1. Who is a non - resident Indian (NRI)?
A citizen of India who stays abroad for employment or for carrying out any business for an
uncertain period of time is considered as a non-resident. People who are posted in U.N.
organizations and officials deputed abroad by Central/State Governments and Public Sector
undertakings on temporary assignments are also considered as non-residents. Non-resident
foreign citizens of Indian Origin are treated on par with NRI's and are offered the same
2. What is an OCB?
OCB (Oversees Corporate Bodies) are the bodies that are mainly owned by the individuals of
Indian nationality or origin resident outside India. OCB includes all the overseas
companies, trusts, partnership firms, societies and corporate bodies which are indirectly or
directly owed by at least 60% of individuals of Indian nationality or origin resident
outside India. However, the ownership interest should be actually held by them and not by
3. What are the various facilities available to NRI's?
Various facilities offered to the NRI's are as follows:
• They can maintain their bank accounts in India
• They are allowed to invest in securities/shares/deposits of Indian companies and firms
• They are allowed to invest in immovable properties in India
4. Do non-resident Indian citizens need permission of RBI (Reserve Bank of India) to
acquire residential and commercial property in India ?
NRI's are not required to take any permission of RBI while acquiring any residential and
commercial property in India
5. Do foreign citizens of Indian origin need permission of RBI(Reserve Bank of India)
to purchase immovable property in India for their residential use?
Reserve Bank of India has given permission to the foreign citizens of Indian origin to
purchase immovable property in India for their residential use. Hence, they do not need to
acquire any permission.
6. What are the formalities that are needed to be completed by foreign citizens of
Indian origin while purchasing residential immovable property in India under general
While purchasing a residential immovable property in India, the foreign citizens of Indian
origin are required to file a declaration in form IPI 7 with Central Office of Reserve Bank
at Mumbai within 90 days from the date of purchase of that immovable property. They can also
submit a final payment of purchase consideration along with a certified copy of document
which is an evidence of transaction and the bank certificate of the consideration paid.
7. Can the foreign citizens of Indian origin sale property without the permission of
RBI (Reserve Bank of India)?
Reserve Bank of India has give permission to foreign citizens of Indian origin to sale a
property. However, wherever the property is purchased by them, the funds towards the
purchase consideration should be either remitted to India or the paid out of balances in
8. Can foreign citizens of Indian origin acquire or dispose of residential property by
way of gift?
Reserve Bank of India has given permission to foreign citizens of Indian origin to acquire
or dispose of a residential property by way of gift from or to any relative who is a citizen
of India or a person of Indian origin (in case he is not the citizen of India) subject to
compliance with applicable tax laws.
9. Can foreign citizens of Indian origin acquire commercial properties in India?
Reserve Bank of India has given permission to foreign citizens to acquire commercial
properties in India other than agricultural land/farmhouse/ plantation property.
10. Can the properties (residential/commercial) be given out on rent if not required
for immediate use?
Reserve Bank of India has given permission to rent out any immovable residential/commercial
property in India. However, the rental income or proceeds of any investment of such income
are eligible for repatriation.
11. Are Indian companies allowed to grant loans to their NRI staff?
Reserve Bank of India has given permission to the Indian companies or firms to grant housing
loans to the NRI's. However, there are certain terms and conditions that are needed to be
12. How and where to pay stamp duty in Karnataka?
In Karnataka, you can pay the stamp duty through:
• Impressed stamps from licensed stamp vendors.
• Adhesive stamps.
• By making payment through DD/pay order issued by a nationalized bank or scheduled bank or
• Writing on a plain piece of paper and paying the stamp duty through DD/pay order issued by
a nationalized bank or scheduled bank or challan within two months from the date of
execution and getting it certified from the jurisdictional District Registrar or Sub
13. When should the Stamp duty be paid according to the law in Karnataka?
According to the law in Karnataka, you should pay the stamp duty before or on the date of
executing a document. You can note down the document on a plain piece of paper and pay the
stamp duty through DD/pay order issued by a nationalized bank or scheduled bank or challan
within two months from the date of execution. You will have to get it certified from the Sub
Registrar or jurisdictional District Registrar.
14. What is the procedure to pay the stamp duty in case the document is executed out
of India and is to be used in Karnataka?
It is compulsory to pay the stamp duty within three months from the date of receipt in
India. You will be required to produce the document before the District Registrar and he
will certify the payment.
15. How to prevent the use of fake stamp papers?
Note the document on a plain paper or a Rs.2. Document Sheet. You can pay the stamp duty at
any authorized bank or at the jurisdictional Sub-Registrar Office.
Loans For NRI
If you are a NRI, acquiring a home loan in India can be a complicated and a confusing
process. Go through the following information to understand the process of receiving a home
The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulatory Act,
1973. Every bank and housing finance companies follow the RBI guidelines to define NRI - "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."
Broadly categorized, Non-Resident Indians qualifying for NRI housing loans are:
Indian citizens who stay abroad for employment or for carrying on business or vocation
outside India or for any other purpose in circumstances indicating an indefinite period of
Government servants who are posted abroad on duty with the Indian missions and similar other
agencies set up abroad by the Government of India where the officials draw their salaries
out of Government resources;
Government servants deputed abroad on assignments with foreign Governments or
regional/international agencies like the World Bank, International Monetary Fund (IMF),
World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific
Officials of the State Government and Public Sector Undertakings deputed abroad on temporary
assignments or posted to their branches or offices abroad.
Documents required for Resident Indians as well as for NRIs for getting Home Loans are
different in some respect. Home loans for NRIs are available for construction of new house /
flats, purchase of old house / flat addition / alteration to an existing house and repairs /
renovation etc. NRIs can avail of loans by mortgaging an existing residential property.
However, for availing home loans, NRIs have to fulfill certain conditions according to
provisions of the Income Tax Act. They 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. Banks have attractive NRI housing schemes to accommodate
the housing needs of NRIs. From the stables of HFCs, NRI housing finance plans with suitable
repayment options are available.
Last but not the least, NRIs should take due care while selecting their home loan provider
companies or HFCs. Considering the geographical distances involved, it is significant that
loan seekers associate with a proactive and responsive HFC.
Eligibility For NRI:
The eligibility criteria of NRIs differ from Resident Indians based on a few parameters. The
The loan applicant has to be 21 years of age.
he NRI loan seeker has to be a graduate.
The loan applicant has to have a minimum monthly income of $ 2,000 (although, this criterion
may differ across HFCs). The eligibility is also determined by the stability and continuity
of your employment or business.
The NRI also has to route his EMI (Equated Monthly Installments) cheques through his NRE/NRO
account. He cannot make payments from another source say, his savings account in India.
Number Of Dependants
The number of dependents, assets and liabilities also determines the eligibility of the
An NRI applicant is eligible to get a home loan ranging from a minimum of Rs 5 lakhs to a
maximum of Rs 1 crore, based on the repayment capacity and the cost of the property, which
although is variable by the priorities of the home loan provider. Also Home Loan Tenure for
NRIs is different from Resident Indians. An applicant will be eligible for a maximum of 85%
of the cost of the property or the cost of construction as applicable and 75% of the cost of
land in case of purchase of land, based on the repayment capacity of the borrower.
However, a NRI can enhance his loan eligibility by applying for home loans with a
co-applicant who has a separate source of income. Also, the rate of interest for home loans
to NRIs is higher than those offered to Resident Indians. The difference is to the extent of
0.25%-0.50%. Some HFCs also have an internally earmarked 'negative criterion' for NRI home
loans. As such, the NRIs who hail from locations that are marked as being 'negative' in the
books of HFCs, find it difficult to get a home loan.
RBI Directive Loans:
The Reserve Bank of India (RBI) has clarified that Non-Resident Indians (NRIs) and Persons of
Indian Origin (PIO), purchasing immovable property in India should pay for the acquisition
by funds received in India through normal banking channels by way of inward remittance from
outside the country. The NRIs and Resident Indians can also acquire immovable property in
India other than agricultural property, plantation or a farmhouse. It has issued certain
directive for sanctioning home loans to Non-Resident Indians.
The guidelines provided are:
The home loan amount should not exceed 85% of the cost of the dwelling unit, as the remaining
amount that is 15% needs to be provided an own contribution towards the cost of unit
financed. The cost of dwelling unit which is own contribution financed less the loan amount,
can be met from direct remittances from abroad through normal banking channels, the
Non-Resident (External) [NR(E)] Account and /or Non-Resident (Ordinary) [NR (O)] account in
However, repayment of the loan, comprising of the principal and interest including all the
charges are to be remitted to the HFC from abroad through normal banking channels, the
Non-Resident (External) [NR(E)] Account and /or Non-Resident (Ordinary) [NR (O)] account in
The repayment option for NRIs as they can pay through the funds held in any non-resident
account maintained in accordance with the provisions of the Foreign Exchange Management Act,
1999, and the regulations made by the RBI from time to time. As most of the home loan
provider companies consider the economical stability of the applicant, home loans for NRIs
are quite feasible, because they are well in economic resource.
Documents Required For Loan:
The documentation required to be submitted by the NRIs are different from the Resident
Indians as they are required to submit additional documents, like a copy of the passport, a
copy of the works contract, etc. And of course NRIs have to follow certain eligibility
criteria in order to get Home Loans in India. Another vital document required while
processing an NRI home loan is the power of attorney (POA). The POA is important because,
since the borrower is not based in India; the HFC would need a 'representative' 'in lieu of'
the NRI to deal with and if needed. Although not obligatory, the POA is usually drawn on the
NRI's parents/ wife/children.
The documents needed for obtaining NRI home loans are:
Passport and Visa
A copy of the appointment letter and contract from the company employing the applicant
The labor card/identity card (translated in English and countersigned by the consulate) if
the person is employed in the Middle East Salary certificate (in English) specifying name,
date of joining, designation and salary details
Bank Statements for the last six months
List of Classified documents for Salaried and Self Employed NRI Applicants:
Salaried NRI Applicants
Copy of valid passport showing VISA stamps
Copy of valid visa / work permit / equivalent document supporting the NRI status of the
proposed account holder
Overseas Bank A/C for the last 3 months showing salary credits
Latest contract copy evidencing Salary / Salary Certificate / Wage Slips
Self-Employed NRI Applicants
Passport copy with valid visa stamp
Brief profile of the applicant and business/ Trade license or equivalent document
6 months overseas bank account statement and NRE/ NRO account
Computation of income, P&L account and B/Sheet for last 3 years certified by the C.A. / CPA
or any other relevant authority as the case may be (or equivalent company accounts)
Original title deeds tracing the title of the property for a minimum period of the last 13
Encumbrance Certificate for the last 13 years
Agreement of sale /construction, if any
Receipts for payments made for purchase of the dwelling unit
Approved plan / license
ULC clearance /conversion order etc
Receipts for having invested the margin money through normal banking channels from the
Non-Resident (External) account in India and / or the Non-Resident (Ordinary) account in
Latest tax paid receipt
Allotment letter from the co-operative society / association of apartment owners
Agreement for sale / sale deed /detailed cost estimate from Architect / Engineer for property
to be purchased / constructed /extended / improved Copy of approved drawings of proposed
Photocopy Of PIO CARD:
If the PIO card is not available, photocopies of any of the following documents:
The current passport, with birthplace as 'INDIA' The Indian passport, if held by the
individual earlier Parents/grandparents Indian passport/birth certificate/marriage
certificate substantiating the individuals claim as a person of Indian origin
Permissions And Approvals:
Before a construction can begin, the builder must seek several permissions and approvals from
relevant bodies. Without these clearances, the construction may come under litigation.