(i) In terms of Section 25 of FERA 1973, Indian nationals resident in India and firms/companies registered/incorporated in India are required to obtain permission of Reserve Bank to acquire, hold, transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise, any immovable property situate outside India.
- NOTES:
- A. These restrictions do not apply to immovable property taken or given on lease for a period not exceeding five years.
B. These regulations will be applicable to acquisition, holding etc. of immovable property in Nepal by Indian nationals resident in India and firms/companies registered/incorporated in India even though the transactions may be settled in Indian rupees.
(ii) By its Notification No. FERA.120/92-RB dated 7th September 1992 issued under Section 25 of FERA 1973, Reserve Bank has granted general permission to Indian nationals to acquire/hold immovable property outside India to the following categories of persons-
(A) Persons returning to India after a minimum continuous stay of one year abroad as persons resident outside India, provided the property has been purchased out of foreign exchange lawfully acquired by them while resident outside India or earned through employment, business or vocation taken up or commenced while resident outside India.
(B) Persons holding the property since prior to 8th July 1947 and for which permission/ licence of Reserve Bank was obtained.
(C) Persons acquiring the property by way of gift or inheritance from persons referred to in category (A) or (B) above and covered by the exemption granted by Reserve Bank, provided in the case of gift, the recipient donee is relative i.e. husband, wife, brother, sister or any lineal ascedant or descendant of the donor and the tax payable thereon, if any, has been paid in India.
The general permission also applies to fresh acquisition (which includes holding/disposal) of properties out of foreign exchange held by such persons in terms of general permission granted by Reserve Bank, vide paragraph 12.3(B). Income on such properties can also be credited to their foreign currency accounts abroad. In the case of persons referred to in category (A) above, the income can also be credited to their RFC accounts maintained with an authorised dealer in India (see paragraph 14E.7).
(iii) Indian nationals resident in India who are not eligible for the general permission and holding or becoming owners of immovable properties abroad should apply to Reserve Bank in form FAD 1 for permission to hold immovable properties outside India acquired by them.
NOTE: It may be necessary for firms/companies registered in India desiring to establish offices abroad to acquire or take on long lease, immovable properties outside India. In cases where applications for establishing offices abroad are approved, permission for acquiring immovable properties required for establishing the offices will be considered.