NRI Matters
Last Updated: 25th August 2009
An NRI is an Indian citizen residing abroad, where as a PIO is someone who had held an Indian passport before or who father/grand father was an I ndian citizen. If you are a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) a different set of property rules mayt apply to you. We have tried to address a few issues here and would continue to update this document in future. One word of caution, what we have described here is for a general idea. We urge you to do your own research
What property an NRI or PIO can acquire?
As an NRI/PIO you can acquire immovable property in India other than agricultural land or, plantation property or farm house.
What property an NRI or PIO cannot acquire?
As stated under the previous point NRI/PIO cannot acquire agricultural land or, plantation property or farm house.
How can an NRI/PIO pay for a property acquired in India?
An NRI/PIO may pay for the property from his/her own funds or by availing a loan from a bank in India. Own funds means money received in India by way of remittances from overseas from income earned overseas, savings held outside India or from NRE/NRO/FCNR bank accounts. Paying from own funds by the above means is necessary from reptriation pint of view.
Can an NRI/PIO avail housing loans?
Yes, for residential accommodation in India. The loan amount cannot be credited to NRE/NRO/FCNR accounts. The loan needs to be secured by the property for which the loan amount is necessary. Banks may need additional lien on assets held in India by NRI/PIO.
How does an NRI/PIO repay the loan taken in India?
The loan intallments need to be paid with remittances from outside India or from NRE/NRO/FCNT accounts. The loan and interest can also be repaid from rental income of the property for which such loan has been availed.
Can an NRI/PIO remit the sale proceeds of a property overseas?
The repatriation of funds is possible provided the amount does not exceed the amount paid for for the property or the amount paid for the property from an FCNR account or foreign currency equivalent of the amount paid from NRE account for acquisition of the property.