Non-resident Indians planning to buy property in India jointly with their spouse holding foreign passports could soon be allowed to do so.
The Reserve Bank of India is planning to relax the restrictions under the Foreign Exchange Management Act (FEMA), which make such acquisitions difficult.
Currently if an NRI wants to buy a house or any other real estate as a joint property with a foreign citizen spouse it is dealt as a special one needing a prior permission from the RBI on a case-by-case basis.
But RBI executive director, G Padmanabhan has said he has asked for a review of these rules. “This is an issue that requires examination in consultation with the Government of India. In fact, I have directed a comprehensive review of FEMA 21(notification) under which such transactions are dealt with,” he said.
Padmanabhan said there has been a spurt in such applications but because each needs a specific permission from RBI, the process takes time.
The regulation he referred to is Notification No. FEMA 21/2000 that specifies the rules which permit an NRI or a Person of Indian Origin (PIO) to acquire immovable property in India, other than agricultural land or, plantation property or farm house.
The rules also apply to foreign companies that have been permitted to open a branch or a project office in India provided the purchase is necessary to carry on their business.
But foreign nationals even if married to an NRI cannot buy immovable property in India, unless the person can provide a proof that s/he has been a “resident of India” as per FEMA rules. With the renewal of interest in Indian investments, a number of NRIs have planned to buy homes in India. But the restrictions on foreign nationals mean the NRI has to buy and plan to dispose of the property as the sole owner.