FAQ's -
NRI / PIO
Most of us wants to invest in
real estate in India, but the biggest question being faced is how do
we know the best deal, whom do we trust, and which investment will
give us the maximum return on investments. In order to generate the
confidence level among Non Resident Indians and People of Indian
Origin, we have started the first overseas Property Affaire-Indian
Realty Boutique in Canada, where we will be permanently show casing
the properties of reputed Indian builders as well as give
professional advise on investment opportunities in India along with
tax consultation and legal advise from our panel of experts.
FAQ's -
NRI / PIO
Q: Which are the
banks that provide home loan to NRIs?
State Bank of India, ICICI, HDFC, Citibank etc.. TOP
Q: What kind of home loans are there for NRIs?
- To purchase/construct a new
house / flat
- To repair, renovate or extend an
existing house/flat
- To purchase an existing
house/flat
- To purchase a plot for
construction of a dwelling unit.
-
To purchase furnishings and
consumer durables, as a part of the project cost TOP
Q: What is the Eligibility criteria?
- Minimum age 21 years
- Valid Indian Passport (for
NRIs)/ valid foreign passport (for PIOs)
-
Salaried individual with at
least 2 years of work experience Must have a steady gross annual
income (Minimum amount varies from each Bank) TOP
Q: What documents are required to get these loans?
Q: What is minimum and maximum loan amount a NRi can
get?
You can avail a loan of any amount ranging from INR 5 lakhs to INR 1
crore.
The loan amount is subject to:
• Your repaying capacity
• The scheme-wise caps TOP
Q: What types of bank accounts can be opened by
NRIs/OCBs in India?
NRIs/OCBs can open the following types of accounts with banks in
India, which hold authorised dealer licences, as also other banks,
specifically authorised by the Reserve Bank to maintain accounts in
the names of NRIs/OCBs.
Rupee Accounts:-
Non-Resident (Ordinary) Account - NRO A/c.
Non-Resident (External) Rupee Account - NRE A/c.
Foreign Currency Accounts:-
Non-Resident (Foreign Currency) Account - FCNR A/c. (in Pounds,
Sterling, US Dollars, Japanese Yen and Euro).
A person, resident in India, who is earning foreign exchange, is
also permitted to maintain a Foreign Currency account in India with
an authorised dealer bank, to the extent of 50% of such foreign
exchange earnings, under the Exchange Earners Foreign Currency
Account (EEFC) Scheme. TOP
Q: What are the special features of each account?
The special features are as under:
NRO A/c.: The funds, standing to the credit of this account,
cannot be repatriated outside India in foreign exchange, without
prior permission of the Reserve Bank of India. Interest, earned on
these accounts, is, however, eligible for repatriation outside
India, net of Indian taxes. The remittance of interest (net of
taxes) will be permitted by the authorised dealer, where the account
is maintained, if the account holder makes an application to the
authorised dealer, in the prescribed form. No RBI permission is
required for remittance of interest.
NRE A/c.: The funds, standing to the credit of this account,
as well as interest earned thereon, are remittable outside India in
free foreign exchange, without permission of the RBI. The interest
income is not subject to Indian Income-tax. Credits to the accounts
should be in the form of remittance in foreign exchange from outside
India, as well as other funds, which are eligible to be remitted
outside India, in free foreign exchange. Funds, emanating from local
sources, are not eligible to be credited to these accounts, unless
these funds are otherwise remittable outside India, in terms of the
existing Exchange Control Regulations.
FCNR A/c.: These accounts can be opened in four foreign
currencies:c Pounds Sterling
US Dollars
Japanese Yen
Euro
For the purpose of opening an account, remittance in foreign
exchange, in the same currency, should be received in India. The
accounts can be opened only as fixed deposits, with a minimum
maturity of one year and, a maximum maturity of three years. The
principal, as well as interest, earned on these accounts, is
remittable outside India, in the same currency or, in other
convertible currency, as desired by the account holder. The
interest, earned on these deposits, is exempt from Indian
Income-tax. TOP
Q: Can Non Resident accounts be opened/ operated by
the Power of Attorney holder in India, on behalf of the
non-resident?
The accounts cannot be opened by the Power of Attorney holder in
India. However, the latter can operate the accounts for the purpose
of local payments to be made on behalf of the non-resident account
holder. The Power of Attorney holder is not permitted to make gifts
from these accounts and, is not allowed to make remittances outside
India. TOP
Q: What happens to the status of these accounts when
the non-resident holder becomes a person, resident in India?
The accounts are to be re-designed as resident accounts, when the
non-resident account holder becomes a person, resident in India. In
the case of fixed deposits opened by the account holder, before
becoming resident in India, the contracted rate of interest will be
paid till maturity of the deposits. Similarly, FCNR deposits will be
eligible to be held in respective currencies till maturity of the
deposits, even after the non-resident holder become a resident in
India. He will, however, cease to get tax exemption on interest on
the erstwhile deposits (NRE/FCNR deposits), after he becomes
resident in India. In certain situations, it might be advisable for
the account holder to convert the account to a Resident Foreign
Currency Account Deposit (RFC) TOP
Q: What are the various facilities available to
NRIs/OCBs?
The facilities available to NRIs/OCBs for making investment in India
are as follows:
- Opening and maintenance of bank accounts in India.
- Investment in shares and securities of Indian companies,
government securities, units of domestic mutual funds and ,deposits
with Indian companies/firms.
- Investment in immovable properties in India.
- Investment in proprietorship/partnership concerns in
India. TOP
Q: Are NRIs permitted to send remittances outside
India out of the assets in India that are inherited by them?
Yes. RBI will consider application from NRIs for remittance of
assets, inherited by them in India. Such remittance may be permitted
up to US$ 100,000 per year. TOP
Q: Can a person of Indian origin acquire any
immovable property in India by way of inheritance?
A person of Indian origin, resident outside India, may acquire any
immovable property in India by way of inheritance from a person,
resident outside India, who had acquired such property in accordance
with the provisions of foreign exchange law in force at the time of
acquisition by him or the provisions of Foreign Exchange Management
(Acquisition and Transfer of Immovable Property in India)
Regulations, 2000. Immovable property, by way of inheritance, can
also be acquired by a person of Indian origin resident outside from
a person resident in India. TOP
Q: Can NRIs and Overseas Corporate Bodies (OCBs)
invest in India?
The Government of India has adopted a liberal policy, with respect
to investments by NRIs and OCBs in India. Such investments are
allowed, both, through the RBI route and also through the Government
route, i.e., through the Foreign Investment Promotion Board (FIPB)
NRIs and OCBs are permitted to invest up to 100% equity in real
estate development activity and civil aviation sectors. Investment,
made by the NRIs and OCBs, are fully repatriable, except in the case
of real estate, which has a 3 year lock-in period on original
investment and, 16% cap on dividend repatriation.
For those proposals that do not qualify under the automatic route,
Government approval is granted through FIPB. TOP
Q: What is the extent and application of Foreign
Exchange Management Act (FEMA)?
FEMA extends to the whole of India. It also applies to all branches,
offices and agencies outside India, owned or controlled by a person,
resident in India. It also applies to any contravention, there
under, committed in or, outside India, by any person to whom the Act
applies. TOP
Q: What is the penalty for contravention of FEMA?
Any person, contravening FEMA, shall be liable, upon adjudication,
to a penalty up to three times the sum involved in such
contravention, where such amount is quantifiable, or up to Rupees
Two hundred thousand, where the amount is not quantifiable. In
addition, where such contravention is a continuing one, the person
will be liable to further penalty, which may extend to Rupees Five
thousand for every day after the first day, during which the
contravention continues. TOP
Q: Can a person of Indian origin resident outside
India gift properties acquired earlier in terms of the provisions of
FERA/FEMA?
Yes. A person of Indian origin resident outside India may transfer
residential or commercial property in India by way of gift to a
person resident in India or to a person resident outside India who
is a citizen of India or to a person of Indian origin resident
outside India. A Person of Indian origin resident outside India may
also transfer by way of gift agriculture land/farm house/plantation
property in India to a person resident in India who is a citizen of
India. TOP
Q: Can an NRI account be opened in the name of crew
members of shipping companies?
Yes. NRI accounts can be opend in the name of crew members of
shipping companies if their posting is not based in India and they
derive their income from abroad in foreign currency. TOP
Q: Who is a person of Indian Origin?
For the purposes of availing of the facilities of opening and
maintenance of bank accounts and investments in shares/securities in
India
- A foreign citizen (other than a
citizen of Pakistan or Bangladesh)is deemed to be of Indian
origin, if,
- he, at any time, held an
Indian passport, or
- he or either of his parents or
any of his grand parents was citizen of India by virtue of the
Constitution of India or Citizenship Act, 1955 (57 of 1955).
- For investments in immovable
properties
A foreign citizen (other than a citizen of Pakistan, Bangladesh,
Afghanistan, Bhutan, Sri Lanka, or Nepal), is deemed to be of
Indian origin if,
- He held an Indian passport at
any time, or
-
He or his father or paternal
grand-father was a citizen of India by virtue of the
(Constitution of India or the Citizenship Act, 1955 (57 of
1955). TOP
Q: Who is eligible?
Person 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 a Indian
passport
- 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 citizens 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. TOP
Q: What is the fee for the PIO Card?
Fee for new PIO Card for adult - US $ 310.00
Fee for new PIO Card for children below the age of 18 years - US $
155.00 TOP
Q: What is the validity of the PIO Card?
20 years subject to the validity of the passport.
Note: The PIO Card will be valid only when accompanied with a valid
passport. TOP
Q: Where can I apply to obtain PIO card?
- An application for issue of a
PIO Card shall be made to an Indian Mission in the country where
the applicant is ordinarily resident.
- Applicants already in India on
Long Term Visa (more than one year) shall make the application for
issue of a PIO Card to the following authorities:
Those residing in:
- Delhi
Foreigners Regional Registration Officer, Level –II, East Block
VIII, R.K.Puram, Sector – I,
New Delhi
Tel: 91-11-331 9489 Fax: 91-11-375 5183
- Mumbai:
Foreigners Regional Registration Officer, Annex II, Commissioner
of Police,Craw Ford
Market, Mumbai - 400001.
Tel: 91-22-262 1169 Fax: 91-22-262 0721
- Calcutta
Foreigners Regional Registration Officer, 237, Acharya Jagdish
Calcutta - 700020
Tel: 91-33-247 3301 Fax: 91-33-247 0549
- Chennai:
Chief Immigration Officer, Bureau of Immigration, Shastri Bhavan
Annex, No.26,Haddows Road,
Chennai- 600006.
Tel: 91-44-827 7036 Fax: 91-44-827 7036
Those residing in areas other than
above:
Joint Secretary (Foreigners). Ministry of Home Affairs, 1st floor,
Lok Nayak Bhavan, Khan Market
New Delhi- 110003
Tel: 91-11-469 3334 Fax: 91-11-462 1563 TOP
Q: Can NRIs make investments in companies engaged in
real estate development in India?
Yes.Investment up to 100% in the new issue of equity
shares/convertible debentures of Indian companies engaged in the
following areas is allowed–
- Development of serviced plots
and construction of built up residential premises;
- Real estate covering
construction of residential and commercial premises (including
business centres and offices;
- Development of township;
- City and region level urban
infrastructure facilities including roads and bridges;
- Manufacture of building
material;
-
Financing of housing
development. TOP
Q: Is permission of
Reserve Bank required for NRIs to invest in proprietary/partnership
concerns on non-repatriation basis?
No.Reserve Bank has granted general permission to non-resident
individuals of Indian nationality/origin to invest by way of capital
contribution in any proprietary or partnership concern in India on
non-repatriation basis provided the investee concern is not engaged
in agricultural/plantation activity or real estate business. This
facility is, however, not available to OCBs. TOP
Q: What are the schemes available to NRIs for direct
investments in India with repatriation benefits?
NRIs can make investments in new issues of shares/convertible
debentures of Indian companies under direct investment schemes such
as 24% scheme/51% scheme/100% scheme. They can also invest in the
schemes of domestic Mutual Funds floated by public/private sector
institutions/companies. Non-resident investors are not required to
apply for permission to invest. The company concerned will have to
file a declaration in Form ISD together with the required documents
to Reserve Bank within 30 days from the date of issue. TOP
Q: What is 24% Scheme?
Under the 24% Scheme, Indian companies engaged or proposing to
engage in any activity including finance, hire purchase, leasing,
trading or other services, establishment of schools/colleges, etc.
(except agricultural/plantation activities) are allowed to issue
shares/debentures to NRIs with repatriation benefits to the extent
of 24% of the new issue. TOP
Q: What is 51% Scheme?
Under the 51% Scheme, NRIs/OCBs are permitted to subscribe to new
issues of equity/preference shares and convertible debentures of any
new or existing company on repatriation basis provided
- The issue of equity/preference
shares and convertible debentures to NRIs/OCBs with repatriation
benefits does not exceed 51 per cent of the face value of each new
issue of the company.
- The shares of the company are
not listed on any stock exchange, and
- The company is engaged in
manufacturing activity not being an activity speified in Annexure
III to the Statement of Industrial Policy 19991 of Government of
India amended from time to time.
Investment under this scheme can be
made for setting up new manufacturing projects or for
expansion/diversification of their existing manufacturing
activities. TOP
Q: How does an NRI obtain permission of Reserve Bank
for investment under the 24% or 51% or 100% Scheme?
The NRI investor need not apply to Reserve Bank. Indian companies
have been permitted to issue shares/convertible debentures to
NRIs/OCBs. They have to file declaration in Form ISD together with
the required documents to Reserve Bank within 30 days from the date
of issue. TOP
