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The Reserve Bank of India regulates the acquisition and transfer of immovable property by residents outside India and Indian residents under the Foreign Exchange Management Act, 1999. Non-Resident Indians and Overseas Citizens of India may acquire or transfer specific properties in India through banking channels subject to set conditions. Foreign embassies, diplomats, long-term visa holders from specific countries, and foreign businesses undertaking permitted activities must follow defined procedures, restrictions, and reporting duties. Citizens of designated countries require prior approval for property transactions. Sale proceeds repatriation follows established limits and foreign exchange rules.
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RBI/FED/2015-16/7 FED Master Direction No. 12/2015-16 January 1, 2016 [ Updated as on September 01, 2022 ] [ Updated as on June 6, 2022 ] [ Updated as on April 11, 2018 ] [Updated as on February 4, 2016 * ] To, All Category - I Authorised Dealer banks and Authorised Banks Madam/ Sir Master Direction – Acquisition or Transfer of Immovable Property under Foreign Exchange Management Act, 1999 Acquisition or transfer of immovable property by Indian residents outside India and Non-residents in India is regulated in terms of sub-sections 2.(a) , (4) and (5) of section 6 of the Foreign Exchange Management Act, 1999 (FEMA) read with 1 Rule 21 of Foreign Exchange Management (Overseas Investment) Rules, 2022 dated August 22, 2022 and paragraph 25 of the Foreign Exchange Management (Overseas Investment) Directions, 2022 dated August 22, 2022 and 2 Foreign Exchange Management (Non-debt Instruments) Rules, 2019, dated October 17, 2019 , respectively. These Rules and Regulations are amended from time to time to incorporate the changes in the regulatory framework and published through amendment notifications.
Within the contours of the Rules and Regulations, Reserve Bank of India also issues directions to Authorised Persons under Section 11 of the Foreign Exchange Management Act (FEMA), 1999. These directions lay down the modalities as to how the foreign exchange business has to be conducted by the Authorised Persons with their customers/constituents with a view to implementing the regulations framed.
Instructions issued on acquisition of immovable property have been compiled in this Master Direction. The list of underlying circulars/ Rules and Regulations which form the basis of this Master Direction is furnished in the Appendix . Reporting instructions can be found in Master Directions on reporting ( Master Direction No. 18 dated January 1, 2016 )
It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Rules, Regulations or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Master Direction issued herewith shall be amended suitably simultaneously.
Yours faithfully
( Vivek Srivastava ) Chief General Manager
Master Direction 12/ 2015-16 - Acquisition or Transfer of Immovable Property under Foreign Exchange Management Act, 1999
Part I - Acquisition or Transfer of Immovable Property outside India by a person resident in India
The acquisition or transfer of immovable property outside India by a person resident in India shall be governed by the provisions contained under Rule 21 of the Foreign Exchange Management (Overseas Investment) Rules, 2022 dated August 22, 2022 and paragraph 25 of the Foreign Exchange Management (Overseas Investment) Directions, 2022 dated August 22, 2022 .
Part II - Acquisition or Transfer of Immovable Property in India
1.1 The FEMA 1999 empowers the Central Government to prescribe, in consultation with the RBI, rules pertaining to capital account transactions, not involving debt instruments. The Central Government has, accordingly, notified the 5 Foreign Exchange Management (Non-debt Instruments) Rules, 2019, dated October 17, 2019 , as amended from time to time, in supersession of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 . These Rules do not apply to acquisition or transfer of immovable property in India by a person resident outside India on a lease not exceeding five years.
1.2 As per section 6(5) of FEMA, a person resident outside India can hold, own, transfer or invest in any immovable property situated in India if such property was acquired, held or owned by him/ her when he/ she was resident in India or inherited from a person resident in India.
Some key terms used in the Rules are given below:
2.1 6 A ‘Non-Resident Indian’ (NRI) is a person resident outside India who is a citizen of India.
2.2 7 An ‘Overseas Citizen of India (OCI)’ is a person resident outside India who is registered as an Overseas Citizen of India Cardholder under Section 7(A) of the Citizenship Act, 1955.
2.3 ‘Repatriation outside India’ means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency.
2.4 ‘Transfer’ includes sale, purchase, mortgage, exchange, pledge, gift, loan or any other form of transfer of right, title, possession or lien.
2.5 ‘Relative’ means relative as defined in section 2(77) of the Companies Act, 2013.
3.1 8 Acquisition of immovable property
3.1.1 9 An NRI or an OCI can acquire by way of purchase any immovable property (other than agricultural land/ plantation property/ farm house) in India.
10 3.1.2 An NRI or an OCI can acquire by way of gift any immovable property (other than agricultural land/ plantation property/ farm house) in India from person resident in India or from an NRI or an OCI who is a relative as defined in section 2(77) of the Companies Act, 2013.
11 3.1.3 An NRI or an OCI can acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired the property in accordance with the provisions of the foreign exchange law in force at the time of acquisition.
12 3.1.4 An NRI or an OCI can acquire any immovable property in India by way of inheritance from a person resident in India
3.2 Transfer of immovable property
13 An NRI or an OCI may transfer any immovable property in India to a person resident in India;
14 An NRI or an OCI may transfer any immovable property (other than agricultural land or plantation property or farmhouse ) to an NRI or
15 an OCI.
In case the transfer is by way of gift, the transferee should be a relative as defined in section 2(77) of the Companies Act, 2013.
3.3 Payment for Acquisition of Immovable Property
16 NRIs or OCIs may make payment, if any, for transfer of immovable property out of funds received in India through banking channels by way of inward remittance from any place outside India or by debit to their NRE/ FCNR (B)/ NRO account;
Such payments cannot be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.
4.1 A person resident outside India, not being a Non-Resident Indian or an Overseas Citizen of India, who is a spouse of a Non-Resident Indian or an Overseas Citizen of India may acquire one immovable property (other than agricultural land/ farm house/ plantation property), jointly with his/ her NRI/ OCI spouse.
4.2 Consideration for transfers made under this para should be out of funds received in India through banking channels by way of inward remittance from any place outside India or by debit to non-resident account of the person concerned maintained in accordance with the Act or the rules framed thereunder. Payments cannot be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned in this para.
