A non-resident Indian or NRI can purchase certain property types, while other property types will require special permission, under the guidelines of Reserve Bank of India or RBI. As an NRI it is important you are aware of various legal process and provisions that are related to purchase or owning an immovable property in India, under the Foreign Exchange Management Act (FEMA). NRI property investment is not easy as it seems to be. However, it is not that difficult once you get your base right.
Types of Properties an NRI Can Invest In
According to the circular passed by the Reserve Bank of India, RBI, an NRI can purchase any commercial or residential property in India. For the same, it is important for the NRI to seek any special permission or is required to send any intimation in this regard to the RBI. As per the existing permissions, an NRI can purchase end number of commercial or residential properties in India. Besides, even the income tax laws allow NRI to own and invest in any number of properties – residential and commercial. In case, an NRI is not able to come to India, the documents relating to the property can be executed by any person, only if given a valid power of attorney. Under the general permission of RBI, an NRI cannot purchase or invest in plantation property or agricultural land in India. Apart from this, an NRI cannot purchase farmhouses too. Hence, an NRI who wants to invest in a farmhouse or plantation, he/she is required to approach RBI for special permission.
Joint Ownership
A Non-Resident Indian can buy the property, either jointly or as a single owner. However, a resident Indian who is not allowed to invest in a property cannot be a joint holder for a property with an NRI. No matter what the contribution the second holder has in the purchase of the property.
Continuance of Ownership of Property, After Being An NRI
You are bound to wonder what will a person who already owns properties in India, becomes an NRI. Well, this person can continue to hold the property under his/her name. An NRI is allowed to continue to own agricultural land, farmhouse, or any plantation property that he earlier owned before becoming an NRI, which is otherwise not allowed after becoming an NRI. Besides, an NRI is also allowed to gift or sell an immovable property to any person who is the resident of India.