According to I.T. Act | FERA Act

An Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. Organisations and Officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents). Foreign citizens of Indian Origin are treated on par with non-resident Indian Citizens (NRIs) for the purpose of certain facilities.

Main categories of NRIs

The following are the main three categories of NRIs:-

• Indian citizens who stay abroad for employment or for carrying on a business or Vocation or any other purpose in circumstances indicating an indefinite period of stay abroad.
• Indian citizens working abroad on assignment with foreign government agencies like United Nations Organization (UNO), including its affiliates, International Monetary Fund (IMF), World Bank etc.
• Officials of Central and State Government and Public Sector undertaking deputed abroad on temporary assignments or posted to their offices, including Indian diplomat missions, abroad.

"Persons of Indian Origin" means a foreign citizen (not being a citizen of Pakistan, Bangladesh and other countries as may be specified by the Central Government from time to time) if,

• He/she at any time held an Indian passport; or
• He/she or either of his/her parents or grand parents or great grand parents was born in and permanently resident in India as defined in the Government of India Act, 1935 and other territories that became part of India, thereafter provided neither was at any time a citizen of any of the aforesaid countries {as referred to in 2(b) above}; or
• He/she is a spouse of a citizen of India or a person of Indian origin covered under (I) or (ii) above

NRIs are granted the followings facilities:

• Maintenance of bank accounts in India.
• Investments in securities/shares of, and deposits with, Indian firms/companies.
• Investments in immovable properties in India.

No. An NRI does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse.

They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank 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. Reserve Bank has granted general permission for sale of such property. However, where another foreign citizen of Indian origin purchases the property, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.

Yes. Under the general permission granted by Reserve Bank 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 Reserve Bank in from IPI 7 within period of 90 days from the date of purchase of the property/final payment of purchase consideration.

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

Yes. The following are the formalities or forms to be filled/filed:

• This differs from State to State, where the Property is situated. Every State has its set of forms under the Registration Rules that are required to be filled in and filed along with and at the time of Registration of Sale Deed/Transfer Deed.
• Under the provisions of the Income Tax Act and Rules for a transaction of sale, it is compulsory for the Purchaser and Seller to give their Permanent Account Number and the Seller and/ or the Purchaser would be required to fill Form 60 according to the Income-Tax Rules.
• In case of either the Purchaser or the Seller being a Non-Resident Indian, not assessed to tax in India, such a Party would be required to file Form 60 as per Income-Tax Rules.

Yes. Stamp Duty is payable on Sale Deed or transfer documents and the amount varies from State to State. The State may also collect levies/cess, apart from the Stamp Duty.

Yes. Value exceeding Rs. 100/- on any Sale/Transfer documents of immovable property, registration is mandatory and documents should be registered in the jurisdictional office of the Registrar of Assurances or Sub-Registrar as may be provided by the Registration Rules of the State.

Yes. GOI in general 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.

If the stamp duty is not paid on time it attracts penalty at the rate of 2% per month of the stamp duty. Penalty cannot exceed twice the amount of the stamp duty that has to be paid according to Govt. rules and regulations prevailing as on the date.

A purchaser must take following precautions while purchasing a property:

• Examine title of the property by investigating the source from which the seller acquired the property. This search can be conducted at the sub-registrar’s office. It is advisable to investigate the title for the past thirty years or up to the original owner whichever is later. These are called "link documents". Latest tax receipts.
• An EC from the Registrar for 13 years.
• One must check if the appropriate stamp duty has been paid on all these documents.
• If the property is situated in a cooperative society the original share certificate should be examined.
• All documents examined, should be original to ensure that the seller has a clear title and that there are no encumbrances on the property such as lien or mortgage or any other charge. Non-availability of any original document should be taken seriously.
• If the flat is in a co-operative society, it is advisable to get a No-Objection Certificate even though it is no longer mandatory. By way of the NOC it will be clear if any dues of the society are pending and the purchaser can avoid future problems.
• It is also advisable to see the latest society bill and the latest electricity bill.
• The cost of land is increasing on a year-to-year basis & the market value is being taken into consideration by the govt. besides the occasional increase in govt. stamp duty & also registration fee.