A person resident outside India (PROI) who is an Indian citizen is referred to as a Non-Resident Indian (NRI). Whereas, an Overseas Citizen of India(OCI) is a person who lives outside of India who is registered as an OCI under the provision of Section 7A of the Citizenship Act, 1955. Rule 24 and 25 of the Foreign Exchange Management (Non-debt Instruments) Rules 2019, often known as the NDI Rules, govern the acquisition and transfer of a real estate in India by NRI and OCI.
RBI Approval Is Not Required
Currently, NRIs and OCIs are governed by the provisions of The Foreign Exchange Management Act, 1999 (FEMA). As per the latest notification issued on 17th October 2019, under Section 46 of FEMA 1999 Chapter IX of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, NRIs/OCIs do not require prior approval from the Reserve Bank of India(RBI) for the acquisition and transfer of immovable property in India. There are a few exceptions to the norm which cannot be acquired without prior approval. The exceptions are:
1. Land used for agriculture
3. Property on a plantation
What NRI or OCI require prior to purchasing immovable property in India
1. A passport or an OCI card is required for prior purchasing of real estate by NRIs/OCIs. An Indian passport or if you have a PIO (Persons of Indian Origin) card or an OCI card then it can be used for the same.
2. PAN Card is the Personal Identification Number that can be utilized for real estate transactions.
3. As an NRI/OCI is not accessible in India to complete the purchase transaction power of attorney is to be given to complete a property transaction.
Certain Points To Be Taken Into Consideration
Apart from the above-mentioned rules and exceptions, there are further guidelines that need to be taken into consideration while making any agreement. Any direct payment for the acquisition of property in India from an NRI/OCI to another person residing outside of India is not permitted. To help an easier repatriation process, NRI/OCI can obtain a Foreign Inward Remittance Certificate (FIRC) and paperwork confirming loan repayment in foreign currency.