Master Direction – Acquisition or Transfer of Immovable Property under Foreign Exchange Management Act, 1999 (Updated as on September 01, 2022)
UR
- Applies toBanks that handle foreign money
- StatusIn force
- IssuedJan 04, 2016
- Amendmentsnone tracked
- Length36 points in 4 sections · 4 min read
The four dates on this rule
- PublishedJan 04, 2016The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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29 of the 36 points name no product and bind every product. All products.
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Must know
1. Short leases are outside
A lease of five years or less is outside these rules altogether.
BankPulse example. A person takes a shop on a lease of four years. The lease does not exceed five years, so these rules do not touch it. A lease of seven years is inside them.
2. Three kinds are barred
Farm land, plantation land and a farm house may not be bought by either of them.
3. Sales between non-residents
Farm land, plantation land and a farm house may not pass between two non-residents.
4. Cash and cheques barred
Payment may not be made by traveller's cheque or by foreign currency notes.
5. Two years of marriage
The marriage must have lasted two continuous years before the property is bought.
6. Not near restricted areas
The property may not lie in or near a restricted, protected or cantonment area.
7. A liaison office may not
A liaison office is excluded from that permission.
8. Ninety days to report
The branch must file a declaration with the Reserve Bank within ninety days.
9. Old property needs approval
Sale money from property held under section 6(5) may not leave India without RBI approval.
10. The 182-day test
Living in India more than 182 days in the last financial year is only part of the residence test.
Do it
1. How payment is made
Payment must come by inward remittance or by debit to a non-resident account.
2. Marriage must be registered
That marriage must have been registered.
3. A declaration is required
He must declare the source of his funds to the district revenue authority.
4. Papers must show the visa
The registration papers must record his nationality and his long term visa.
5. Police must be told
A copy of the purchase papers must go to the police and to the Home Ministry.
6. Paid in foreign exchange
The price must have been paid in foreign exchange or from a non-resident account.
Background
1. What this book does
This book says who living outside India may buy, hold or sell property in India.
2. Which rules govern
Property in India is governed by the non-debt instrument rules of 2019.
3. Property abroad is elsewhere
Buying property outside India follows the overseas investment rules, not this book.
4. Property owned while resident
A person may keep property he owned or inherited while he was resident in India.
5. Who is a non-resident Indian
A non-resident Indian is an Indian citizen who lives outside India.
6. Who is an overseas citizen
An overseas citizen holds a card issued under the Citizenship Act and lives abroad.
7. What transfer covers
Transfer covers sale, purchase, mortgage, exchange, pledge, gift and loan alike.
8. May buy property
A non-resident Indian or an overseas citizen may buy property in India.
9. May receive a gift
Either may receive property in India as a gift.
10. May inherit from abroad
Either may inherit property from a person living outside India who held it lawfully.
11. May inherit from India
Either may also inherit property from a person resident in India.
12. May sell to a resident
Either may sell any property in India to a person resident in India.
13. One home and one workplace
Such a person may buy one home to live in and one place for his own work.
14. Sale waits for citizenship
He may sell only after becoming an Indian citizen, or with police approval before that.
15. Embassies may buy
A foreign embassy, diplomat or consulate general may buy or sell property here.
16. Government clearance first
That purchase or sale needs clearance from the Ministry of External Affairs.
17. It may be mortgaged
Property so acquired may be mortgaged to an authorised dealer against a borrowing.
18. Home loan repayments count
Loan repayments made from abroad count as foreign exchange for this purpose.
19. Only two homes
Sale money may be sent abroad for no more than two residential properties.
20. Only to a resident buyer
That sale may be made only to a person resident in India.