India is a multi-cultural and diversified land. Although India is a developing country in terms of Power, Finance, Defense, and others, it is largely focusing on building infrastructure to build and boost the economy. Many Indian homebuyers have purchased properties as per their requirements and budgets. However, many homebuyers live outside of India and keep an eye on properties in India. They are known as Non-Resident Indians (NRIs) and Overseas Citizens of India (OCI).
As per (Foreign Exchange Management Act) FEMA, NRI refers to a person resident outside India, who is a citizen of India, while OCI refers to a person resident outside India, who is registered as an overseas citizen of India cardholder under The Citizenship Act, 1955. There are several rules and regulations made for the homebuyers who reside outside of India and are NRIs and OCIs. The acquisitions and transfer of immovable properties in India by NRIs and OCIs are governed by Foreign Exchange Management Act, 1999 (FEMA) and regulated by the Reserve Bank of India (RBI).
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Below given are some of the important points that need to be considered for NRIs for property ownership in India:
1. NRIs and OCIs are not allowed to purchase or acquire by way of gift farmhouses, agricultural lands, and plantation property. However, NRIs and OCIs may acquire immovable property in India only through inheritance from a person who is a resident of India.
2. NRIs and OCIs are required to pay the taxes and duties levied by India out of funds received in India through banking channels in the NRE/NRO/FCNR account. However, NRIs and OCIs cannot make payment either by traveller’s cheque or by any foreign currency notes in any case.
3. No restriction on transfer of immovable property by NRIs and OCIs. However, repatriation of the proceeds of the sale will be subjected to certain restrictions.
4. There are many chances that NRIs and OCIs might face difficulty in managing properties and assets in India. For this, they may authorize a resident of India through a special Power of Attorney (POA). This limited special power is generally issued for the limited purpose of execution of sale documents and other matters.
Conclusion
There are many challenges when an NRI or OCI thinks of making the investment to purchase properties in India. However, Indian authorities have granted some of the rules and Acts, which are mandatory to follow, to go with the smooth process of managing properties and assets in India. It is advised to first read the documents or acts carefully and then make any decisions.
