We are providing some ready to use information for our customer's. Information provided may vary case to case. Itís been provided in general terms.
Following are some of the most common questions asked by NRIs:
- Q. Do non-resident Indian citizens/ foreign citizens of Indian
origin require permission of Reserve Bank to acquire residential
property in India?
A. Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain permission of Reserve Bank.
- Q. In what manner the purchase consideration for the
residential immovable property should be paid by foreign
citizens of Indian origin under the general permission?
A. 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.
- Q. Are there any formalities required to be completed by
foreign citizens of Indian origin for purchasing residential
immovable property in India under the general permission?
A. They are required to file a declaration in form IPI 7 with the Central Office of Reserve
Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
- Q. Can such property be sold without the permission of Reserve
A. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in
- Q. Can sale proceeds of such property if and when sold be
remitted out of India?
A. In respect of residential properties purchased on or after 26th May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.
- Q. Are any conditions required to be fulfilled if repatriation
of sale proceeds isdesired?
A. Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.
- Q. Can we get a loan from the bank?
A. Yes. You can avail Home Loan from your preferred bankers. We will provide all the land documents required by the bank.
- Q. How much can I get?
A. Depends on the banker. Normally a maximum of 75% to 85% of the consideration value. Your repayment capacity as determined by the bank, taking into account your age, income, qualification, asset liability, stability/continuity of your employment/business and the co-applicant's income.
- Q. who can be the co-applicant for the loan?
A. You can include your spouse as co-applicant for the home loan and include his/her income to enhance your loan amount.
- Q. Over how many years can I repay the loan?
A. A maximum of twenty years for both employed and self employed.
- Q. What are common documents to be submitted by NRIs along with the application?
A. The following are the documents required along with the application form.
Photocopy of the labour contract duly countersigned by your employer (translated in English).
Latest salary certificate specifying
Name (as it appears in passport)
Date of joining
Perquisites and salary
Photocopy of passport with a valid resident visa stamped on the visa
Photocopy of labour card / Identity card
Photocopy of last six months statement of local bank account
Property related documents
Q. What are the benefits of taking a home loan.
A. The income tax authorities look with favor upon those servicing a housing loan from specified financial institutions. And, it is up to you to be wise enough to take advantage of this.
Let's start with Section 24 of the Income Tax Act.
Interest paid on capital borrowed for the acquisition, construction, repair, renewal or reconstruction of property is entitled to a deduction. That means you are allowed to deduct
an amount equivalent to the total interest payable on the housing loan from your taxable income within the same financial year.
This is now a substantial amount. It started off with the Income Tax Department offering Rs15,000 as the maximum amount eligible for deduction in the case of self-occupied property. This later got doubled to Rs 30,000. It did not stop there. After getting enhanced to Rs75,000, it was then taken to a limit of Rs 1 Lakh. Presently, the limit stands elevated to Rs1.5 Lakhs. So, should you borrow money to acquire, construct, repair, renew or reconstruct property on or after April 1, 1999, you get a deduction of up to Rs 1.5 Lakhs. The criteria being: the property has to be acquired or constructed by March 31, 2003 and be self-occupied.