1. Who is an NRI / PIO / OCI?
Non Resident Indian (NRI) is a citizen of India, who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Non-resident foreign citizens of Indian Origin are treated at par with Non Resident Indian (NRIs).
2. Who is an PIO?
Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
(a) At any time, held Indian passport, or
(b) Who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)
3. Who is an OIC?
Overseas citizen of India(OIC).
(a) Any person of full age and capacity:
(i) Who is a citizen of another country, but was a citizen of India at the time of, or at any time after, the commencement of the constitution, or
(ii) Who is a citizen of another country, but was eligible to become a citizen of India at the time of the commencement of the constitution, or
(iii) Who is a citizen of another country, but belongs to a territory that became part of India after the 15th Day of August, 1947.
(iv) Who is a child of such a citizen, or
(b) A person, who is minor child of a person mentioned in
Provided that no person, who is or had been a citizen of Pakistan, Bangladesh shall be eligible for registration as an Overseas Citizen of India.
4. Does an NRI need RBI permission to acquire residential or commercial property in India?
No permission is required if an NRI wants to acquire any immovable property in India, except if it is agricultural / plantation property or a farmhouse.
5. Can a person of Indian origin residing outside the country acquire commercial property in India?
People of Indian origin residing outside India can acquire properties apart from agricultural land. However, the payment must be made out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers NRE / FCNR accounts maintained with a bank in India. A declaration also has to be submitted to the Central Office of the RBI (form IPI 7) within 90 days from the date of purchase or of final payment.
6. Do foreign citizens of Indian origin require permission RBI permission to purchase immovable property in India for their residential use?
No permission is required to purchase residential property, unless it is agricultural / plantation land or a farmhouse. However, the payment must be made out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers non-resident accounts maintained with a bank in India.
7. If a person of Indian origin residing outside India wants to sell property in India, are sales proceeds allowed to be remitted out of India?
This is allowed if the property has been purchased on or before 26th May, 1993. But the property must be sold at least three years after the date of the final purchase deed or the date of payment of the final payment installment, whichever is later. An application (form IPI8) also has to be made to the Central Office of Reserve Bank within 90 days of the sale of the property.
8. How can an NRI / PIO make payment for purchase of residential / commercial property in India?
Payment can be made by NRI / PIO out of:
funds remitted to India through normal banking channels or
funds held in NRE / FCNR (B) / NRO account maintained in India
No payment can be made either by traveler’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.
9. Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds?
Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.
10. How does the Double Taxation Avoidance Agreement work in the context of tax on income and Capital Gains tax paid in India by NRI?
India has DTAAs with several countries which give a favorable tax treatment in respect of certain heads of income. However, in case of sale of immovable property, the DTAA with most countries provide that the capital gains will be taxed in the country where the immovable property is situated. Hence, the non-resident will be subject to tax in India on the capital gains which arise on the sale of immovable property in India. Letting of immovable property in India would be taxed in India under most tax treaties in view of the fact that the property is situated in India.
11. Can residential / commercial property be mortgaged by NRI/ PIO?
NRI / PIO can mortgage a residential / commercial property to:
a) An Authorized Dealer / the housing finance institution in India without the approval of Reserve Bank.
b) Bank abroad, with the prior approval of the Reserve Bank.
A foreign national of non-Indian origin can mortgage a residential / commercial property only with prior approval of the Reserve Bank.
12. Are any documents required to be filed with the Reserve Bank after the purchase?
No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank
Please refer to the link below for detailed information,
Home Loan Eligibility criteria By various Banks
Your Home Loan eligibility is determined by your repayment capacity, taking into consideration, factors such as:
- Spouse’s income
- No.of dependants
- Stability and continuity of occupation
- Savings history
The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.
General Documents For Home Loans
Generally the documents required to processing your loan application are almost similar across all the banks; however they may differ with various banks depending upon specific requirement etc. Following documents are required by financial institutions to process the loan application:
- Age Proof
- Address Proof
- Income Proof of the applicant & co-applicant
- Last 6 months bank A/C statement
- Passport size photograph of the applicant & co-applicants
- Employment certificate from the employer (If Salaried)
- Copies of pay slips for last few months and TDS certificate (If Salaried)
- Latest Form 16 issued by employer Bank statements (If Salaried)
- Copy of audited financial statements for the last 2 years (If Self Employed)
- Copy of partnership deed if it is a partnership firm or copy of memorandum of association and articles of association if it is a company (If Self Employed)
- Profit and loss account for the last few years (If Self Employed)
- Income tax assessment order (If Self Employed)
Home Loan Process & Various Steps Involved
There are various steps involved in getting a Home Loan from selecting your property to filling up the loan application. Following are the various stages in Home Loan:
- The first step involved in the process is to find your property depending on all your needs, post that collect the necessary price sheets & you can start searching for the lender who can offer the best Home Loan deal after checking your eligibility criteria.
- Know the Home Loan Eligibility: Banks offer the loan amount only after checking your profile & based on various eligibility criterias like age, income, assets & salary banks lend you the money.
- Select the Best Home Loan after evaluation: Comparing home loan interest rates is the primary feature in the home loan selection, however other fees & charges like Application fees, processing fees, legal charges, should not be neglected when comparing various loan offers. Read through all the terms and conditions of the loan like pre payment penalties
- Applying for the Loan : After you have selected your lender, you have to fill in the application form wherein the lender requires complete information about your financial assets & liabilities; other personal & professional details together with the property details & its costs.
- Documentation & Verification Process: You are required to submit the necessary documents to the bank which will be verified together with the details in the application.
- Credit & default check: Bank also checks credit history through the Cibil Score which plays a critical role in deciding & approving your loan application. Low Credit Score implies that the bank upfront rejects your application on the basis of earlier credit defaults; on the other hand high credit score gives a green signal to your application.
- Bank sanctions Loan & Offer letter to the borrower: After the credit appraisal of the borrower bank decides the final amount & sanctions the loan, the bank further sends an offer letter to the borrower which constitutes the details like rate of interest, loan tenure & repayment options etc.
- Acceptance Copy to the Bank: The borrower needs to send an acceptance copy to the bank after the borrower agrees with the terms & conditions in the offer letter.
- Bank checks the legal documents: The bank further asks the legal documents of property from the borrower to check its authenticity so as to keep them as a security for the loan amount given. The next step involved is the valuation of the property by the bank which determines the loan amount sanctioned by the bank.
- Signing of agreement & the loan disbursal: The borrower signs the loan agreement & the bank disburses the loan amount.
Term in Months