Commercial, Residential, Rental Properties in India
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NRI Repatriation

Repatriation: The term refers to the process of converting foreign currency back into the currency used in one’s own country. 
An NRI may acquire immovable property in India other than agricultural/plantation property or a farmhouse out of repatriable and non-repatriable funds. In respect of such investments NRIs are eligible to repatriate:

1) Sale proceeds of immovable property acquired in India to the extent of repatriable funds used for acquiring the property, without any lock-in period, upto two residential properties. The balance will be repatriable through NRO Account subject to conditions**
2) Refund of (a) application / earnest money / purchase consideration made by house-building agencies/seller on account of non-allotment of flats / plots and (b) cancellation of booking/deals for purchase of residential/commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNR(B) account/inward remittances.
3) Housing Loan in rupees availed of by NRIs from ADs / Housing Financial Institutions can be repaid by the close relatives in India of the borrower.

** Authorized Dealers can allow remittance/s upto USD 1 million, for bonafide purposes, per calendar year from balances in NRO accounts subject to payment of applicable taxes. The limit of USD 1 million per year includes sale proceeds of immovable properties held by NRIs/PIO for a period of 10 years. In case a property is sold after being held for less than 10 years, remittance can be made if the sale proceeds have been held by the NRI/PIO for the balance period in eligible investments.

Repatriation Procedures
Earning money on foreign soil is one of the prime reasons encouraging people to scout abroad opportunities. However, every Non Resident Indian (NRI) feels eager to repatriate his current income and rupee assets or to acquire it as convertible Forex India.

With simplification of repatriation of sale proceeds and rental income, every NRI and persons of Indian origin (PIO) making investments in Indian real estate has reasons to smile. The RBI has further delegated the powers to authorized dealers of foreign exchange to process the application and effect repatriation. The Indian government has enacted statute setting some directives to facilitate NRI repatriation to India.

1) Current Income Repatriation

This embraces earnings from any business by any NRI as owner, or joint venture in India.

All the proceeding involving an investment of any kind including dividends, rent, Mutual Fund distribution from any type of deposit, or properties is permitted for repatriation net of applicable taxes by NRIs to the debit of NRO accounts.

This also covers earnings from business in India by a Non-resident as proprietor, Partner or joint venture.
2) Immovable Property

The sale proceedings of the real estate are allowed for repatriation as under:

3) Without RBI permission

NRIs/PIOs have been given the permission to repatriate the capital in their NRO account up to US$ 100000 per financial year where proceedings from the sale of immovable property held by them for period of not less than 10 years is liable to taxes.

The repatriation of sale proceeds is restricted to not more than two such properties and any number of commercial properties bought by NRIs with foreign exchange funds and sold after at least 3 years can be easily repatriated after acquiring general permission for the same from RBI. However, permission from RBI requires to be sought within 90 days of the sale of the property. 

Further, repatriation of sale proceeds of any immovable property other than agricultural and/or plantation property/farm house by an NRI/PIO is permitted without RBI’s prior approval (including credit to RFC, NRE or FCNR Accounts to repatriate outside India).

But, if the suggestions of the Associated Chambers of Commerce and Industry of India (ASSOCHAM) study are to be followed, NRIs could soon get rights to own farmland property.
4) Inheritance Legacy or Bequest

The sale proceeds can be allowed for repatriation only under the following conditions:

5) Without RBI Approval:

NRIs/PIOs are allowed to remit up to US$ 1, 00,000 each year out of the properties they hold in India by way of inheritance and legacies. The limit has been extended to an amount of US$ 1 million.  It covers remittances of proceeds of immovable property in hold or more than 10 years, remittance for education and medical uses.

6) With RBI Permission:

Any NRI holding immovable property in India, who does not match the eligibility criteria, mentioned under clause I require seeking the permission from RBI to repatriate such property’s sale proceeds.

7) Other assets (Without repatriation rights)

Proceedings from the sale or realization of NRI assets are permitted for repatriation as under:

  Any deposits with banks/firms/companies
  Provident Fund/ Superannuation Balance
  Life Insurance Maturity proceeds/claims
  Earnings from the sale of shares and securities
  Other assets or immovable properties

NRI repatriation is permitted (Net of tax) only by getting special permission from the RBI on the ground of hardship etc. and subject to conditions as laid under the permission.

8) NRIs/PIOs are permitted to repatriate the funds held in their NRO A/c to:
  Provide education facilities and services to their children, where they can spend up to US$ 30000 per academic year.
  Meet the medical expenditure abroad of the account holder or his family members up to US$ 100000.

As such, the above mentioned individual limits has been increased to an overall limit of US$ 1 million, which has been made effective from 13th January 2003 subject to further analyzed by RBI. (The amount can be considered aggregate of remittances of proceeds of immovable property acquired for more than 10 years, proceeds of inherited property, remittance for education and medical purposes).

9) Sending or receiving the gifts

There is no restriction put on sending and receiving gifts of properties by NRIs. Also, PIOs are allowed to acquire or dispose off gifts from or to a relative without obtaining any permission from RBI. 

100 percent Repatriation: A reason to rejoice
The Government of India has recently allowed 100 percent repatriations. This has been a reason to rejoice and has encouraged NRIs to invest in India. Now, NRIs proceeds can be repatriated provided the amount does not exceed either the amount paid for acquiring the immovable property in foreign exchange received from overseas or the amount paid from the FCNR account. The same applies for the foreign currency equivalent of the amount paid from the funds held in NRE account for acquisition of the property.

- NRI Investment in India
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- NRI Remittance
- NRI Repatriation
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