The Reserve Bank of India clarifies that Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) don’t need to take prior approval for buying or selling immovable properties in India.
The Reserve Bank of India has received many queries at its various offices in relation to the acquisition of immovable properties like houses by Overseas Citizens of India (OCIs) after a Supreme Court judgement relating to the Foreign Exchange Management Act. The judgment said that any sale or gift of property by a foreigner without prior permission from the RBI would be unenforceable in law, i.e. invalid.
The order had cited Section 31 of the Foreign Exchange Regulation Act, 1973. The Supreme Court dealt with a property transferred by the widow of a foreigner and owner without seeking RBI’s prior permission. The court had set aside a Karnataka high court’s order in the said case.
RBI said that the concerned Supreme Court Judgement in Civil Appeal 9546 of 2010, dated February 26, 2021, was related to FERA, 1973, which has been repealed under Section 49 of FEMA, 1999.
As per RBI’s press release, NRIs and OCIs are presently governed by Foreign Exchange Management Act (FEMA) 1999 provisions. They do not require RBI’s prior approval to acquire and transfer immovable property in India, other than agricultural land, farmhouse, plantation property.
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