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An Indian Citizen who stays abroad for employment/
carrying on business or vacation 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. organizations and officials deputed abroad by Central/
State Government and Public Sector Undertakings on temporary
assignments are also treated as non-resident) Non-resident
foreign citizens of Indian Origin are treated on par with
non-resident Indian citizens.
A foreign citizen (other than a citizen of Pakistan, Bangladesh,
Afghanistan, Bhutan, Sri lanka or Nepal), is deemed to be
of Indian origin if,
(i) he held an Indian passport at any time, OR
(ii) he or his father or paternal grand-father was a citizen
of India by virtue of the Constitution of India or the Citizenship
Act, 1955 ( 57 of 1955).
All Indian citizens are entitled to buy property in India,
irrespective of their residential status.
However, the RBI has granted general permission to foreign
citizens of Indian origin, whether resident in India or abroad,
to purchase immovable property in India for their bona fide
residential purpose. They are, therefore, not required to
obtain separate permission of The Reserve Bank.
Reserve Bank has granted general permission for sale of such
property. However, where the property is purchased by another
foreign citizen of Indian origin, funds towards the purchase
consideration should either be remitted to India or paid out
of balances in NRE/FCNR accounts.
For residential properties purchased on or after 26 May 1993,
the Reserve Bank considers applications for repatriation of
sale proceeds. Approval is usually granted for up to the consideration
amount remitted in foreign exchange in acquiring the property
for a maximum of two such properties. The balance amount of
sale proceeds, if any, or sale proceeds for properties purchased
prior to 26 May 1993, will have to be credited to the ordinary
non-resident rupee account of the owner of the property.
Applications for repatriation of sale proceeds are considered
provided the sale takes place after three years from the date
of final purchase deed or from the date of payment of final
instalment of the consideration amount, whichever is later.
Applications for necessary permission for remittance of sale
proceeds should be made in form IPI 8 to the Central Office
of The Reserve Bank at Mumbai within 90 days of the sale of
the property.
The Reserve Bank has granted general permission to foreign
citizens of Indian origin to acquire or dispose of properties
up to two houses by way of gift from or to a relative who
may be an Indian citizen or a person of Indian origin, whether
resident in India or not, provided gift tax has been paid.
Repatriation of original investment in respect of properties
purchased by foreign citizens of Indian origin on or after
26 May 1993 can be remitted up to the consideration amount
originally remitted from abroad provided the property is sold
after a period of three years from the date of the final purchase
deed or from the date of payment of final instalment of consideration
amount, which ever is later. Applications for the purpose
are required to be made to the Central Office of Reserve Bank
within 90 days of the sale of property in form IPI 8.
The Reserve Bank has granted general permission to certain
financial institutions providing housing finance e.g. HDFC
and authorised dealers to grant housing loans to non-resident
Indian nationals for acquisition of a house/flat for self-occupation,
subject to certain conditions. Criteria regarding the purpose
of the loan, margin money and the quantum of loan will be
at par with those applicable to resident Indians. Repayment
of the loan should be made within a period not exceeding 15
years, out of inward remittance through banking channels or
out of funds held in the investors' NRE/FCNR/NRO accounts.
The Reserve Bank permits Indian firms to grant housing loans
to their employees deputed abroad and holding Indian passport
subject to certain conditions.
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