Aquisition of property by PIO

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ACQUISITION AND TRANSFER OF IMMOVABLE PROPERTY IN INDIA
Acquisition and Transfer of Immovable Property in India
A person resident outside India who is a citizen of India (NRI) can acquire by
way of purchase, any immovable property in India other than agricultural
land/plantation property/farm house. He can transfer any immovable property
other than agricultural or plantation property or farm house to:
a) A person resident outside India who is a citizen of India or
b) A person of Indian origin resident outside India or
c) A person resident in India.
He may transfer agricultural land/ plantation property / farm house acquired by
way of inheritance, only to Indian citizens permanently residing in India.
Payment for acquisition of property can be made out of:
i. Funds received in India through normal banking channels by way of
inward remittance from any place of India or
ii. Funds held in any non-resident account maintained in accordance with
the provisions of the Foreign Exchange Management Act, 1999 and the
regulations made by Reserve Bank Of India from time to time.
Such payment can not be made either by traveller’s cheque or by foreign
currency notes or by other mode than those specially mentioned above.
A person resident outside India who is a person of Indian Origin (PIO) can
acquire any immovable property in India other than agricultural land / farm
house / plantation property:-
i. By way of purchase out of funds received by way of inward remittance
through normal banking channels or by debit to his NRE/ FCNR(B)/ NRO
account.
ii. By way of gift from a person resident in India or a NRI or a PIO.
By way of inheritance from any a person resident in India or a person resident
outside India who had acquired such property in accordance with the provisions
of the foreign exchange law in force or FEMA regulations at the time of
acquisition of the property.
A PIO may transfer any immoveable property other than agricultural land /
Plantation property / farm house in India
a) By way of sale to a person resident in India.
b) By way of gift to a person resident in India or a Non resident Indian or a
PIO.
A PIO may transfer agricultural land / Plantation property / farm house in India
by way of sale or gift to person resident in India who is a citizen of India.
Purchase/ Sale of Immovable Property by Foreign Embassies / Diplomats
/ Consulate General
Foreign Embassy / Consulate as well as Diplomatic personnel in India are
allowed to purchase / sell immovable property in India other than agricultural
land / plantation property / farm house provided (i) clearance from Government
of India, Ministry of External Affairs is obtained for such purchase / sale, and (ii)
the consideration for acquisition of immovable property in India is paid out of
funds remitted from abroad through banking channel.
Acquisition of Immovable Property for carrying on a permitted activity
A branch, office or other place of business, (excluding a liaison office) in India
of a foreign company established with requisite approvals wherever necessary,
is eligible to acquire immovable property in India which is necessary for or
incidental to carrying on such activity provided that all applicable laws, rules,
regulations or directions in force are duly complied with. The entity/concerned
person is required to file a declaration in the form IPI with Reserve Bank, within
ninety days from the date of such acquisition. The non-resident is eligible to
transfer by way of mortgage the said the said immovable property to an AD
bank as a security for any borrowing.
Repatriation of sale proceeds
In the event of sale of immovable property other than agricultural land / farm
house / plantation property in India by NRI / PIO, the authorized dealer will
allow repatriation of sale proceeds outside India provided;
i. The immovable property was acquired by the seller in accordance with
the provisions of the foreign exchange law in force at the time of
acquisition by him or the provisions of FEMA Regulations;
ii. The amount to be repatriated does not exceed (a) the amount paid for
acquisition of the immovable property in foreign exchange received
through normal banking channels or out of fund held in Foreign currency
Non-Resident Account or (b) the foreign currency equivalent as on the
date of payment, of the amount paid where such payment was made
from the funds held in Non-Resident External account for acquisition of
the property.
iii. In the case of residential property, the repatriation of sale proceeds is
restricted to not more than two such properties.
In the case of sale of immovable property purchased out of Rupee funds, ADs
may allow the facility of repatriation of funds out of balances held by NRIs/PIO
in their Non-resident Rupee (NRO) accounts upto US$ 1 million per financial
year subject to production of undertaking by remitter and a certificate from the
Chartered Accountant in the formats prescribed by the CBDT.
Prior permission for acquisition or transfer of immovable property in India
by citizen of certain countries
No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan,
China, Iran, Nepal or Bhutan shall acquire or transfer immovable property in
India, other than lease, not exceeding five years without prior permission of
Reserve Bank. Foreign nationals of non Indian origin resident outside India
are not permitted to acquire any immovable property in India unless such
property is acquired by way of inheritance from a person who was resident in
India. Foreign Nationals of non Indian origin who have acquired immovable
property in India by way of inheritance with the specific approval of RBI can not
transfer such property without prior permission of RBI.

Advocate Siddhant Sharma LawRato