NRI FAQ’S

Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?

Yes, but the RBI has granted general permission to foreign citizens of Indian origin to purchase immovable property for their bonafide residential purpose. Therefore, a separate permission of RBI is not required.

From whom can the non-resident inherit immovable property?

An NRI can inherit immovable property from:
i) A person residing in India
ii) A person residing outside India
But the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange regulations applicable at that point of time.

What is the mode of payment for an NRI home loan?

The loan towards the house for the entire tenure has to be paid by the way of direct remittances through normal banking channels. The payments are done through NRO, NRE, FCNR accounts.

What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?

Ans:
Few formalities need to be carried out while purchasing a property. Firstly, an NRI is required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase. Along with this he/she must submit a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

Yes, the RBI has granted the foreign citizens of Indian origin the permission to acquire or dispose of the properties, but only up to two houses. He/she can gift a person who may be an Indian citizen or a person of Indian origin whether resident in India or not, provided gift tax has been paid.

What are the documents required for obtaining home loan?

An NRI who is seeking to purchase a property is required to submit following documents:

Employment/personal documents:
  • •  Employment contract
  • •  Passport along with latest visa stamp
  • •  Identity card
  • •  Latest salary slip
  • •  Overseas bank account statement for last six months
  • •  Proof of residence in India
  • •  Proof of residence in Abroad
  • •  Copy of appointment letter from the company employing the applicant

Property related documents:
  • •  Agreement papers of sale/construction
  • •  Receipts for payments
  • •  Allotment letter from the co-operative society
  • •  Latest tax paid receipt
What is the repayment period for an NRI home loan?

The period offered for a home loan is usually 5 years. But some of the financial institutions offer home loan for a period of 7 years which has to be paid through EMIs.

Can the properties be given on rent if not required for immediate use?

Yes, the RBI has granted permission for NRIs to give out their property on rent. But the rental income has to be credited to NRO account.

Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?

Yes, the RBI has given permission to few financial institutions to grant home loans to non residents for purchasing residential property for self occupation. Examples of such institutes are ICICI, HDFC, LIC Housing Finance, etc.

What is the eligibility for obtaining home loan?

The eligibility for NRI's obtaining home loan includes:
1) Age:

    a) The minimum age of the NRI applicant should be 21 years.
    b) If you are a salaried applicant, the maximum age allowed is 60 years.
    c) If you are a self employed person, the maximum age allowed is 65 years.

2) Qualification: The loan applicant should be a graduate.
3) Passport: The loan seeker should have a valid passport.
4) Payment terms: The NRI has to pay EMI through his NRE/NRO accounts.
5) Monthly income: The applicant should have a monthly income of $ 2000.

How many residential properties can an NRI purchase under the general permission?

An NRI has the right to purchase as many properties he wishes to buy. There are no such restrictions on the number of properties that can be purchased.

Can a person who had bought immovable property when he was a resident, continue to hold such property even
after becoming an NRI?

Yes, a person can hold such property after becoming an NRI and he/she need not take separate permission of the RBI.

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