Investors FAQ

An Indian citizen 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.

(Persons posted in U.N. organisations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian origin are treated on par with non- resident Indian citizens (NRIs).

A person of Indian origin means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who:

• held an Indian Passport at any time, or
• PIO (Person of Indian Origin)

The Reserve Bank of India (RBI) has granted general permission to NRIs, PIOs and foreign citizens to invest in real estate for their residential purpose. The general permission covers only residential and commercial property.

NRIs can purchase commercial, as well as residential property in India (except for agricultural land, farm house & plantation property) 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.

In this case, a declaration has to be 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.

The payment of the purchase should be made out of the funds received in India through the financial options made available by the Indian. In case the funds are held in a non-resident account, that account should be maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank.

Yes, NRIs can sell their residential/commercial property without the permission of RBI. If the property is purchased by another PIO, funds towards the purchase consideration have to be remitted to India or paid out of balances in NRE/FCNR accounts.

As per the general permission granted by RBI, NRIs are allowed to receive financial assistance in the form of housing finance from certain financial institutions namely, HDFC, LIC Housing Finance, IDBI etc. Housing loans can be availed in rupees. Even though the criteria regarding the purpose of the loan are at par with those applicable to the resident citizens, the repayment period of the loan should not exceed 15 years.

Yes. The housing loan of an NRI or a PIO can be repaid by his/her close Indian relatives.

NRIs have different eligibility criteria in order to get home loans in India. A copy of the passport, copy of work contract is a must. Having a power of attorney (POA) may not be obligatory but it is nevertheless very important as the financial institute would want a representative since the borrower is not based in India. Here is a general list of documents needed for NRIs to obtain home loans:

• Passport & Visa
• Appointment letter and contract from the employing company
• Bank statement for the last six month.
• Labour card/identity card.
• More documents may be needed depending upon the requirements of different banks.

The following individuals (except from Pakistan and Bangladesh) are eligible to apply under OCI scheme:

• Who is a citizen of another country, but was a citizen of India at the time of or 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 belonged to a territory that became part of India after the 15th day of August, 1947; or
• Who is a child or a grand-child or a great grandchild of such a citizen; or
• (b) A person, who is minor child of a person mentioned in clause (a); or(c) A person, who is a minor child, and whose parents are citizens of India or one of the parents is a citizen of India; or(d) Spouse of foreign origin of a citizen of India or spouse of foreign origin of an Overseas Citizen of India Cardholder registered under section 7A, Citizenship Act 1955, and whose marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the presentation of the application under this section.
• Provided that no person, who is or had been a citizen of Pakistan, Bangladesh or such other country as the Central Government may by notification in the Official Gazette, specify shall be eligible for the registration as Overseas Citizen of India Cardholder.

NRIs/OCB’s are granted the following facilities:

• Maintenance of bank accounts in India
• Investments in securities / shares of, and deposits with, Indian firms / companies
• Investments in immovable properties in India

Yes, the Reserve Bank has granted general permission to NRIs to acquire or dispose of NRI India Properties by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin (PIO) whether resident in India or not.

Under the general permission available, the following categories can freely purchase immovable property in India:

• Non-Resident Indian (NRI) – that is a citizen of India resident outside India
• 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 grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).The general permission, however, covers only purchase of residential and commercial property.

NRIs/OCB’s are granted the following facilities:

• Maintenance of bank accounts in India
• Investments in securities/shares of, and deposits with, Indian firms/companies
• Investments in immovable properties in India