India is growing rapidly and has much to offer. As a result, property values are increasingly becoming a sought-after investment. People living outside of the country, in particular, are looking into the rules in regards to who can and cannot buy property in India. Those who emigrated from the country with citizenship in the U.S., for instance, may wonder what the rules would be for them to purchase property in India.
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According to the Reserve Bank of India, the acquisition of property in India by foreign nationals is regulated by Section 6(3)(i) of the Foreign Exchange Management Act (FEMA) 1999. This regulation covers the acquisition and transfer of property in India.
According this act, a person residing outside of India can hold property in India if it was acquired while a resident in India or the property was inherited from someone who was a resident. The act states that people who are not residents of India and not of Indian origin are not permitted to own property in the country.
According to Buy Association, a foreign national must be a resident of India for 183 days in a financial year to be allowed to purchase property. This can be challenging since a tourist visa lasts 180 days.
Foreign nationals cannot circumvent the residency requirement through the operation of an Indian-registered company, according to Buy Association). It also is illegal to try to become a joint property owner in India with someone who does qualify.
NRIs and PIOs
Non-resident Indians (NRIs) and persons of Indian origin (PIOs) can purchase property in India without residency.
NRIs have an Indian passport and nationality, although they have emigrated from the country. The PIO status allows for someone of Indian origin for up to four generations to be allowed to purchase property in India. This inclusion has fuelled much of the property boom in India.
The Indian government introduced the Overseas Citizenship of India (OCI) plan to permit a type of dual nationality to NRIs and PIOs. The PIO status is expected to eventually be replaced by the OCI status.
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