Adyah Group

NRI RBI Guidelines

Acquisition and Transfer of Immovable Property in India by Persons Resident Outside India

The acquisition of immovable property in India by persons residing outside the country is governed by Section 6(3)(i) of the Foreign Exchange Management Act (FEMA), 1999, along with relevant RBI regulations issued under Notification No. FEMA 21/2000-RB dated May 3, 2000, and subsequent amendments.


Categories of Eligible Persons:

Persons resident outside India are classified as:

  • • Non-Resident Indians (NRIs)
  • • Persons of Indian Origin (PIOs)
  • • Foreign nationals of non-Indian origin

In addition, foreign nationals residing in India (but not Indian citizens) are also subject to the applicable regulations.


Statutory Provision:

As per Section 6(5) of FEMA 1999, a person residing outside India is permitted to hold, own, transfer, or invest in Indian currency, securities, or immovable property in India, if the asset was:

  • • Acquired when they were a resident in India, or
  • • Inherited from a person who was a resident in India.

Permissible Property Acquisition:

Under Notification No. FEMA 21, NRIs and PIOs are allowed to acquire immovable property in India, excluding:

  • • Agricultural land
  • • Plantation property
  • • Farmhouses

Foreign Companies:

Foreign companies permitted to establish offices in India may acquire property required for, or incidental to, their business activities. This exemption does not apply to liaison offices.


Relevant Amendments:

The original FEMA 21 notification has been amended through various notifications:

  • • FEMA 64/2002-RB (dated June 29, 2002)
  • • FEMA 65/2002-RB (dated June 29, 2002)
  • • FEMA 93/2003-RB (dated June 9, 2003)
  • • FEMA 146/2006-RB (dated February 10, 2006)
  • (Refer A.P. (DIR Series) Circular No. 5 dated August 16, 2006)

All notifications can be accessed via the official RBI FEMA website: www.fema.rbi.org.in


Exemptions and Residency Considerations:

Restrictions on acquiring property do not apply if:

  • • The property is leased for a period not exceeding 5 years, or
  • • The person qualifies as a resident in India under FEMA Section 2(v).

However, citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan require prior RBI approval to acquire or transfer immovable property in India (except for leases under 5 years).


Repatriation Guidelines:

NRIs/PIOs can repatriate up to USD 1 million per financial year (April–March) from their NRO accounts, subject to applicable tax compliance. This includes proceeds from assets acquired via inheritance or settlement.


Clarifications and Further Guidance:

Although the legal framework is defined, RBI frequently receives operational queries about property acquisition, holding, sale, and remittance by non-residents and foreign nationals residing in India. To assist, RBI has compiled a list of FAQs addressing common concerns.


For unresolved matters, inquiries can be directed to:

Chief General Manager-in-Charge, Foreign Exchange Department – Foreign Investment Division, Reserve Bank of India, Central Office Mumbai – 400 001