Most news papers in Goa reported on 11th June 2024 about relaxation in procedures by Government of Goa for NRIs, OCI card holders and some other categories while buying properties in Goa.
You may read the news here https://bit.ly/4ebEyT7.
After this relaxation issued by Goa’s law department,
- Civil Registrar-cum-Sub Registrars are no longer required to examine and decide on documents falling under FEMA Regulations.
- Parties to transactions are fully responsible for complying with FEMA Regulations.
- If a party is an NRI/OCI/PIO/Foreign National, they must declare non-agricultural land/properties and comply with FEMA/RBI guidelines.
- The office of the Civil Registrar-cum-Sub Registrars is not accountable for compliance.
Because of this, if you are a party to this news, you must understand what compliances are requied under FEMA Regulations while buying the property by NRI/OCI/PIO/Foreign National.
As an NRI (Non-Resident Indian) or OCI (Overseas Citizen of India), understanding the intricacies of property acquisition and transfer in India is crucial. Chapter IX of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, provides comprehensive guidelines on how NRIs, OCIs, and other foreign nationals can deal with immovable property in India. Here’s an in-depth look at these rules to help you navigate the process smoothly. We have tried to put this in a tabular form and tried to make it as simple as possible.
| Rule | Action | Allowed for NRIs/OCIs | Not Allowed for NRIs/OCIs |
|---|---|---|---|
| 24 | Acquire Property | – Any property except agricultural land, farmhouses, or plantations.<br>- Payment through banking channels or non-resident accounts. | – Agricultural land<br>- Farmhouses<br>- Plantations<br>- Payment via traveler’s cheque, foreign currency notes, or unauthorized modes |
| Receive Gifted Property | – Any property except agricultural land, farmhouses, or plantations.<br>- From a resident, NRI, or OCI relative. | – Agricultural land<br>- Farmhouses<br>- Plantations | |
| Inherit Property | – Any property from a non-resident who complied with foreign exchange laws.<br>- From a resident in India. | – Not applicable | |
| Transfer Property | – Any property to a resident in India.<br>- Non-agricultural property to an NRI or OCI. | – Not applicable | |
| 25 | Acquire Property | – Any property except agricultural land, farmhouses, or plantations.<br>- Payment via banking channels or non-resident accounts. | – Agricultural land<br>- Farmhouses<br>- Plantations |
| Receive Gifted Property | – Any property except agricultural land, farmhouses, or plantations.<br>- From residents, NRIs, or OCI relatives. | – Agricultural land<br>- Farmhouses<br>- Plantations | |
| Inherit Property | – Any property from non-residents who followed foreign exchange laws or from residents. | – Not applicable | |
| Transfer Property | – Any property to residents in India.<br>- Non-agricultural property to NRIs or OCIs. | – Not applicable | |
| 26 | Jointly Acquire Property with Non-Resident Spouse | – One property (excluding agricultural land, farmhouses, or plantations).<br>- Payment through banking channels via inward remittance or non-resident account. | – Agricultural land<br>- Farmhouses<br>- Plantations<br>- Payment via traveler’s cheque, foreign currency notes, or unauthorized modes |
| Marriage Requirements | – Marriage registered and lasted at least two years before acquisition. | – Not applicable | |
| 27 | Acquire Property for Business | – Property necessary or incidental to business activity.<br>- Must comply with applicable laws.<br>- Declaration with RBI in Form IPI within 90 days. | – Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Hong Kong, Macau, Nepal, Bhutan, or North Korea cannot acquire property without RBI approval (except on leases up to five years). |
| Transfer Property | – May mortgage the property to an authorized dealer as security for borrowing. | – Not applicable | |
| 28 | Property by Foreign Embassies or Diplomats | – Purchase or sell property (excluding agricultural land, plantation property, or farmhouses) with clearance from the Ministry of External Affairs. | – Agricultural land<br>- Plantation property<br>- Farmhouses |
| Payment | – Purchase funded through remittances from abroad via banking channels. | – Not applicable | |
| 29 | Property for Long-Term Visa Holders | – One residential property for self-occupation.<br>- One property for self-employment. | – Property in restricted or protected areas or cantonment areas.<br>- Selling property before acquiring Indian citizenship without prior approval. |
| Conditions | – Must submit declaration of funding source and LTV status.<br>- Copies of property documents to relevant authorities. | – Property involved in anti-India activities may be seized. | |
| 30 | Repatriation of Sale Proceeds | – Allowed for properties acquired as per foreign exchange laws.<br>- Payment made through banking channels, FCNR account, or NRE account.<br>- Limited to two residential properties. | – Without RBI permission, individuals cannot repatriate sale proceeds of any immovable property. |
| Default on External Commercial Borrowing | – Authorized dealers may allow the sale of secured immovable property to an Indian resident.<br>- Sale proceeds can be repatriated only towards outstanding dues of the loan. | – Repatriation towards any other loan. | |
| 31 | Transfer of Immovable Property | – Transfer allowed to a resident in India.<br>- Authorized dealer banks may allow creation of charge on property for external commercial borrowing. | – Transfer without RBI permission, except as provided in the Act or rules. |
| Transfer by Resident Outside India | – Transfer allowed if property acquired in compliance with foreign exchange laws or with RBI permission.<br>- Transaction through banking channels in India. | – Not applicable | |
| 32 | Acquisition or Transfer of Property | – Requires RBI permission for citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong, Macau, or North Korea, except for leases not exceeding five years.<br>- Does not apply to OCIs. | – Acquisition or transfer without RBI permission for specified citizens. |
| 33 | Miscellaneous Regulations | – Transactions through banking channels in India.<br>- Subject to applicable taxes, duties, and levies. | – Not applicable |
Each of the rules here pertain to a particular user.
| Number | Description |
|---|---|
| 24 | Acquisition and transfer of property in India by a NRI or an OCI |
| 25 | Joint acquisition by the spouse of a NRI or an OCI |
| 26 | Acquisition of immovable property for carrying on a permitted activity |
| 27 | Purchase or sale of immovable property by Foreign Embassies or Diplomats or Consulate Generals |
| 28 | Acquisition by a long-term visa holder |
| 29 | Repatriation of sale proceeds |
| 30 | Prohibition on transfer of immovable property in India |
| 31 | Prohibition on acquisition or transfer of immovable property in India by citizens of certain countries |
| 32 | Miscellaneous |
| 33 | Savings |
These descriptions provide a concise overview of the rules specified in Chapter 9 of the document.
Understanding these rules helps ensure compliance with India’s regulations on property transactions involving persons resident outside India. Each rule caters to different scenarios, ensuring proper management and control of foreign involvement in Indian real estate.
