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Most non-resident Indians and persons of Indian origin want to buy a house in India for themselves or for their family. Generally, NRIs/PIOs have a doubt in their mind as to whether they can invest in a residential house property in India by remitting funds from overseas under the current foreign exchange regulations. This article attempts to address those concerns.

Who are NRIs/PIOs?
It is first important to understand how the law defines NRI. NRI refers to an Indian citizen who is residing outside India. PIO here refers to an individual (not being a citizen of select countries such as Pakistan, China and Bangladesh) who at any time held an Indian Passport or whose father or grandfather was a citizen of India.

What can they buy?
They can acquire any immovable property in India other than agricultural land, plantation and farm house. These days a number of options are available to buy houses of international standard with all the facilities such as club house and gymnasium.

Money for that Buy
An NRI/PIO may use his own funds to acquire immovable property. He can also avail of a housing loan for this purpose.

Own funds the NRI s own funds means money received in India by way of inward remittance from overseas out of income earned overseas or personal savings outside India or funds held in non-resident external (NRE) or non-resident ordinary (NRO) or foreign currency (non-resident) (FCNR) bank account.

Housing loans from banks Authorised banks have been permitted to provide a housing loan to an NRI/PIO for acquisition of a residential accommodation in India. This is, however, subject to certain conditions. The quantum of loans, margin money and the period of repayment is at par with the housing loans provided to residents in India; the loan amount cannot be credited to the NRE/FCNR account; it has to be fully secured by equitable mortgage of the property proposed to be acquired, and if necessary, also by lien on the NRI s/PIO s other assets in India; the installment of loan and interest and other charges has to be paid by the NRI/PIO by remittances from outside India through normal banking channels or out of funds in the NRE/FCNR/NRO account in India. In the last case, the loan and interest can also be repaid out of the rental income of such property.

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