probingeyes

NAKED TRUTH

I am herewith submitting some exerpts of the information which i read, for the benefit of all NRI'S who are investing and who are going to invest in the indian realestate market.In recent years, non-resident Indians (NRIs) have played a very important role in transforming the Indian real estate market. Opening-up of the Indian economy provided them with new opportunities and they have shown a great deal of confidence in the changed set up.Since 1994, NRIs have invested a sizeable amount, of which a big chunk has found its way into the property market. Participation by NRIs has brought about a lot of maturity in the market which in the past had solely banked on the actual users. Of late, the sector is trying to get its acts together. But it will take some
time before things really start looking up.

The Indian realty business is still very much organised and that makes things rather difficult for those who are not much familiar with the intricacies involved. Sunil Ramani,
consultant points out, "Dealing in the market, NRIs often find it not very easy to push through their decisions. That is particularly due to the complex nature of the rules and
regulations that govern the market". In the wake of frequently changing laws, NRIs often fail to take advantage of the emerging opportunities that the market offers of late.

NRIs need to keep themselves abreast with various details as regards the Foreign Exchange Regulation Act, 1973 (FERA), Stamp Duty Act, Registration Act, and direct taxes, etc.

A) RBI permission:
The Foreign Exchange Regulation Act (FERA), 1973 puts no restrictions on NRIs holding Indian passports to acquire any immovable property in India, whether from local funds or
from foreign funds, provided they neither deal in any agricultural activity nor in a real estate business with a view to earn profit or income. Foreign nationals of Indian
origin, whether resident of India or abroad, have also been granted general permission to purchase any immovable property in India other than agricultural land, farm house for their bonafide residential purpose, provided the entire purchase price is paid from foreign funds and other formalities laid down in Notification No. FERA 152/93/RB dated May 26, 1993, are complied with. However, prior permission of the RBI is necessary if a foreign national of Indian origin wants to purchase an immovable property in India for bonafide
residential use from local funds