Clarification regarding purchasing an immovable property in India

Reserve Bank of India has made a clarification regarding purchasing an immovable property in India. RBI has made this clarification for non residents, who are established in India and need to purchase a property. There is a reporting system introduces by RBI, the buyer need to report the RBI, in maximum 90 days from the day of purchase. Full clarification is as under.

RBI/2011/12/399
A.P. (DIR Series) Circular No. 79
February 15, 2012
 To
All Authorised Dealers in Foreign Exchange
Madam / Sir,
Clarification - Purchase of Immovable Property in India –
Reporting requirement
Attention of Authorised Dealer Category-I banks is invited to Regulation 5 of Notification No. FEMA 21/2000-RB viz. Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India), Regulations, 2000 dated May 3, 2000, as amended from time to time. In terms of the above Regulation, when a person resident outside India, who has established in India in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, a branch, office or other place of business, excluding a liaison office, acquires any immovable property in India in accordance with the provision of said regulation, the said person has to file with the Reserve Bank a declaration in the form IPI annexed to those regulations, not later than ninety days from the date of such acquisition. As the form is required to be submitted by such persons only, the form is suitably amended to reflect the position.

2.  It is clarified that the extant regulations do not prescribe any reporting requirements for transactions where a person resident outside India who is a citizen of India or a Person of Indian Origin (PIO) as defined in Regulation 2(c) of Notification No. FEMA 21/2000-RB, ibid, acquire/s immovable property in India in accordance with the said provisions of the aforesaid Notification. Form IPI has been, accordingly, amended for greater clarity..

3. Authorised Dealer Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Meena Hemchandra)Chief General Manager-in-Charge

Annex
[Annex to A.P. (DIR Series) Circular No. 79
dated February 15, 2012]
Form IPI
( See Regulation 5 )
Declaration of immovable property acquired in India by a person resident outside India who has established in India a branch, office or other place of business, excluding a liaison office
Instructions:
  1. The declaration should be completed in duplicate and submitted directly to the Chief General Manager, Foreign Exchange  Department, (Foreign Investment Division), Reserve Bank  of India , Central Office , Mumbai – 400001 within 90 days from the date of acquisition of the immovable property.
  2. This form is not to be submitted by a person resident outside India who is a citizen of India or a Person of Indian Origin (PIO) acquiring immovable property in India under General Permission in accordance with Regulations 3 and 4 of Notification No. FEMA 21/2000-RB dated May 3, 2000.
Documentation:
Certified copies of letter of approval from Reserve Bank obtained under section 6(6) of FEMA, 1999 (42 of 1999).
1

Full name and address of the acquirer who has acquired the immovable property

2
(a)
Description of immovable property
(a)

(b)
 Details of its exact location stating the name of the state, town and municipal/survey number, etc
(b)
3
(a)
Purpose for which the immovable property has been acquired
(a)

(b)
Number and date of Reserve Bank’s permission , if any
(b)
4

Date of acquisition of the immovable property

5
(a)
How the immovable property was acquired i.e. whether by way of purchase or lease
(a)

(b)
Name , citizenship and address of the seller/lessor
(b)

(c)
Amount of purchase price and sources of funds
(c)
I/ We hereby declare that-
(a)    the particulars given above are true and correct to the best of my/our knowledge and belief;
(b)    no portion of the said property has been leased /rented to, or is otherwise being allowed to be used by, any other party.
-------------------------------------
(Signature of Authorised official)
Name:------------------------------
Designation:---------------------
Encls:
Stamp
Place: -------
Date:--------
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