Under the RBI guidelines, the following categories can freely purchase immovable property in India:

• Non-Resident Indian (NRI) – Citizens of India residing outside India
• Person of Indian Origin (PIO) – Individuals (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who:
  • At any time, held Indian passport, or
  • was a citizen of India by birth or otherwise by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

The general permission, however, covers only purchase of residential and commercial property.

Owners 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 along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

There is no restriction on the number of properties that NRIs can own in India. The most important consideration is that of whether the property purchase is for their own or their family’s actual use, or an investment for rental income and potential capital appreciation

Acquiring property does not fall under the inclusion of income tax. However, any income accrued from the ownership – rent or capital gain arising out of the sale of such property is taxable.

RBI has granted some general permission to certain financial institutions providing home loans and authorized dealers to grant housing loans to NRI nationals for self-occupation, subject to certain conditions. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors’ NRE/FCNR/NRO accounts.

A Power Of Attorney (POA) or letter of attorney is a written authorization to represent or act on another’s behalf in private affairs, business, or some other legal matter.