Can NRI / PIO buy immovable property in India?- Everything you need to know.
Non Resident Indian (NRI) is a citizen of India, who stays abroad for employment under circumstances indicating an intention for an uncertain duration. On the other hand, a Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), is one who;
(a) at any time, held 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.
But the main confusion that arises is that whether they are allowed to buy immovable property or not?
Here is something to solve your confusion-
- Are these two categories allowed to purchase immovable property in India?
Under the general permission granted by RBI, they can freely purchase immovable property in India
2. Can a NRI/PIO acquire agricultural land/plantation property/farm house in India?
Since general permission is not available to NRI/PIO to acquire agricultural land/plantation property/farm house in India, such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India.
3. What basic documents are required by NRI/POI for Buying Property?
Here are the basic documents an overseas Indian would need when they’re trying to purchase commercial or residential property in India.
· Address proof
· OCI/PIO card (In case of OCI/PIO)
· PAN card (Permanent account number)
· Passport (In case of NRI)
· Passport size photographs
4. Do NRI/PIO have to file return in India for their property rental income and Capital Gains Tax?
The Government of India has granted general permission for NRI/PIO to buy property in India and they do not have to pay any taxes even while acquiring property in India. However, taxes have to be paid if they are selling this property. Rental income earned is taxable in India, and they will have to obtain a PAN and file return of income if they have rented this property. On sale of the property, the profit on sale shall be subject to capital gains.
5. What is meant by “Repatriation”? What is the law relating to Repatriation of Funds?
The term “repatriation” basically means the flow of capital from a foreign country to the country of origin. In this case, it is the foreign earnings that an overseas Indian has to transfer back to India in order to buy some property.
An NRI/PIO can purchase immovable (commercial & residential) property in India using their repatriable funds. But a major clause regarding the purchase is that none of the payments can be made in foreign currency.
Hope this proves to be useful..!!!
About the Author
This article has been authored by Ayushi Sharma, Founding Intern at LegalNow.
