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Who is a Non Resident Indian (NRI)?
Non Resident Indian (NRI) means a person who has gone out of India or who stays outside India, in either case for or on taking up employment outside India, or for carrying on outside India a business or vacation outside India, or for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period. Simply, it means a person resident outside India who is a citizen of India or is a Person of Indian Origin.
Who is a Person of Indian Origin (PIO)?
1. for the purposes of availing of the facilities of opening and maintenance of bank
accounts and investments in shares/securities in India,
Person of Indian Origin means any person:
a) who at any time, held an Indian passport; or
b) he/she or either of his/her parents or any of his /her grandparents was a citizen of
India by virtue of the Constitution of India or the Citizenship Act, 1955(57 of 1955)
or
c) The person is a spouse of an Indian citizen or a person referred to in clause (a) or (b)
above.
2. for investments in immovable properties;
Person of Indian Origin means an individual (not being a citizen of Pakistan or Bangladesh or Afghanistan or Bhutan or Sri Lanka or Nepal or China or Iran):
a) who at any time, held an Indian passport or
b) Who or either of whose father or whose grandfather was a citizen of India by virtue of
the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
What are the various facilities available to NRIs?
NRIs are granted the following facilities:
1. Maintenance of bank accounts in India.
2. Investment in securities/shares of, and deposits with Indian
firms/companies.
3. Investments in immovable properties in India.
Investment Opportunities
NRIs can invest in India as under:
1. Investment under Automatic Route with repatriation benefits
2. Investment with Government approval
3. Other investments with repatriation benefits
4. Investments upto 100% equity without repatriation benefits
5. Other investments by NRIs without repatriation benefits.
Investments in Real Estate
1. All persons, whether resident in India or outside India, who are citizens of
Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan,
require prior permission of Reserve Bank for acquiring or transferring any
immovable property in India.
2. A person resident outside India, who has been permitted by Reserve Bank to
establish a branch, or office, or place of business in India (excluding a Liaison
Office), has general permission of Reserve Bank to acquire immovable property
in India, which is necessary for, or incidental to, the activity. However, in such
cases a declaration, in prescribed form (IPI), is required to be filed with the
Reserve Bank, within 90 days of the acquisition of immovable property.
3. An Indian citizen resident outside India does not require any permission to
acquire any immovable property in India other than agricultural/plantation
property or a farm house.
4. An Indian citizen resident outside India does not require any permission to transfer any immovable property, to a citizen of India who is resident in India.
5. An Indian citizen resident outside India does not require any permission to
transfer any immovable property other than agricultural or plantation property or
farm house, to a person who:-
a) is a citizen of India resident outside India, or
b) is a person of Indian origin resident outside India
6. A person of Indian origin resident outside India does not require any permission
to acquire any immovable property other than agricultural land/farm
house/plantation property in India by purchase, from out of funds:
i) received in India by way of inward remittance through banking channel
from any place outside India, or
ii) held in any non-resident account maintained in accordance with the
provisions of the Act and the regulations made by the Reserve Bank under
the Act.
7. A person of Indian origin resident outside India does not require any permission
to acquire any immovable property in India other than agricultural land/farm
house/plantation property by way of gift from a person resident in India or from a
person resident outside India who is a citizen of India or from a person of India
origin resident outside India.
8. A person of Indian origin resident outside India does not require any permission
to acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property 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 or from a person resident in India.
9. A person of Indian origin resident outside India does not require any permission
to transfer any immovable property in India other than agricultural land/farm
house/plantation property, by way of sale to a person resident in India.
10. A person of Indian origin resident outside India does not require any permission
to transfer agricultural land/farm house/plantation property in India, by way of
gift or sale to a person resident in India who is a citizen of India.
11. A person of Indian origin resident outside India does not require any permission
to transfer residential or commercial property in India by way of gift to a person
resident in India or to person resident outside India who is a citizen of India or to
a person of India origin resident outside India.
12. Repatriation outside India, including credit to RFC, NRE or FCNR account, of
sale proceeds of any immovable property situated in India, requires prior
permission of the Reserve Bank except in circumstances stated in paragraph 13
below.
13. In the event of sale of immovable property, other than agricultural land/farm
house/plantation property in India by a person resident outside India, who is a
citizen of India, or a person of Indian origin, the Authorised Dealer may allow
repatriation of the sale proceeds outside India, provided all the following
conditions are satisfied:-
(i) the immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999;
(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 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; and
(iii) in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
14. All requests for acquisition of agricultural land/plantation/property/farm house by
any person resident outside India or foreign nationals may be made to the Chief
General Manager, Reserve Bank of India, Central Office, Foreign Exchange
Department, Foreign Investment Division , Mumbai - 400 001.
15 The NRIs/PIOs can freely rent out their immovable property in India without seeking any permission from the Reserve Bank. The rental income being a current account transaction is freely repatriable outside India.
Notes:
For the purposes of transactions, i.e., transfer, sale, purchase, etc., dealing with immovable property in India, a person of Indian origin is defined as under: "an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan),
i) who at any time, held Indian passport; or
ii) who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)."
Source: www.ksidc.org/NRI%20Ready%20Reckoner.pdf, DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION, Ministry of Commerce and Industry,Govt of India, March 2005
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