The NRO Account for NRI OCI Real estate is an important aspect to consider when required in instances where you are; Acquiring or Selling property which may involve transferring immovable property in India as well.

Accordingly, it enables you to manage your funds/proceeds related to your property purchase(s) or sale(s) in India in a safe and secure manner.

Therefore, if you are an NRI, OCI with property matters in India it is advisable to be prepared for when you have to accept sales proceeds to avoid any disappointing delays. Or for the purpose of acquiring immovable assets as well as activities of a similar nature.

Acquisition And Transfer Of Immovable Property In India

For instance, detailed below are some examples of the Non Resident Ordinary Rupee Account and immovable property, Acquisition, Transfer/Sale applicable to Non Resident Indian.

If you are a resident outside of India and are a citizen of India (NRI), you can transfer any immovable property other than agricultural or plantation property or farm house to:

a) A person resident outside India who is a citizen of India or
b) A person of Indian origin resident outside India or
c) A person resident in India.

In terms of Acquisition of Immovable property

If you are planning on buying property in India as many NRI, OCI do, you can make Payment for acquisition of property by the following ways;

  • i. Funds received in India through normal banking channels by way of
    inward remittance from any place of India or,
  • ii. Funds held in any non-resident account maintained in accordance with
    the provisions of the Foreign Exchange Management Act, 1999 and the
    regulations made by the Reserve Bank Of India from time to time.

There are a few things you should know about in relation to Non Resident Ordinary Rupee Account – NRI OCI Real Estate; 

What is the full definition – NRO Account

As per the RBI, the full terminology for NRO is as follows;  Non-Resident Ordinary Rupee Account Scheme.

It is a taxable account. The rate of interest varies.

You should remember that it is not an NRE account, these are two different types of account, albeit both for NRI, OCI.

Who can open an NRO Account

You can open an NRO account if you are a resident outside India. The NRO account is used for putting through bonafide transactions in rupees (Reserve Bank Of India).

What Currency Can Be Used With The Account

Specifically, you can use your NRO Account for Indian Rupees only, for example as per sale of your Indian property funds can be paid into your NRO Account by the buyer/agent/representative.

NRO Banks

Given the above, if you are planning on initiating due process, you can open an NRO Account with most of the major Indian banks, such as; ICICI, SBI, P&S Bank, BOB as well as others. Our firm has seen a number of our clients unaware of various aspects in relation to their property sale/transfer in India and this may cause avoidable delays.

NRO Account - NRI OCI Real Estate
NRO Account – NRI OCI Real Estate

Type of Account

Your NRO account will allow the following categories of use;

Savings, Current, Recurring, Fixed Deposit account.

Allowed Credits 

Further, you can use your NRO account for the following credits;

  1. Inward remittances from outside India.
  2. Legitimate dues in India and transfers from other NRO accounts can be actioned.
  3. Gift of Rupees, Loan made by a resident to an NRI, OCI, PIO relative within the limits allowed under the Liberalised Remittance Scheme can also be credited to the account.

Allowed Debits

Also, you can use this account for;

  1. Local payments, transfers to other NRO accounts or remittance of current income abroad.
  2. Apart from these, balances in the NRO account cannot be repatriated abroad except by NRIs and PIOs up to USD 1 million, subject to conditions specified in Foreign Exchange Management (Remittance of Assets) Regulations, 2016.
  3. Funds can be transferred to NRE account within this USD 1 Million facility.

Documents Required

In addition to Indian standard banking requirements to open a new account, the documents required to open your Non Resident Ordinary Account vary from bank to bank. However, expect to provide Proof of Identity, Proof of Address and your PAN card (KYC). More detail about the NRI OCI PAN card has been provided below.

NRI OCI PAN Card Requirement

To open an NRO account you will require a PAN card. A PAN card is necessary for both repatriation of funds as well as to sell, Acquire, Transfer Immovable property in India. Read our segment on PAN Card. For PAN card application services view here.

NRI/PIO Repatriation Of Proceeds – Immovable Property, When Sale Proceeds Are deposited in NRO account

How does this apply to you? (A23/RBI) – From the NRO account, NRI/PIO may repatriate up to USD one million per financial year (April-March), which would also include the sale proceeds of immovable property.

More On Repatriation Of Sales Proceeds From Immovable Asset Sold In India In Our Next Segment

As well as an NRO Account, you may need a Power Of Attorney if you are an NRI, OCI to begin a due course of action for your Immovable assets/property in India. Our Power of Attorney Services can be used from any country for India, whether you are based in the UK, USA, Canada or another country we can assist. Read what our Power Of Attorney Clients have said here;

I decided to go ahead with them and was very satisfied with the service provided. The service was prompt and provided a completed PoA template based on a questionnaire they asked me to fill along with detailed instructions on how to get it notified and attested by the Indian consulate. It proved extremely helpful and the PoA was successfully registered and used subsequently in India. It was well worth the price I paid for their services and would definitely highly recommend. 18 November 2022, Mr.K Tiwari, London.

Frequently Asked Questions

Can a Foreign National who is not of Indian Origin purchase an immovable asset in India?

As per the MEA, FN of Non Indian Origin Resident outside of India are not permitted to acquire any immovable property in India unless such property is acquired by way of inheritance from a person who was a resident in India.

Can a Foreign National who is not of Indian Origin if by way of inheritance has acquired immovable property in India, transfer it to someone else?

They can do so only with the specific approval of RBI, a foreign national that falls under this category cannot transfer such property without prior permission of RBI.

How many residential/commercial properties can NRI/PIO purchase under the general permission?

Currently, there are no restrictions on the number of residential/commercial properties that can be purchased in India.

Whether immovable property in India can be acquired by way of gift?

Yes, NRls and PIOs can freely acquire immovable property by way of gift either from;
i) a person resident in India or ii) an NRI or iii) a PIO. (It can only be commercial or residential). Agricultural land/plantation property/ farm house in India cannot be acquired by way of gift. (b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India through gift.

What account can a tourist visiting India open in India?

You can open an NRO (current/ savings) account, for foreign nationals of non-Indian origin visiting India. You can remit funds from outside India through banking channels or by sale of foreign exchange brought by you to India.

Can I, being either NRI or OCI/PIO repatriate my NRO account?

Yes you can up to USD 1 million, subject to conditions specified in Foreign Exchange Management (Remittance of Assets) Regulations, 2016.

Related Links 

We can also assist with the following NRI Services in London:

  • Illegal occupation of property in India
  • Family Settlements and partition of NRI Indian property
  • Ancestral real estate and inheritance advisory under Indian law
  • NRI Property Transfer
  • Possession of NRI Property
  • Recovery of NRI money under Indian Law
  • NRI Succession Certificate in India
  • Injunction against alienation of NRI property in India
  • Developer Claims under the Consumer Protection Act in India
  • NRI property disputes
  • Visas to India
  • Indian Power of Attorney
  • NRI PAN  Card
  • Overseas Citizenship of India (OCI)
  • Inter-Country Adoption
  • Divorce proceedings under Indian Law for parties settled abroad

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