From the time of the Foreign Exchange Regulation Act (FERA) regime Non-resident Indians (NRIs) are usually very apprehensive while purchasing immovable property in India, their home country. Now that the more sober act the Foreign Exchange Management Act (FEMA), is in place there is a reason to believe that NRI's can invest in Indian property market.
Type of property
The Reserve Bank of India (RBI) has issued a notification granting general permission to NRIs for purchase of residential or commercial property in India without obtaining any clearance from the central bank. Further more there is no restriction on number of residential or commercial properties NRI's can purchase. NRI's still cannot purchase agricultural land, plantation property and even a farmhouse.
Funds
The payment for purchase of property can be made by way of remittance through banking channels from abroad or from money lying in their NRE / NRO or FCNR accounts. The money for purchase of the permitted properties has to come only through banking channels hence the payment cannot be tendered in the form foreign currency notes. NRIs can even raise funds through home loan in Indian rupees. EMI for the home loan can be paid either by direct remittance from abroad or from the money lying in NRE/NRO/FCNR accounts or out of the rent received from such property or money transferred to borrowers account from the account of relatives of such borrower. funds lying in the FCNR or NRE account can be a underlying security for the home loan.
Ownership
The property can be owned either in a single name or jointly with another NRI. A joint owner can not be a permanent resident in India.
If at the time of changing the status from Resident Indian to Non Resident Indian the person owns a property or even an agricultural land or a farm house the same will continued to be owned by him without any hassles.
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