Centre has sounded warning to State governments over reports that foreign nationals are buying immovable property illegally in some parts of the country in violation of the rules and regulations under FEMA.
In a recent letter to State governments including Orissa, Centre has intimated that foreign nationals coming to India and staying beyond 182 days on tourists visa or other visa meant for a certain period are illegally acquiring immovable property.
Quoting the warning, Orissa revenue secretary Dr Taradatt in a letter to all district collectors early this week wrote that a foreign national who is residing in India for more than 182 days for taking up employment or carrying on business or for any other purpose indicating his stay for uncertain period may acquire immovable property in India subject to fulfilling certain requirements prescribed by the State authorities.
“To be treated as a ‘person resident of India’ under FEMA, a person has not only to satisfy the condition of period of stay (being more than 182 days during the course of the preceding financial year), but has also to comply with the condition of the purpose of the stay. No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan would acquire or transfer immovable property in India without prior permission of RBI,” the letter said.
The provisions contained in Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulation-21/2000 stipulate that an Indian citizen residing outside India and a Person of Indian Origin residing outside India may acquire immovable property in India other than agricultural land, plantation or farm house.
A foreign company which has established a branch office or other place of business in India under the provision of Foreign Exchange Management (Establishment in India of Branch or office or other place of business) Regulations, 2000 can acquire immovable property in India which is a necessary for or incidental to carrying on such activity, subject to the conditions stipulated in Regulation 5 of Foreign Exchange Management Regulations, 2000.
The Centre made it clear that a foreign national who is residing in India for more than 182 days during the course of the preceding financial year for taking up employment or carrying on business/vacation or for any other purpose indicating his intention to stay for an uncertain period can acquire immovable property in India as he would be a person resident in India as per section 2(v) of the FEMA 1999.
To be treated as person resident in India under FEMA, a person has not only to satisfy the condition of the period of stay, but also his purpose of stay as well as the type of Indian visa granted to him to clearly indicate the intention to stay in India for an uncertain period. In this regard, the intention of stay has to be unambiguously established with supporting documentation including visa.
Orissa has now asked all the district collectors as well as sub-registrars to be extra vigilant in such matters and ensure eligibility under FEMA before registering sale or purchase of immovable properties by foreign nationals and seek necessary declarations and the verify the nature of visa from the intending buyer. The Centre has also asked the States to consider reviewing registration of sale/purchase already made if necessary.