A person residing outside India who is a citizen of India or a person outside India who is of Indian origin is an NRI. The definition of Person resident outside India is defined under section 2(w) of Foreign Exchange Management Act, 1999 as "a person who is not resident in India"
A person shall be deemed to be a person not resident in India in the following cases:-
- When the person stays in India for less than or up to 182 days during the preceding financial year
- When a person who has gone out of India or who stays outside India, in either case:
- For or on taking up employment outside India, or
- For carrying on outside India a business or vocation outside India, or
- For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period
The definition of 'Person of Indian Origin' is defined under section 2 (b) of Foreign Exchange Management (borrowing and lending in rupees) Regulations, 2000 and under section 2 (xii) of Foreign Exchange Management (Deposit) Regulations, 2000 as given under:-
"Person of Indian Origin' means a citizen of any country other than Bangladesh or Pakistan, if
- He at any time held an Indian passport; or
- He or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
- The person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b)"
Person of Indian Origin (PIO) for the purpose of acquiring immovable property in India as given under:-
"Person of Indian origin' means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
- At any time, held an Indian passport; or
- Who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)"
The payment of purchase price, if any, should be made out of
- Funds received in India through normal banking channels by way of inward remittance from any place outside India or
- Funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank.
An NRI may acquire any immovable property in India other than agricultural land / farm house plantation property, by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India.An NRI may acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India
- An NRI may transfer any immovable property in India to a person resident in India.
An NRI may transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.
In the event of sale of immovable property, other than agricultural land / farm house / plantation property in India, by a person resident outside India who is a citizen of India / PIO, the repatriation of sale proceeds is restricted to not more than two residential properties subject to certain conditions.
If the property was acquired out of Rupee sources, NRI or PIO may remit an amount of up to USD one million per financial year out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
- Application / earnest money / purchase consideration made by house-building agencies/seller on account of non-allotment of flats / plots and
- Cancellation of booking/deals for purchase of residential/commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNR (B) account/inward remittances.