Important rules stipulated under FEMA 1999, for Indian citizens (Resident outside India) / persons of Indian origin resident outside India.

  • Permission from RBI

    • For Indian Citizens resident outside India :
  • An Indian citizen resident outside India does not require any permission for acquiring immovable property situated in India other than agricultural land / farm house / plantation property.
  • Similarly an Indian citizen does not require any prior permission of RBI for transferring any immovable property situated in India to a citizen of India who is resident in India.
  • An Indian citizen resident outside India can transfer without any prior permission from RBI any immovable property other than agricultural land / farm house / plantation property to an Indian citizen resident out side India or a person of Indian origin who is resident out side India

  • A person of Indian origin resident outside India does not require prior permission of RBI to:

    • Acquire any immovable property in India other than agricultural land / farm house / plantation property, by way of purchase or by way of gift from a person resident in India or from a person resident outside India, who is an Indian citizen or person of Indian origin.
    • Acquire any immovable property in India by way of inheritance from a person resident out side India who have acquired such property in accordance with the provision of the Foreign Exchange law enforced at the time of acquisition by him or the provision of these regulations (FEMA) of from a person resident in India.
    • Transfer any immovable property other than agricultural land / farm house / plantation property to a person resident in India by way of sale. Similarly, a person of Indian origin resident outside India can transfer agricultural land / farm house / plantation property in India by way of gift or sale to a resident in India who is a citizen of India.
    • Transfer residential or commercial property in India by way of gift to a person resident in India or outside India who is a citizen of India and a person of Indian origin resident outside India.

  • Methods of payment for purchase :

  • The purchase can be way of funds received as Inward Remittance through banking channels from any place outside India or out of funds held in any Non Resident accounts maintained in accordance with the provision of the act or the regulations made by RBI under the act.
    It will be noted here that if the property is acquired through funds held in NRO account although permission is not required for acquisition, the sale proceeds of such property cannot be repatriated outside India.

  • Repatriation of Sale proceeds outside India

    In the event of sale of immovable property other than agricultural land/farm/house/plantation property in India, Authorised Dealer may allow repatriation of sale proceeds outside india provided;

      1) 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 FEMA regulations

      2) 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 out of funds held in foreign Currency Non-Resident Account or (b) 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.

      3) In the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

      4) Authorised Dealers may allow to NRIs/PIOs the facility of repatriation of funds out of balances held in their Non-Resident Rupee (NRO) Accounts upto One million per calendar year, including sale proceeds of immovable property, subject to production of an undertaking by the remitter and a certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes (CBDT) (enclosed to A.P (DIR Series) Circular No.56 dated November 26,2002).

  • Formalities to be completed for Repatriation :

      Authorised dealers have been permitted to repatriate sale proceeds on behalf of NRI customers. For details please contact your banker / ADCB NRI center.

  • Renting out property :

    • The NRIs (Indian citizen resident outside India ) person of Indian origin can freely rent out the immovable property in India without prior permission from RBI. Rental income is freely repatriable outside India.

  • Important Provisions of FEMA for persons who are resident outside India / Certain foreign citizens :

    • A person resident outside India who has obtained permission of RBI for setting up of an office / branch or place of business in India (excluding liaison office) does not require prior permission of RBI to acquire immovable property in India which is incidentel or necessary undertaking the activity. However, the obligations such a person is required to fulfill is a declaration in form IPI to be submitted to RBI within 90 days of such an immovable property.
    • All persons who are citizen of Pakistan / Bangaladesh / Srilanka / Afgahishtan / China / Iran / Nepal / Buthan weather resident in India or outside India require prior permission of RBI for acquiring / transferring any immovable property in India.
    • For any persons resident outside India or foreign nationals intending to acquire agricultural land / farm house / plantation property will need to submit the request to The Chief General Manager, Reserve Bank of India, Exchange Control Dept., Foreign Investment Division (III), Central Office, Mumbai 400 001.

  • Prohibtion on acquisition or transfer of immovable property in India by citizens of certain countries.

    No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan shall acquire or transfer immovable propert in India, other than on lease, not exceeding five years, without prior permission of the Reserve Bank.


    Any further query on the subject can be addressed to us or to Reserve Bank of India, Exchange Control Dept. (Nearest Regional Office) or by e-mail : rbecfidt@bol.net.in or write to ADCB NRI CENTRE: adcbnri@vsnl.com

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