Under the Foreign Exchange Management Act of 1999, Non Resident Indians are defined as follows:

Non Resident Indian means an individual being a citizen of India or a person of Indian origin (not being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan) who is not a "resident".

Explanation : A person is deemed to be of Indian origin if he/she or either of his/her parents or any of his/her grandparents were born in undivided India

No permission is required by non-resident Indian nationals to acquire immovable property in India.

No, Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad to purchase immovable property in India for their bonafide residential purpose.

Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of Non-resident ordinary account (NRO)/Non-resident external account (NRE)/Foreign Currency Non-resident account(FCNR).

No permission is required by non-resident Indian nationals to acquire immovable property in India.

They are required to file a declaration in form IPI 7 with the Central Office of The Reserve Bank of India at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

Yes. The Reserve Bank of India 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 of paid out of balances in NRE/FCNR accounts.

In respect of residential properties purchased on or after 26th May 1993, The Reserve Bank of India considers applications for repatriation of sale proceeds of up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non- resident rupee account of the owner of the property. The Reserve Bank of India also considers repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for acquisition of commercial properties.

Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or the date of payment of final instalment of consideration amount, whichever is later.

Application for necessary permission for remittance of sale proceeds should be made in Form IPI 8 to the Central Office of The Reserve Bank of India at Mumbai within 90 days of the sale of the property.

Yes. The Reserve Bank of India 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, subject to compliance with tax laws.

Yes. Under the general permission granted by the Reserve Bank of India properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser’s NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of the Reserve Bank of India in Form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after May 26, 1993 will be allowed to 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 of consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of the Reserve Bank of India within 90 days of the sale of property in Form IPI 8.

Yes.

Yes. The Reserve Bank of India has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income has to be credited to NRO account.

The Reserve Bank of India has granted general permission to certain financial institutions providing housing finance. HDFC, LIC Housing Finance Ltd., etc., to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions.

The Reserve Bank of India permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.

Yes. However, in such cases the payment of margin money and repayment of the loan instalments should be made by the NRI.

Yes, an NRI may appoint a Power of Attorney in India to represent him in dealings in India. The Power of Attorney should be executed as per drafts provided by the housing finance company. The Power of Attorney can be given to any person of his choice in India.

The RBI has granted general permission to NRI’s and foreign citizens of India origin, to let out their residential properties acquired for their bonafide residential purpose but which on account of their residence abroad, are not required for their immediate residential purpose. However, there are restrictions on the repatriation of the rental income earned from letting out of the property. The rental income is on a non-repatriation basis. Thus funds (rental income) must be credited to the NRO Account/Residential Accounts in India.

The income tax implications on house property income in India would be dependent on whether the property is kept vacant or let out. In case an NRI has only one property in India and if it is kept vacant, then it would be possible to say that there should not be any rental value for such property as the NRI was not able to occupy the same owing to his employment, business or profession carried out at any other place. However, if he owns two properties and both of them are kept vacant, then he is required to pay income tax on one of the properties as if the property had been let out.

The tax laws do not provide clear guidance on how the rental value is to be determined for such property. It simply states that the annual rent should be the sum which the property might reasonably be expected to let from year to year. Though there are judicial precedents that are available which suggest adoption of municipal value/ fair rent, there could be some practical difficulties in ascertaining such value in the ever increasing rental market.

In case of let out properties, the actual rental income (after reducing the municipal taxes) would be subject to tax. The tax law allows a general deduction of 30% on the rental income and also allows for deduction towards interest subject to certain conditions.

Under Indian tax law, the payer is required to withhold tax on rental income paid to a non-resident @ 30.6% where the income of the non-resident does not exceed Rs. 10, 00,000, otherwise at 33.66%. In case an NRI wishes to have a lower rate, then he has to apply to the tax authorities in a specified format for obtaining a certificate for deduction of tax at lower rate. The NRI would be required to file a return of income at the end of the year if the taxable income exceeds Rs 1, 00,000.

In case the NRI is taxed in the home country on the rental income derived from India, then he could consider claiming exemption or tax credit in the home country based on the double tax treaty agreement entered into India with such country, if any.