General Permission for Acquisition/Disposal of Residential/Commercial Properties by Foreign Citizens of Indian origin

11E.6

(i)

By its Notification No.FERA.152/93-RB dated 26th May 1993, Reserve Bank has granted general permission to foreign citizens of Indian origin, (whether resident in

India or not), to acquire and dispose of immovable properties (other than agricultural land/farm house/plantation property) situate in India subject to the fulfilment of the following conditions:

A.

Acquisition/Disposal of Residential Property/ies in India other than by way of Gift

1.

Property is acquired by way of purchase or inheritance for the person's bona fide residential use and transferred by way of sale. (No restrictions are placed on the number of residential properties that can be acquired/disposed of under the general permission except what is mentioned against condition 6 below).

2.

Consideration for the property purchased is met out of foreign exchange remitted from abroad through normal banking channels or funds withdrawn from the purchaser's NRE/FCNR account maintained with a bank in India.

3.

Property purchased is not let out except where it is not immediately required for the purchaser's own residential use.

4.

A declaration is submitted to Reserve Bank (Central Office) about such acquisition in form IPI-7 within a period of 90 days from such acquisition/final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

5.

Income accruing by way of rent or sale proceeds of the property or income arising out of investment of such proceeds is credited to the person's NRO account (if the property is held by a non-resident foreign citizen of Indian origin) or to the Resident Rupee Account i.e. Q.A.22 Account (if the property is held by a foreign citizen of Indian origin resident in India) with a bank in India.

6.

In respect of residential properties purchased on or after 26th May 1993, Reserve Bank would consider applications for the repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property( only up to two such properties ) provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final instalment of consideration amount, whichever is later. Applications for the purpose should be made to Reserve Bank (Central Office) in form IPI 8 within 90 days of the sale of the property.

B.

Acquisition/Disposal of Residential property by way of Gift

1.

Properties (up to two houses) are acquired, transferred or disposed of by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not.

2.

Gift tax, if any, has been paid.

NOTE:

The word relative has the meaning assigned to it under Section 6 of the Companies Act, 1956 (1 of 1956).

C.

Acquisition by way of purchase or inheritance or Disposal by way of sale of Commercial Property/ies in India

1.

Property (not being agricultural land/farm house/plantation property) situate in India is acquired by way of purchase or inheritance and transferred or disposed of by way of sale (No restrictions are placed on the number of such properties acquired/disposed of under the general permission except what is mentioned against condition 4 below).

2.

Consideration for the property purchased is met out of foreign exchange remitted from abroad through normal banking channels or funds withdrawn from the purchaser's NRE/FCNR account maintained with banks in India.

3.

A declaration is submitted to Reserve Bank (Central Office) about acquisition of the commercial property in form IPI-7 within a period of 90 days from such acquisition/final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

4.

Reserve Bank would consider applications for repatriation of original investment in commercial property in respect of properties purchased on or after 26th May 1993 up to the consideration amount remitted in foreign exchange for the acquisition of the property provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final instalment of consideration amount, whichever is later. The balance amount of sale proceeds of the property/ies should be credited to the seller's NRO account or Resident Rupee Account (Q.A. 22 Account) in the case of resident foreign citizens maintained with a bank in India. Applications for repatriation of the amount should be made to Reserve Bank (Central Office) in form IPI-8 within 90 days of the sale of the property.

(ii)

For the purpose of above general permission, a foreign citizen is deemed to be of

Indian origin if (a) he held an Indian passport at any time, or (b) he or his father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955) provided that the citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka and Nepal shall be deemed to be not of Indian origin.

(iii)

Non-resident Indian nationals are also eligible for the facility regarding repatriation

of sale proceeds of the properties referred in items A.6 and C.4 above of sub-paragraph (i), provided the other conditions referred to in the said sub-paragraph are satisfied.

NOTE:

See paragraph 10C.24A regarding repatriation of income/interest earned during the financial year 1994-95 and onwards.