NRI Corner

A person residing outside India who is a citizen of India or a person outside India who is of Indian origin is an NRI. The definition of the Person resident outside India is defined under section 2(w) of the Foreign Exchange Management Act, 1999 as “a person who is not resident in India”

A person shall be deemed to be a person, not resident in India in the following cases:-

  • When the person stays in India for less than or up to 182 days during the preceding financial year
  • When a person who has gone out of India or who stays outside India, in either case –
    1. For or on taking up employment outside India, or
    2. For carrying on outside India a business or vocation outside India, or
    3. For any other purpose, in such circumstances, as would indicate his intention to stay outside India for an uncertain period

The Definition Of ‘foreign citizen Of Indian Origin’ Is Defined Under Section 2 (B) Of Foreign Exchange Management (Borrowing And Lending In Rupees) Regulations, 2000 And Under Section 2 (Xii) Of Foreign Exchange Management (Deposit) Regulations, 2000 As Given Under:

  • Foreign citizen Of Indian Origin’ Means A Citizen Of Any Country Other Than Bangladesh Or Pakistan, If He at any time held an Indian passport; or
  • He or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)
  • The person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b)

Some of the factors to consider while purchasing a flat are: Locality i.e. transport, schools, hospitals, market, business district, entertainment centers, hotels, restaurants, pollution levels

  • Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area
  • Car parking space
  • Quality of construction
  • Reputation of the builder or seller
  • Sufficient water and electric supply, other utilities
  • Cost components: price, stamp duty, registration charges, transfer fees, monthly outgoings and society charges, costs of utilities
  • Potential for resale or renting out of the property
  • Any other distinguishing features or advantages of the property
  • Market Trends about prevalent rates of property in the vicinity and last known transactions.
  • Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by the seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property, as these details are required for registration of the sale. Previous encumbrances and loans, if any of the property must be cleared before completion of the purchase of the property. The title of the Vendor to the property must be clear and marketable.
  • Check for approved layout plan and approved building plan with a number of floors.
  • Clearance from Municipality, Electricity, Water, Pollution, Lift authorities.
  • Check the building bye-laws in that area to verify any issue with a setback, side setback, height, etc
  • Confirm transfer fees, stamp duty and registration charges to be paid on the purchase of the property as well as outgoings to be paid for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.

No. NRI’s do not require any permission to buy any immovable property in India other than agricultural / plantation property or a farmhouse.

The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from any nonresident accounts maintained with banks in India.

STEP 1: First you book a flat and apply for a housing loan

STEP 2: Bank sanctions your loan

STEP 3: Registration of the agreement

STEP 4: Your housing finance company/bank submits the claim of the subsidy to National Housing Bank/HUDCO

STEP 5: National Housing Bank transfers the amount to your bank

STEP 6: Bank deposits the subsidy to your loan account

STEP 7: Loan reduces to the extent of the subsidy received and the reduced EMI is set

NRI/PIOs can without restraint rent out their immovable property, whether purchased through an application of forex or otherwise, without seeking any consent from the RBI. The rental income being a current account transaction is repatriable outside India, only if a proper tax is paid or provided for.

  • The loan amount shall not exceed 85% of the cost of the housing unit.
  • Own contribution, which is the cost of housing unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India
  • Reimbursement of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India
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