FOREIGN EXCHANGE MANAGEMENT (ACQUISITION AND TRANSFER OF IMMOVABLE PROPERTY IN INDIA) REGULATIONS, 2000

FOREIGN EXCHANGE MANAGEMENT

(ACQUISITION AND TRANSFER OF IMMOVABLE PROPERTY IN INDIA) REGULATIONS, 2000

A person resident outside India or A person resident outside India but who is a citizen of India may acquire or transfer of any immovable property in India by comply the provisions of regulation of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000.

Person of Indian origin means:-

An individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who,

i)                Held an Indian passport (at any time)

ii)               Either of whose father or mother or grandfather or grandmother was a citizen of India as per Constitution of India or as per Citizenship Act, 1955 inserted in [FEM (Acquisition and Transfer of Immovable Property in India) (Second Amendment) Regulations, 2009, w.e.f. 5-10-2009]

Acquisition and Transfer of Property in India by an Indian Citizen resident outside India.

a)     Acquire immovable property in India other than;

i)                Agricultural Property

ii)               Plantation or,

iii)             Farm House

It is clarified that: payment of purchase price for acquisition of immovable property in India shall be made out of,

i)                Funds received in India through normal Banking Channel by way of inward remittance from any place outside India

ii)               Funds held in any non-resident account

(Payment for purchase price shall not be made through Traveller’s cheques or by foreign currency notes or other mode that is not permitted)

Traveller’s cheques means:

 A traveler's check is a medium of exchange that can be used in place of hard currency. Travelers' checks are often used by individuals who are traveling on vacation to foreign countries. The checks were first introduced by American Express.

It provides a safe way to carry currency abroad. Security is provided against lost or stolen checks by the issuing party – Generally a Bank. Specific checks are given unique check numbers, similar to a normal check.

(b) Transfer of any immovable property in India to a person resident in India, and

(c) Transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or;

To a person of Indian origin resident outside India.

Acquisition and Transfer of Property in India by a person of Indian origin.

(a)   Acquire immovable property in India other than;

i)                Agricultural Property

ii)               Plantation or,

iii)             Farm House

Proviso: payment of purchase price for acquisition of immovable property in India shall be made out of,

i)                Funds received in India through normal Banking Channel by way of inward remittance from any place outside India

ii)               Funds held in any non-resident account

(Payment for purchase price shall not be made through Traveller’s cheques or by foreign currency notes or other mode that is not permitted)

(b)  Acquire any immovable property in India other than agricultural land/farm house/plantation property by way of gift from a person resident in India or ;

From a person resident outside India who is a citizen of India or;

From a person of Indian origin resident outside India;

(c)   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 the foreign exchange law in force at the time of acquisition by him or;

As per provisions of these Regulations or;

From a person resident in India;

(d)  Transfer any immovable property in India other than agricultural land/farm house/plantation property, by way of sale to a person resident in India;

(e)   Transfer agricultural land/farm house/plantation property in India, by way of gift or sale to a person resident in India who is a citizen of India;

(f)    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.

Acquisition of Immovable Property for carrying on a permitted activity.

A person resident outside India who has established in India in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, a branch, office or other place of business (excluding a liaison office) for carrying on in India any activity, may-

(a) Acquire any immovable property in India, which is necessary for carrying on such activity :

It is clarified that;

(i)              All applicable laws, rules, regulations or directions for the time being in force are duly complied with; and

       (ii)     The person files with the Reserve Bank a declaration in the Form IPI annexed to these    regulations, not later than ninety days from the date of such acquisition;

(b) Transfer by way of mortgage to an authorised dealer as a security for any borrowing, the immovable property acquired in pursuance of clause (a).

Purchase/Sale of Immovable Property by Foreign Embassies/Diplomats/Consulate Generals.

A Foreign Embassy/Diplomat/Consulate General may purchase/sell immovable property in India other than agricultural land/plantation property/farm house provided

(i)              Clearance should be taken from, Ministry of External Affairs, 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.

(Note: No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan without prior permission of the Reserve Bank shall acquire or transfer immovable property in India, other than lease, not exceeding five years.)

Sanoj Kumar

Mob No.: 8285189599