The approved method of sending remittances into India is through normal banking channels.
Residential status and nature of transaction i.e. capital account transaction (e.g. purchase/ sale of shares, property) or current account transaction (e.g. remittance of income on shares, property) are the cornerstones of FEMA. Under FEMA, certain types of transactions do not require RBI permission while others either require prior approval of RBI/ Government or it is mandatory to inform RBI of the same.
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/plantationproperty in India to a person resident in India who is a citizen of India.
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.
Such remittances will be converted by banks at the market rate of exchange.
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.
No, as far as quantity of NRI investment is concerned in real estate investment in India there is no limit on the number of investments can be made in commercial properties in India.
Recent trends of rental properties in India are conspicuous by the immense potential that is being realized today. Rentals values in cities like Delhi and outskirts are witnessing an increase of 20-25%. Real estate agents are devoting themselves to negotiations for rented homes more than ever. Though the interest rates on home loans, continued tax exemptions on such prompts people to buy property, those with the ability to buy a flat among the middle-class are thinking twice. In the residential segment, the capital value or cost of flats has almost doubled in cities like Gurgaonwhere prices went up to Rs 45 lakhs from Rs 15 lakhs a couple of years back. The demand for more capital appreciation in the wake of the rising property prices coupled with home loan rate hike has dampened the buying spirit. This has in ways propelled the demand for rental property in India. Residential rental trends Residential rentals for flat/apartment, independent house and PG accommodation are more popular in Tier I and II cities. These cities have far greater avenues for those who are on transferable job or looking for job opportunities. This has created a good market for those seeking to invest in Investment property i.e. investing in a property for rental purposes; as they ensure good rentals on a regular basis. In the high-end rental apartment segment, the terrace flats, luxury apartments and home, bungalows, villas, penthouses and condominiums are gaining ground as a popular choice. The segment is also considered a safe investment option as the leased property is kept under the e inspection of the respective housing society. Increased demand of independent houses or paying guests occur mainly in the metros like Delhi, Gurgaon, Mumbai etc. where the corporate sectors rent independent houses for their senior executives. A paying guest or PG accommodation in India is a convenient accommodation arrangement where the owner provides meal as a part of the rent agreement, apart from several desirable amenities like laundry. Even PG hostels and working womens hostel, are considered safe and can be availed of on an individual or sharing basis mean big business. Commercial rental trends The real estate rental trends in the commercial sector are momentous as the key tendency among the investors is to rent a commercial space instead of buying. It will facilitate low risk and less worry on maintenance. Commercial Rentals including corporate office space, BPO spaces, mall space, shops and Showrooms are an integral part of the commercial rentals in India. Commercial lease agreements with respect to malls are long-term ranging from three to nine years. Buying good space in high-quality development and leasing it to a good brand is a wise investment decision. Usually, commercial lease agreements specify a 15 per cent escalation in real estate rental every three years which is a good enough yield. For those considering regular rental returns rather than capital appreciation, mall space has the distinction to be an excellent option. It gives returns higher than that achieved with office space and much higher than the rental return from residential space. Showroom rentals also enable retailers to know the scope of the returns in business without investing much. Real estate developers are in favor of leasing out commercial property. Departmental stores which can boast of strong electronic surveillance have gone down well the public. Thus shop rentals have been categorized as a safe and growth-oriented performer in the real estate rental business with a more confident market. Service Apartments Service apartments which come in the form of furnished apartments geared to short and long term accommodation of corporate houses and MNCs are competitively priced than hotels. Serviced apartments are also increasingly been seen by multinationals operating in India as the most cost effective option. Moreover, commercial rental market is witnessing the rising trend of mixed use developments. The product mix will have malls and office spaces with service apartments. Some of the companies are setting a trend of leasing out service apartments when they have to move their employees for a short period of time. In Conclusion A constant watch on the prevailing rental developments in India will provide serious opportunities as it has for companies in the IT, ITES and the BPO sector that have been the key drivers in the commercial rental space for Call centers/BPO offices. Their massive recruitment drive necessitates large office complexes. This has spelt success of the real estate rental business. Leased out industrial properties/ plots of land for industrial projects have the advantage of long term agreements between the owners and the tenants. The scene on the residential apartment rentals is looking up. The new concepts being developed are, in fact, redefining the traditional ideas that were synonymous with rental market in India.
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.
Investments by NRIs and OCBs 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.
Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside India and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of at least 60% by individuals of Indian nationality or origin resident outside India as also overseas trusts in which at least 60% of the beneficial interest is irrevocably held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs as long as the ownership/beneficial interest held in them by NRIs continues to be at least 60%
A Person of Indian Origin (PIO) is a citizen of any other country but whose ancestors were Indian nationals at least four generations away.
An Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Person Posted in U.N organizations and official deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian Origin are treated on par with non resident Indian citizen(NRIs).