| |
INVESTMENT IN IMMOVABLE PROPERTIES WITH REPATRIATION BENEFITS
|
|
|
Investment by NRIs in immovable properties in India did not carry repatriation benefits until May, 1993. The Reserve Bank of India (RBI), has since permitted Non Resident Indian Nationals and Foreign Nationals of Indian origin to invest in any immovable property (either residential or commercial), with repatriation benefits. The benefit of repatriation can be availed of by the investor subject to the following conditions:
-
The purchase consideration is met through foreign exchange remittances or out of NRE / FCNR A/c balances.
- The investor has, submitted a Declaration in Form IPI -7 to the RBI within 90 days from the date of acquisition of the property indicating the relevant particulars of the investment.
- The sale takes place after 3 years from the date of acquisition or from the date of payment of final instalment of the consideration amount, whichever is later.
- The repatriation will be allowed to the extent of the consideration amount equivalent in foreign exchange, which was paid at the time of acquisition of the property. Moreover, in case of sale of residential properties, the repatriation benefit shall not be granted beyond the sale of two such properties.
- The investor applies to the RBI in Form IPI-8 for seeking repatriation of the permissible portion of the sale proceeds.
|
| |
NRI INVESTMENT ON NON-REPATRIATION BASIS
|
|
NRIs can freely invest on non-repatriation basis in proprietary concerns, partnership firms or limited companies, which are engaged in any business excepting agriculture/plantation activity or real estate business (i.e. dealing in land and immovable property with a view to earning profit therefrom).
They can also invest in Non-Resident Ordinary (NRO) or Non-Resident Non-Repatriable (NRNR) Bank Accounts. Investment on non-repatriation basis can also be made in Units, Bonds, Securities, etc. and also under the Portfolio Investment Scheme in shares/debentures of companies through stock exchanges in India.
|
| |
|
BENEFIT OF REPATRIATION OF INCOME ON NON-REPATRIABLE INVESTMENTS |
At present NRIs and OCBs are permitted to make investments in partnership/proprietorship concerns, shares/debentures of Indian Companies, Units of Mutual Funds, deposits with Banks and Companies, real estate etc. on non-repatriation basis. Moreover, Investments held in India by Indian Citizens who become non-residents on account of their going abroad are treated as investments under the non-repatriation category. The RBI in major relaxation has announced in August, 1994 that income on all such investments held on non-repatriation basis, will now be allowed to be repatriated in a phased manner for a three year period as indicated below:
- With immediate effect, such income accruing in the financial year 1994-95 and onwards to the extent of U.S. $ 1,000 per annum is remittable.
- Income earned over and above US$ 1,000 in a year would be allowed to be remitted as follows :
- one-third of the annual income earned during the financial year 1994-95;
- two-third of the annual income earned during the financial year 1995-96; and
- the entire income earned during the financial year 1996-97 and onwards.
- Remittance of income as stated above would be allowed only after the payment of tax as per the provisions of the Income Tax Act.
- For this purpose, the concerned NRI/OCB should designate a branch of an authorized dealer through whom such remittance of income is sought to be made and approach to the concerned office of the Reserve Bank under whose jurisdiction the designated branch is situated for necessary permission.
However, the principal amount of the investment made/held on non-repatriation basis will not be allowed to be repatriated abroad.
|
| |
 |
|
