TMI BlogMaster Direction – Acquisition and Transfer of Immovable Property under Foreign Exchange Management Act, 1999 (Updated as on September 01, 2022)X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, respectively. These Rules and Regulations are amended from time to time to incorporate the changes in the regulatory framework and published through amendment notifications. 2. Within the contours of the Rules and Regulations, Reserve Bank of India also issues directions to Authorised Persons under Section 11 of the Foreign Exchange Management Act (FEMA), 1999 . These directions lay down the modalities as to how the foreign exchange business has to be conducted by the Authorised Persons with their customers/constituents with a view to implementing the regulations framed. 3. Instructions issued on acquisition of immovable property have been compiled in this Master Direction. The list of underlying circulars/ Rules and Regulations which form the basis of this Master Direction is furnished in the Appendix. Reporting instructions can be found in Master Directions on reporting ( Master Direction No. 18 dated January 1, 2016 ) 4. It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Rules, Regulations or the manner in which relative transactions are to be conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip Act, 1955. 2.3 Repatriation outside India means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency. 2.4 Transfer includes sale, purchase, mortgage, exchange, pledge, gift, loan or any other form of transfer of right, title, possession or lien. 2.5 Relative means relative as defined in section 2(77) of the Companies Act, 2013. 3. Acquisition/ transfer by a Non- Resident Indian (NRI) 3.1 8 Acquisition of immovable property 3.1.1 9 An NRI or an OCI can acquire by way of purchase any immovable property (other than agricultural land/ plantation property/ farm house) in India. 10 3.1.2 An NRI or an OCI can acquire by way of gift any immovable property (other than agricultural land/ plantation property/ farm house) in India from person resident in India or from an NRI or an OCI who is a relative as defined in section 2(77) of the Companies Act, 2013. 11 3.1.3 An NRI or an OCI can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person being a citizen of Afghanistan, Bangladesh or Pakistan belonging to minority communities in those countries viz., Hindus, Sikhs, Jains, Buddhists, Parsis and Christians, who is residing in India and has been granted a Long-Term Visa (LTV) by the Central Government may purchase only one residential immovable property in India as dwelling unit for self-occupation and only one immovable property for self-employment. 5.2 The property should not be located in and around restricted/ protected areas so notified by the Central Government and cantonment areas. 5.3 The person should submit a declaration to the Revenue Authority of the district where the property is located specifying the source of funds and that he/ she is residing in India on a LTV. 5.4 The registration documents of the property should mention the nationality and the fact that such person is on a LTV. 5.5 The property of such person may be attached/ confiscated in the event of his/ her indulgence in anti-India activities. 5.6 A copy of the documents of the purchased property shall be submitted to the Deputy Commissioner of Police (DCP)/ Foreigners Registration Office (FRO)/ Foreigners Regional Registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resident outside India, he/ she can utilise the remittance facilities available under the Foreign Exchange Management (Remittance of Assets) Regulations, 2016, as amended from time to time. 8.2 In the event of sale of immovable property other than agricultural land/ farm house/ plantation property in India by 21 a PIO resident outside India [who held property in India in terms of the erstwhile FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2000] or an NRI or an OCI, the Authorised Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely: 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; 22 23 the amount for acquisition of the immovable property was paid in foreign exchange received through banking channels or out of funds held in FCNR(B) account or NRE account; In case an immovable property in India has been purchased by 24 a PIO resident outside India [who held property in India in terms of the erstwhile FEM (Acquisition and transfer of Immovable Property in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seas lender/ security trustee; In the event of enforcement/ invocation of the charge, the immovable asset (property) will have to be sold only to a person resident in India and the sale proceeds shall be repatriated to liquidate the outstanding ECB. 28 10.2 An authorised dealer which is an Indian correspondent of an overseas lender may create a mortgage on an immovable property in India owned by an NRI or an OCI who is a director of a company outside India, for a loan to be availed by the company outside India from the said overseas lender subject to the following conditions: (a)The funds should be used by the borrowing company only for its core business purposes overseas; and (b)In case of invocation of charge the authorised dealer should sell the immovable property to an eligible acquirer and remit the sale proceeds to the overseas lender. 29 10.3 A person resident outside India who has acquired any immovable property in India in accordance with foreign exchange laws in force at the time of such acquisition or with the general or specific permission of the Reserve Bank may transfer such property to a person resident in India provided the transaction takes place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be extra vigilant in matters of acquisition and transfer of immovable property in India by a person resident outside India and satisfy themselves about the eligibility under FEMA before registering a sale or purchase of immovable property in India. The enquiries may include both the intending buyers and sellers. The relevant travel documents and the nature of visa may also be verified before registering such sale / purchase. Government has further advised all including concerned authorities in the State Governments that wherever appropriate, the authorities may consider reviewing registration of sale / purchase already made to determine their compliance with legal requirements. Further, persons acquiring immovable property have to fulfil the requirements, if any, prescribed by the State authorities. A foreign company which has established a Branch Office or other place of business in India under the provisions of Foreign Exchange Management (Establishment in India of Branch or Office or Other Place of Business) Regulations, 2000 (FEMA 22/2000-RB dated the 3rd May, 2000) can acquire immovable property in India which is necessary for or incidental to carrying on such activity, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Non-debt Instruments) Rules, 2019, with effect from October 17, 2019. 3 Updated up to September 01 ,2022, through Foreign Exchange Management (Overseas Investment) Rules, 2022 4 In view of supersession of Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015 with Foreign Exchange Management (Overseas Investment) Rules, 2022 and issuance of directions for Acquisition or Transfer of Immovable Property outside India within the Foreign Exchange Management (Overseas Investment) Directions, 2022 vide A.P. (DIR Series) Circular No.12 with effect from August 22, 2022, the acquisition and transfer of Immovable property shall be governed accordingly. 5 Notification No. FEMA 21R has been superseded by FEM (NDI) Rules, 2019 6 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion, it read as A Non-Resident Indian (NRI) is a citizen of India resident outside India. 7 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion it read as: NRIs can make payment for acquisition of immovable property (other than agricultural land/ plantation property/ farm house) out of funds received in India through normal banking channels by way of inward remittance from any place outside India or by debit to his NRE/ FCNR (B)/ NRO account. 16 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion it read as: NRIs can make payment for acquisition of immovable property (other than agricultural land/ plantation property/ farm house) out of funds received in India through normal banking channels by way of inward remittance from any place outside India or by debit to his NRE/ FCNR (B)/ NRO account. 17 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion, it read as, 4. Acquisition/ transfer by a Person of Indian Origin (PIO) 4.1 Purchase of immovable property A PIO resident outside India can acquire by way of purchase any immovable property (other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t outside India, he can make a remittance under the facilities available under the Foreign Exchange Management (Remittance of Assets) Regulations, 2000, as amended from time to time. 21 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion it read as, NRI/ PIO resident outside India. 22 Deleted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to deletion it read as, or the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2000. 23 Inserted by FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2018 with effect from March 26, 2018 through FEMA 21(R), dated 26.03.2018. Prior to insertion it read as, the amount to be repatriated does not exceed the amount paid for acquisition of the immovable property received through normal banking channels or out of funds held in FCNR(B) account or NRE account. 24 Inserted by FEM (Acquisition and transfer o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
