FAQs for NRI: Selling, Transferring Commercial Property in India

1. Under general permission available, to whom can a NRI transfer by way of sale his commercial property?
NRI can transfer by way of sale commercial property in India to a person resident in India or to a NRI or a PIO.

2. Under the general permission available to whom can a PIO transfer his commercial property by way of sale?
PIO can transfer by way of sale commercial property in India only to a person resident in India.

3. Can a PIO transfer by way of sale his commercial property to a NRI or a PIO?
No. He would need to seek the RBI's prior approval for transfer by way of sale of commercial property in India to a NRI or a PIO.

4. Do NRIs require permission to transfer any commercial property in India to a person resident in India?
No specific permission is required by Non-resident Indians to transfer any commercial property in India to a person resident in India.

5. Do NRIs require permission to transfer any commercial property to a person of Indian origin resident outside India/Non-resident Indian?
No specific permission is required for said transfer of any commercial property.

6. Under general permission available can a NRI / PIO transfer his commercial property by way of gift?
Yes. NRI / PIO may transfer by way of gift commercial property in India to a person resident in India or to a NRI or a PIO.

7. Can refund of application / earnest money / purchase consideration made by the builder / seller on account of non-allotment of commercial space / cancellation of bookings / deals for purchase of commercial property together with interest, if any (net of income tax payable thereon) be credited to NRE account ?
Yes, provided original payment was made by way of inward remittance or by debit to NRE / FCNR (B) account. For this purpose no permission of Reserve Bank is required and they may approach the authorized dealer directly in the matter.

8. Can sale proceeds of any commercial property inherited by NRI / PIO from a person resident in India be remitted abroad?
Yes. Amount not exceeding USD one million, per calendar year subject to production of documentary evidence in support of inheritance and Tax clearance certificate / no objection certificate; can be taken from the Income Tax authority to the authorized dealer for remittances.

However, if a PIO is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China or Iran he should seek prior approval of the RBI with documentary evidence in support of inheritance and tax clearance / no objection certificate from the Income Tax authority. This remittance facility is not available to a citizen of Nepal or Bhutan.

9. Can sale proceeds of any commercial property in India inherited by a NRI or PIO from a person resident outside India be repatriated by him or his successor?
No. He needs to seek prior approval of Reserve Bank with documentary evidence in support of inheritance and tax clearance / no objection certificate from the Income Tax authority.

10. Can a NRI who had acquired commercial property in India while he was a person resident in India continue to hold or transfer such property? In which account the sale proceeds may be credited?
Yes, a NRI who had acquired commercial property in India while he was a resident in India may continue to hold such property. Under the general permission available he may transfer by way of sale or gift commercial property in India to a person resident in India or to a NRI / PIO. The sale proceeds may be credited to his NRO account.

11. Can a PIO who had acquired commercial property in India while he was resident in India continue to hold or transfer such property? In which account the sale proceeds may be credited?
Yes, a PIO who had acquired commercial property in India while he was a person resident in India may continue to hold such property. Under the general permission available he may transfer by way of sale or gift commercial property in India to a person resident in India or to a NRI / PIO.

However, if a PIO is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan he should seek prior approval of Reserve Bank for transfer of such immovable property in India. The sale proceeds may be credited to his NRO account.

12. What if such a property was held for less than ten years?
If such a property acquired out of rupee funds is sold after being held for less than ten years, remittance can be made, if the sale proceeds were held for the balance period in NRO account (Savings / Term Deposit) or in any other eligible investment, provided such investment is traced to the sale proceeds of the
immovable property.

13. Can NRIs/PIOs rent out their commercial property in India?
Yes. NRIs/PIOs can freely rent out their property in India without seeking any permission from the Reserve Bank. The rental income being a current account transaction can be repatriated outside India.

14. What about refund of purchase consideration on account of non-allotment of office space/cancellation of bookings/deals in respect of commercial property purchased by NRIs / PIOs in India.
With a view to allow credit to NRE/FCNR account of refund of purchase consideration by seller on account of cancellation of bookings/deals for purchase of commercial property, the RBI has sorted out a few clarifications.

That will be for authorized dealers to allow NRIs and PIOs to credit refund of application/earnest money/ purchase consideration made by the seller on account of non-allotment of office space/cancellation of bookings/deals for purchase of commercial property, together with interest, if any (net of income tax payable thereon, to NRE/FCNR account, provided, the original payment was made out of NRE/FCNR account of the account-holder or remittance from outside India through normal banking channels and the authorized dealer is satisfied about the genuineness of the transaction.

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