by him?
How much money can he repatriate when he sell the property. Whether the entire money can be repatriated if he invest using money brought from abroad as well money earned in India as salary from his employment
02 December 2009
PL REPLY
24 July 2024
These are the queries related to investment in residential property in India by a foreign national who is a resident in India. It's important to note that these queries involve provisions under the Foreign Exchange Management Act (FEMA) and regulations issued by the Reserve Bank of India (RBI). Here are the responses based on the current FEMA regulations:
1. **Bringing Money from Abroad:**
- **Source of Funds:** Yes, a foreign national resident in India can bring money from abroad (in this case, Italy) to purchase residential property in India.
- **Limitations:** There is no specific limit mentioned by FEMA on the amount of funds that can be brought from abroad for property purchase. However, the transaction should comply with RBI guidelines, including documentation and reporting requirements.
2. **Taking Soft Loans from Parents:**
- **Soft Loans:** Yes, the individual can take soft loans (loans from family members without formal interest or with concessional interest rates) from parents in Italy and bring this money to India for property purchase.
- **Compliance:** Similar to direct remittance, loans should comply with FEMA regulations, and proper documentation and adherence to RBI guidelines are necessary.
3. **Number of Properties:**
- **Limitation:** There is no specific limit under FEMA on the number of residential properties a foreign national resident in India can purchase. However, the property purchase must be for residential purposes only.
4. **Investing Jointly with Indian Spouse:**
- **Joint Investment:** Yes, a foreign national can invest jointly in property with their Indian spouse who is a resident of India. This is permissible under FEMA regulations.
5. **Lock-in Period for Selling Property:**
- **No Lock-in Period:** There is no lock-in period specified under FEMA for selling residential property in India by a foreign national resident in India. They can sell the property as per their discretion.
6. **Repatriation of Sale Proceeds:**
- **Repatriation Rules:** The amount that can be repatriated abroad after selling property in India depends on several factors:
- If the property was purchased using funds brought from abroad (like from Italy), the entire amount of sale proceeds (after taxes and other deductions) can generally be repatriated.
- If the property was purchased using funds earned in India (such as salary from employment in India), repatriation of sale proceeds is subject to a cumulative limit of USD 1 million per financial year for all purposes under the Liberalized Remittance Scheme (LRS).
- **Documentation:** Proper documentation and compliance with RBI guidelines are crucial for repatriating funds abroad.
### Conclusion:
While these responses provide an overview based on current FEMA regulations, it's important to consult with RBI or a qualified financial advisor to ensure compliance with all applicable rules, including documentation requirements and any updates to regulations that may have occurred after this response. Regulatory requirements can change, and expert guidance will ensure that the property transactions are conducted in compliance with Indian laws.
1. **Bringing Money from Abroad:**
- **Source of Funds:** Yes, a foreign national resident in India can bring money from abroad (in this case, Italy) to purchase residential property in India.
- **Limitations:** There is no specific limit mentioned by FEMA on the amount of funds that can be brought from abroad for property purchase. However, the transaction should comply with RBI guidelines, including documentation and reporting requirements.
2. **Taking Soft Loans from Parents:**
- **Soft Loans:** Yes, the individual can take soft loans (loans from family members without formal interest or with concessional interest rates) from parents in Italy and bring this money to India for property purchase.
- **Compliance:** Similar to direct remittance, loans should comply with FEMA regulations, and proper documentation and adherence to RBI guidelines are necessary.
3. **Number of Properties:**
- **Limitation:** There is no specific limit under FEMA on the number of residential properties a foreign national resident in India can purchase. However, the property purchase must be for residential purposes only.
4. **Investing Jointly with Indian Spouse:**
- **Joint Investment:** Yes, a foreign national can invest jointly in property with their Indian spouse who is a resident of India. This is permissible under FEMA regulations.
5. **Lock-in Period for Selling Property:**
- **No Lock-in Period:** There is no lock-in period specified under FEMA for selling residential property in India by a foreign national resident in India. They can sell the property as per their discretion.
6. **Repatriation of Sale Proceeds:**
- **Repatriation Rules:** The amount that can be repatriated abroad after selling property in India depends on several factors:
- If the property was purchased using funds brought from abroad (like from Italy), the entire amount of sale proceeds (after taxes and other deductions) can generally be repatriated.
- If the property was purchased using funds earned in India (such as salary from employment in India), repatriation of sale proceeds is subject to a cumulative limit of USD 1 million per financial year for all purposes under the Liberalized Remittance Scheme (LRS).
- **Documentation:** Proper documentation and compliance with RBI guidelines are crucial for repatriating funds abroad.
### Conclusion:
While these responses provide an overview based on current FEMA regulations, it's important to consult with RBI or a qualified financial advisor to ensure compliance with all applicable rules, including documentation requirements and any updates to regulations that may have occurred after this response. Regulatory requirements can change, and expert guidance will ensure that the property transactions are conducted in compliance with Indian laws.
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