Purchase of Property by NRIs and PIOs
Posted on October 01 2020
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NRI - An Indian citizen who is residing in abroad is considered to be a Non-Resident Indian (NRI).
PIO - PIOs include most foreign nationals who hold an Indian passport at any time in the past; or the foreign national and whose parent or grandparent or great grandparent were born in and permanently residing in India; or the foreign national is a spouse of an Indian citizen or a PIO. To be considered as a PIO, the foreign national is required to register with the relevant Indian authorities and attain the PIO Card.
PIO Card holders are given the same benefits that are given to a NRI.
Person Resident in India - Under FEMA, a Resident Indian is defined as a person who is residing in India for more than 182 days during the course of the prior financial year (April-March) and who has come to India either to stay or to take up employment, carrying on business or vocation in India or for any other purpose which will indicate the intention to stay in India for an uncertain period. FEMA regulates the residential status by the operation of law and the liability is on an individual to prove the residential status, if any questioned arose by any authority.
Acquisition of Immovable Property in India: By the permission from the RBI, an NRI and a PIO can freely purchase immovable property in India i.e., residential and commercial property only. After special permission from the RBI, the foreign nationals i.e., NRIs and PIOs are not allowed to purchase agricultural land, plantation property and/or a farmhouse in India and the plan is considered in deliberation with the Government of India. Therefore, once the general permission is attained from the RBI then there is no restriction to the number of properties i.e., residential or commercial that an NRI or PIO can purchase.
A foreign national of non-Indian origin, resident outside India can neither purchase any immovable property in India, nor can such a person be a joint holder of immovable property purchased by an NRI or PIO. However, such a foreign national may take on lease residential accommodation without RBI permission provided the lease is for less than a five-year period. In addition, the foreign national residing in India may purchase a property after obtaining government approval and fulfilling other applicable requirements.
Inheritance and Gift of Property: Under general permission, the NRI and PIO can inherit and hold immovable property in India from a Resident Indian. Gift can be acquired by an NRI or a PIO (resident and commercial property) either from a Resident India, or an NRI or a PIO. A foreign national of non-Indian origin cannot acquire any immovable property while residing outside India but the NRIs and PIOs can inherit an immovable property from a Resident Indian. A person who is residing outside India cannot acquire agricultural land, plantation property or farm house in India by way of a gift.
Tax Assist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.
With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.
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