Persons who are not citizens of India (whether resident in India or not) and companies (other than banking companies) which are not incorporated under any law in force in India are required to obtain prior permission of Reserve Bank to acquire, hold, transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise any immovable property situated in India. The work relating to the permission for acquisition, etc of immovable property is centralized in the Central Office of Reserve Bank (Foreign Investment Division) at Mumbai.

However, the above restrictions do not apply to immovable property taken or given on lease for a period not exceeding five years.

Prior permission of Reserve Bank is necessary for acquisition, disposal etc. of flats in co-operative housing societies.

In the case of partnership firms, if any of the partners is a foreign citizen, the firm should obtain permission of Reserve Bank for acquisition/disposal of the immovable property. Likewise, if any member on the governing body of an association/organization or any trustee of a trust is a foreign citizen, such a body/trustee should obtain Reserve Bank's permission.

The Reserve Bank has granted general permission to foreign citizens of Indian origin, (whether resident in India or not), to acquire and dispose of immovable properties (other than agricultural land/farm house/plantation property) situate in India subject to the fulfillment of the following conditions:

    A    Acquisition/Disposal of Residential Property/ies in India other than by
          way of Gift

1. Property is acquired by way of purchase or inheritance for the person's bona fide residential use and transferred by way of sale. (No restrictions are placed on the number of residential properties that can be acquired/disposed of under the general permission except what is mentioned against condition 6 below).
   
   

2. Consideration for the property purchased is met out of foreign exchange remitted from abroad through normal banking channels or funds withdrawn from the purchaser's NRE/FCNR account maintained with a bank in India.
   
   

3. Property purchased is not let out except where it is not immediately required for the purchaser's own residential use.
   
   

4. A declaration is submitted to Reserve Bank (Central Office) about such acquisition in form IPI 7 within a period of 90 days from such acquisition/final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
   
   

5. Income accruing by way of rent or sale proceeds of the property or income arising out of investment of such proceeds is credited to the person's NRO account (if the property is held by a non-resident foreign citizen of Indian origin) or to the Resident Rupee Account i.e. Q.A.22 Account (if the property is held by a foreign citizen of Indian origin resident in India) with a bank in India.
   
   

6. In respect of residential properties purchased on or after 26th May 1993, Reserve Bank would consider applications for the repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property( only up to two such properties ) provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for the purpose should be made to Reserve Bank (Central Office) in form IPI 8 within 90 days of the sale of the property

    B    Acquisition/Disposal of Residential property by way of Gift

1. Properties (up to two houses) are acquired, transferred or disposed of 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.
   
   

2. Gift tax, if any, has been paid. ( With the abolition of the Gift Tax Act, no gift tax is payable by any person in India.)

    C    Acquisition by way of purchase or inheritance or disposal by way of  
          sale of Commercial Property/ies in India

1. Property (not being agricultural land/farm house/plantation property) situated in India is acquired by way of purchase or inheritance and transferred or disposed of by way of sale (No restrictions are placed on the number of such properties acquired/disposed of under the general permission except what is mentioned against condition 4 below).
   
   

2. Consideration for the property purchased is met out of foreign exchange remitted from abroad through normal banking channels or funds withdrawn from the purchaser's NRE/FCNR account maintained with banks in India.
   
   

3. A declaration is submitted to Reserve Bank (Central Office) about acquisition of the commercial property in form IPI 7 within a period of 90 days from such acquisition/final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
   
   

4. Reserve Bank would consider applications for repatriation of original investment in commercial property in respect of properties purchased on or after 26th May 1993 up to the consideration amount remitted in foreign exchange for the acquisition of the property 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 installment of consideration amount, whichever is later. The balance amount of sale proceeds of the property/ies should be credited to the seller's NRO account or Resident Rupee Account (Q.A. 22 Account) in the case of resident foreign citizens maintained with a bank in India. Applications for repatriation of the amount should be made to Reserve Bank (Central Office) in form IPI 8 within 90 days of the sale of the property.

For the purpose of above general permission, a foreign citizen is deemed to be of Indian origin if :-

1. he held an Indian passport at any time, or
   
   

2. he or his father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 provided that citizens of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka and Nepal shall be deemed to be not of Indian origin.

Non-resident Indian nationals are also eligible for the facility regarding repatriation of sale proceeds of the properties provided the other conditions referred to in the said sub-paragraph are satisfied.


General Permission for letting out of Residential Property in India by Non-resident Indians and Persons of Indian origin

The Reserve Bank has granted general permission to non-resident Indian citizens and foreign citizens of Indian origin to let out any immovable property in India held by them. The rental income or proceeds of any investment of such income shall not be repatriable outside India at any time in future and such funds should be credited to the owner's Ordinary Non-Resident Rupee (NRO) account maintained with a bank in India.