NRI Loan
Loan For NRI
NRIs are recognised under the Foreign Exchange Regulatory Act, 1973.
Every financial institution in India follows the RBI guidelines that define an NRI as - "An Indian citizen who holds a valid document like Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI."
Home loans for NRIs are available for the construction of new residences, purchase of old houses/flats, repairs/renovation/alternations etc. NRIs can also avail of loans by mortgaging an existing residential property. However, basis the Income Tax Act an NRI should have stayed in India for a period of 182 days or more (within an assessment year) or they should have stayed in India for at least a total of one year or more.
The FDI Policy that permits FDI up to 100% from foreign/NRI investor under the automatic route has boosted NRI confidence. Furthermore banks have attractive NRI housing schemes as well.
To qualify for an NRI Home Loan, you need to meet any one of the following criteria
- Indian citizens who stay abroad for employment or for carrying on business or vocation outside India.
- Indian citizens who stay abroad under circumstances indicating an intention for an uncertain duration of stay abroad.
- Government servants who are posted abroad on duty with Indian missions.
- Officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments or posted to branches or offices abroad.
- Indian citizens working abroad on assignments with foreign Governments or regional/international/multinational agencies like UN organisations, the World Bank etc.
- Non-Resident foreign citizens of Indian origin are treated on par with NRIs.
FAQs
Relevant Questions From a NRI
For our NRI clients we have a hotline number which can be reached 24x7 irrespective of your current location. The number is 1800-120-2016. You can also contact us through email at info@suncityprojects.com We have put together the list of most relevant questions from a NRI/PIO's perspective.
Who is classified as a NRI?
Non Resident Indian is a person resident outside India who is either a citizen of India or a person of Indian origin. A NRI is an Indian Citizen who has migrated to another country. For all official purpose the Government of India considers Indian National away from India for more than 182 days, during the course of the preceding financial year.
Who is classified as a PIO?
A Person of Indian Origin means an individual (not being a citizen of the following countries; Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan) who:
- Held an Indian Passport at any time, or
- Who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955
Does NRI/PIO require permission of The Reserve Bank to acquire residential/ commercial property in India?
No
We're just starting out. How can we afford your services?
We started this business from scratch, and know full-well how tight money can be when you are first starting out. We empathize with the struggles of new business owners, and therefore work diligently so that the new businesses that we work with succeed.
The primary criteria we look for when working with new businesses is the seriousness of the business owner. While it is natural for a new business owner to be cautious with the money they spend - we do look for a commitment to growth. If you do not have a specific plan for how you intend to grow your business, then the reality is - you will probably never be in a good position to afford our services.
With that said - if you are growth-minded, then we are happy to help you achieve that growth, and are willing to work with you to come up with a plan that fits within your budget and comfort level. Whether this is a smaller site, financing options, or a payment plan - we are confident that we can figure out something that will be mutually beneficial.
How many residential / commercial properties can NRI / PIO purchase under the general permission?
There are no restrictions on the number of residential / commercial properties that can be purchased.
Do any documents need to be filed with Reserve Bank of India after purchase?
An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents with the Reserve Bank.
Whether immovable property in India can be acquired by way of gift?
Yes, NRIs and PIOs can freely acquire immovable property by way of gift.
Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds?
Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank.
Whether a non-resident can inherit immovable property in India?
Yes
Property Purchase/Sale
Acquisition of Immovable Property in India.
Who can purchase immovable property in India?
Under the general permission available, the following can purchase immovable property in India:
- Non-Resident Indian (NRI)
- Person of Indian Origin (PIO)
The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land / plantation property / farmhouse in India.
Whether NRI/PIO can acquire agricultural land/ plantation property / farm house in India?
Such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India.
How many residential / commercial properties can NRI / PIO purchase under the general permission?
There are no restrictions on the number of residential / commercial properties that can be purchased.
Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?
No.
How can an NRI / PIO make payment for purchase of residential / commercial property in India?
Following options exist for making payment for purchase of the property
- Funds remitted to India through normal banking channel or
- Funds held in NRE / FCNR (B) / NRO account maintained in India
Can NRI / PIO avail of loan from an authorised dealer for acquiring flat / house in India for his own residential use against the security of funds held in his NRE Fixed Deposit account / FCNR (B) account?
Yes, such loans are subject to the terms and conditions as laid down in Schedules 1 and 2 to Notification No. FEMA 5/2000-RB dated May 3, 2000 as amended from time to time.
Such loans can be repaid
Following options exist for making payment for purchase of the property
- by way of inward remittance through normal banking channel or
- by debit to his NRE / FCNR (B) / NRO account or
- out of rental income from such property.
- by the borrower's close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower's loan account.
Can an NRI/ PIO/foreign national sell his residential / commercial property?
Yes. Reserve Bank of India has granted general permission for sale of such property.
Can an agricultural land / plantation property / farm house in India owned / held by a non-resident be sold?
NRI / PIO may sell agricultural land /plantation property/farm house to a person resident in India who is a citizen of India.
Can a non-resident gift his residential / commercial property?
Yes, NRI / PIO may gift residential / commercial property.
Property acquired of foreign Exchange source
In case the amount has been received from inward remittance or debit to NRE/FCNR(B)/NRO account for acquiring the property or for repayment of the loan, the principal amount can be repatriated outside India. Any Capital Gain is credited to NRO A/C. However, repatriation of sale proceeds purchased out of foreign exchange is restricted to not more that two residential properties, in a block of one year.
Property acquired out of Rupee source
In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India ( as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account.
NRI/PIO are also allowed by the Authorised Dealers to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account for all bonafide purposes to the satisfaction of the authorised dealers, subject to tax compliance.
Repatriation of rental income
Repatriation of income derived out of letting of immovable property is permissible. NRI/PIO can rent out the property without approval of Reserve Bank. Rent received can be credited to NRO/NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, interest, dividend etc. of NRI/PIO who do not maintain an NRO account is based on an appropriate certification by Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/ provided for.