NRI investment in India

As per the said Foreign Exchange Management Act an Indian citizen who resides outside India is permitted to acquire any immovable property in India other then agricultural/plantation property or a farm house.

If you are an Indian citizen and staying outside India or a PIO does not need any special permission to buy an immovable property in India. NRIs can invest in real estate by remitting funds to India through normal banking channels, or by investing in funds in NRE/FCNR/NRO accounts they hold in India. They cannot make payment via travelers’ cheque or foreign currency notes. They cannot pay outside India or settle payments through exchange of funds outside the country.

You have to pay the registration charges, stamp duty. service tax (if the apartment / villa is under construction). The stamp duty differs in every state of India. Make sure that the prevailing stamp duty is paid. It is imposed on the land value of the apartment and in some cases the stamp duty is on the whole.

If a Non-Resident Indian (NRI) sells a property in India after holding it for a period of more than three years, then long term capital gains tax of 22.66% will be applicable.

NRIs have no restrictions on how many commercial or residential properties they can own in India. However, there are restrictions on the repatriation of sale proceeds. Repatriation is limited to two units.Repatriation of sale Proceeds equivalent to the Original Investment is permitted for a maximum of two houses as well as Commercial Property after 3 years of acquisition (ie possession) or payment of last installment, whichever is later , provided the investment is out of direct remittance or NRE/FCNR account. Form IPI 8 to be submitted to RBI within 90 days of sale of the property.