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NRI investment in real estate regulated by FEMA
All NRI investments in real estate or immovable properties are considered transactions that get regulated under the FEMA. This is essential because an NRI would be dealing with foreign exchange. It is considered to be a type of transaction that is bound to have some international financial implications. The current account transactions or capital account transactions of the NRI which are used to make investments in real estate thus get automatically regulated under FEMA. Current Account Transaction consists of payments due as interest on loans and net income from investments
Capital account transactions
The Reserve Bank has granted blanket permission to NRIs to purchase property in India for their residential and commercial purposes. There is also no limit on the number of investments or the number of investments that can be made in real estate. The immovable property can be purchased by inward remittances from any place outside India or through funds maintained in NRI accounts in the banks within the country. FEMA stipulates that before making a purchase a specified form called the IPI 7 needs to be filed with the central office of the RBI along with the title deed or any other certified copy of the document proving that the NRI has executed an agreement to purchase property within the country. The form has to be filed within 90 days of the purchase of the property and has to be accompanied by a bank certificate stating the consideration paid for the purchase. Permissions are generally granted without undue delays if all the relevant papers are submitted.
NRI investment in real estate regulated by FEMA
All NRI investments in real estate or immovable properties are considered transactions that get regulated under the FEMA. This is essential because an NRI would be dealing with foreign exchange. It is considered to be a type of transaction that is bound to have some international financial implications. The current account transactions or capital account transactions of the NRI which are used to make investments in real estate thus get automatically regulated under FEMA. Current Account Transaction consists of payments due as interest on loans and net income from investments
Capital account transactions
The Reserve Bank has granted blanket permission to NRIs to purchase property in India for their residential and commercial purposes. There is also no limit on the number of investments or the number of investments that can be made in real estate. The immovable property can be purchased by inward remittances from any place outside India or through funds maintained in NRI accounts in the banks within the country. FEMA stipulates that before making a purchase a specified form called the IPI 7 needs to be filed with the central office of the RBI along with the title deed or any other certified copy of the document proving that the NRI has executed an agreement to purchase property within the country. The form has to be filed within 90 days of the purchase of the property and has to be accompanied by a bank certificate stating the consideration paid for the purchase. Permissions are generally granted without undue delays if all the relevant papers are submitted.
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