NRI/PIO Investment in Indian Properties: Simplified Rules
Many Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) seek to invest in both commercial and residential properties in India, often with the intention of renting them out for a steady income stream. This article delves into the rules and restrictions surrounding such purchases, addressing concerns about taxation, repatriation, and more.
Liberalized Regulations for NRIs
In recent years, the rules governing the purchase, rent, and sale of immovable property by Non-Resident Indians (NRIs) have been significantly simplified and liberalized.
Purchase of Property
- Eligibility: NRIs can purchase residential (e.g., apartments, houses) or commercial (e.g., shops, offices, godowns) properties without needing permission from the Reserve Bank of India (RBI).
- Restriction: NRIs cannot engage in real estate business activities.
- Property Limit: There is no restriction on the number or value of properties an NRI can buy.
Payment for Purchases
- Authorized Channels: Payments can be made via money remitted through banking channels or using funds from NRE / FCNR / NRO accounts.
Permissions and Exemptions
- RBI Permission: Not required for NRIs to buy property in India.
- Mortgaging Property: NRIs can mortgage the property to a bank or financial institution for a loan to fund the purchase.
- Stamp Duty/Registration Fee: No exemption available for NRIs.
- Permanent Account Number (PAN): Not mandatory for NRIs buying residential or commercial property.
Inheritance and Refund
- Inheriting Property: NRIs can inherit properties in India.
- Refund in Case of Failed Purchase: If payment was made from an NRE/FCNR account and the deal is canceled or no allotment is made, the refund amount can be repatriated by NRIs.