Property Special 2012

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Gujarat Samachar & Asian Voicewww.abplgroup.com 3

Everyone has a special affinityfor the ‘Second home’

Most loves to own a second home, and when it is a second home the

preference obviously goes to India. Because it is the country of origin

of British-Indians and also a place of guaranteed sunshine and recreation.

You are emotionally involved in investing in your roots. Moreover the real

estate investment in India have proven to give very good returns.

Some years back, a popular Hindi film titled ‘Roti, Kapda Aur Makan’

launched a phase which actually kickstarted the development of real

estate. Real estate activity in India is quietly laying a brick of solid

foundation. It was a faceless industry about 30 years ago, but has gained

much momentum day by day. The latest Real estate research potential in

India is estimated to rise to $102 billion from $14 billion in the next decade.

As per recent Indian real estate research, the average growth rate returns

is 30%, which sparks the tale of this booming industry. In India especially

in Gujarat a rapid growth in real estate sector has been seen in over last

10 years.

Gujarat as a leading state in India has inevitably a better attraction for

investment in this sector. In last few years the residential-rental sector has

also benefited from better legal framework. If the two million British

Indians, (including one million British Gujaratis) are looking for investment

in their place of birth or ancestral homes, it can be said for sure that

Gujarat is an attractive investment option.

For the readers of this magazine in the UK and other developed

economies, most of whom reside in their own residential properties (in

UK, 85% of British Asians reside in their own houses which are higher

than the national average), owning a property in India is not only an

instinct, but an emotional bonding. Hundreds of thousands of the British

(Let’s call them “white British”) own vacation homes in Spain, Portugal,

Greece and other countries. More and more of British Indogenic people

aspire to have a property (apartment / bungalows) and even farmhouses in

India.

Moreover, the Indian Government has taken steps to attract foreign

investments in the real estate sector. The investor friendly policies

encourage offshore investors to own real estate in India. Concrete steps

have been taken to make real estate investment for NRIs an easier task.

They do not require any approvals and need not have to take RBI’s

permission to buy or sell residential or commercial property in India. To

help NRIs get funds for buying their dream home/property in India, RBI

also allows NRIs to take home loans from any banks located in India.

ABPL team in Ahmedabad has produced a special real estate

magazine, which will be immensely informative and knowledgeable guide

to these segments of potential Investors offshore. I am happy that some

inspiring thoughts are available with a very modest effort in this magazine.

Kunal Shah from Ahmedabad and Manish Shah from Vadodara as well as

other members of ABPL team have worked hard for this magazine.

CB Patel

Publisher/Editor

Asian Voice & Gujarat Samachar

Gujarat Samachar & Asian Voice www.abplgroup.com4

Of all the lofty dreams spun around the India growth

story, none is as compelling as its real estate

narrative. From nowhere in the middle of the last

decade, India’s property market has raced like a horse

on steroids to reach a size of $50 billion and is expected

to grow $90 billion by 2015. Indian real estate business

has taken an upturn and is expected to grow from the

current USD 14 billion to 102 billion in the next 10 years.

In every city and town, an endless row of nouveau riche

has surfaced, having traded their land and buildings for

unprecedented sums. It is proving that that real estate is

the surest way of doubling money.

The Indian real estate industry is emerging as one of

the most preferred investment destinations for global

realty and investment firms, says a study conducted

jointly by the Federation of Indian Chamber of

Commerce and Industries (FICCI), the premier industry

body of India having a membership of more than 1,500

companies and more than 500 chambers of commerce

and business associations, and UK-headquartered

professional services firm Ernst & Young (E&Y), which is

one of the world’s big four accounting firms.

Purchasing real estate in India is a rewarding

transaction observing the ever-increasing inclination

towards property prices. The sky-kissing prices of

housing on top of commercial realties crossways the

nation will positively yield immense returns as an

investment transaction.

We have a saying in India that having land is better

than having a bank balance. It’s actually not a fallacy; real

estate investment has turned around the life of many

individuals. The past decade has been a boom time for

investors in real estate as well as builders. The area

surrounding metros like Delhi, Mumbai, Chennai and

Kolkatta are growing by leaps and bound. What does the

real estate boom say: that growth is in, poverty is out?

The branded realtors of the US like Richard Ellis have

come here to cash in on the boom. Office spaces that

have been developed are state of the art and at globally

competitive prices. Since the city land use is choked

with buildings the suburbs is a welcome shift. The NCR

region has decongested Delhi and made it roomier.

An old Indian saying goes, “land is like mother:

never abandon it for money!” The opposite is now true:

land is money in Indian cities. Because of the huge

compensations that have been given to farmers whose

land has been brought under use for development,

urban land is now worth millions.

The India property effervesces has been

magnetizing mammoth investment in property market

and comprises foremost property fund liberates and

management services. The most important suppliers of

realty news create presented resources to facilitate

investors to investigate realties in cities akin to

Ahmedabad, Surat, Rajkot Mumbai, Kolkata, Chennai,

New Delhi, Bangalore, Hyderabad, Noida, Gurgaon,

Pune, and the reminiscent of. The investors can also

notice the property listings for auction and buy of real

estates in a state-wise method for Kerala, Delhi, Goa

and Gujarat.

Current Scenario of the Real Estate Market in India

Commercial real estate sector is in boom in India. In

the last 15 years, post liberalization of the economy,

Indian real estate business has taken an upturn. This

growth can be attributed to favorable demographics,

increasing purchasing power, existence of customer

friendly banks & housing finance companies,

professionalism in real estate and favorable reforms

initiated by the government to attract global investors. ❖

India’s property market racing like a horse

• Purvi Apurva Shah


The economy of India is the tenth

largest in the world by nominal

GDP and the third largest by

purchasing power parity. India

recorded the highest growth rates in

the mid-2000s, and is one of the

fastest-growing economies in the world. India is the

19th largest exporter and tenth largest importer in the

world. Economic growth rate stood at around 7 to 9%.

Apart from China, India is the only country in the world

that is growing over 7% and has the potential of

growing by 8 to 9 % annually. Even by the estimates of

the World bank, India will grow at 7%.

When the western economies are not doing so well,

and India’s economy is going great guns, it is surely a

matter of pride. Citing uncertainty in global economic

scenario, India aims to achieve 8 per cent annual

growth. While India has confronted persistent

challenges on the external front, still India is doing

reasonably well.

India outstanding in every field

Industry accounts for 28% of the GDP and employ

14% of the total workforce. In absolute terms, India is

12th in the world in terms of nominal factory output.

India is 13th in services output. The Indian retail market

is estimated to be US$ 450 billion and one of the top five

retail markets in the world by economic value.

Tourism in India is also growing fast. India's rich

history and its cultural and geographical diversity make

its international tourism appeal large and diverse. It

presents heritage and cultural tourism along with

medical, business and sports tourism. India has one of

the largest and fastest growing medical tourism sectors.

Mining forms an important segment of the Indian

economy, with the country producing 79 different

minerals. India ranks second worldwide in farm output.

Agriculture and allied sectors like forestry, logging and

fishing accounted for 15.7% of the GDP in 2009–10,

employed 52.1% of the total workforce, and despite a

steady decline of its share in the GDP, is still the largest

economic sector and a significant piece of the overall

socio-economic development of India. In 2008, India had

the world's third largest fishing industry.

India is the largest producer in the world of milk, jute

and pulses, and also has the world's second largest

cattle population with 175 million animals in 2008. It is

the second largest producer of rice, wheat, sugarcane,

cotton and groundnuts, as well as the second largest

fruit and vegetable producer, accounting for 10.9% and

8.6% of the world fruit and vegetable production

respectively. India is also the second largest producer

and the largest consumer of silk in the world, producing

77,000 million tons in 2005.

As of 2009, India is the fourth largest producer of

electricity and oil products and the fourth largest

importer of coal and crude-oil in the world. Coal and oil

together account for 66% of the energy consumption of

India. India's oil reserves meet 25% of the country's

domestic oil demand. Gems and jewellery form an

important part of India’s rich culture. This culture is the

primary reason for a flourishing Gems and Jewellery

industry in India. The numbers also support this

statement. India is the largest consumer of gold, with

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over 20% share of the total gold consumed in the world.

The overall size of the industry is Rs 12,400 crore. Its

total exports add up to Rs 78,100 crore annually. This

comprises 4% of the global Gems and Jewellery

market. India is also the largest diamond cutting and

polishing centre in the world. On the domestic front the

sales figure equals to Rs 73,500 crore. India is the

fastest growing branded jewellery market in the world.

It is expected to grow at an annual growth rate of 40%.

India also has a vast pool of highly skilled labour that is

available at a low cost.

India is also rich in certain alternative sources of

energy with significant future potential such as solar,

wind and bio fuels (jatropha, sugarcane). India's huge

thorium reserves – about 25% of world's reserves – are

expected to fuel the country's ambitious nuclear energy

programme in the long-run.

India has the world's third largest road network,

covering more than 4.3 million km and carrying 60% of

freight and 87% of passenger traffic. Indian Railways is

the fourth largest rail network in the world, with a track

length of 114,500 km. India has 13 major ports, handling

a cargo volume of 850 million tonnes in 2010. Roads,

Railways, Communication systems have made

significant progress in these 60 years. We have now

able to connect several villages by road network.

Education is the backbone of any country's

development. During the initial years of independence

the percentage of literates was only 30% approx. Today

we have 65% literates and that too with enormous

progress in the percentage of women education.

India best investment destination across the world

India has been one of the leading performers in the

world economy in the recent years and has emerged as

a long term investment destination. With a growing

economy, India is arguably one of the best investment

destinations across the world. India maintains the lead in

economic growth vis-à-vis most peers. In our view,

global investors with a long-term perspective remain

positive about India and would look at sharp corrections

as buying opportunities.

India is fast emerging as a lucrative investment

destination for NRI's because of its growing economy.

Foreign funds are flowing into India and China as they

have been among the few star performers when the

global economy is struggling to emerge out of the

meltdown. With the Indian economy on a long-term

growth curve, the non-resident Indians (NRI's) should

look at multiple investment options to park their funds in

their home country.

China, India are expected to be among the world’s

largest economies by the year 2050. They are among

the biggest and fastest-growing emerging markets with

significant long-term growth potential. Real estate in

emerging markets, in general, can be characterized as

“embryonic and growth oriented.” China, India and

Brazil exhibit such characteristics as accelerating market

growth, industry potential that substantially exceeds its

current volume, and a rapidly growing. Moroever it turns

to be a safe investment. With a billion people, the

Republic of India is the world's largest democracy.

Investment in Real Estate

If you are sitting back and thinking whether it's a

good idea to invest in property and real estate in India?

Then you will be more than happy to know that Reserve

Bank of India has granted general permission to foreign

citizens of Indian origin, whether resident in India or

abroad, to purchase immovable property in India for their


bona fide residential purpose. They are, therefore, not

required to obtain any prior permission of Reserve Bank.

Further, the Reserve Bank has granted general

permission for sale of such property without its

permission. Investment in agricultural land/plantation

property/farm house is, however, not allowed.

Gujarat is preferred to Japan when it comes to investment

Real estate in India is perhaps one of the most

vibrant and ever growing sectors of the country with

seemingly limitless opportunities. India figures in the list

of one of the real estate markets every global consultant

of repute recommends to invest. Gujarat is considered

to be the most favoured destination of Investment.

Look at the following factors while including a city in this list:

∙ Availability of resources -Infrastructure development

∙ Connectivity with key economic centres

∙ Pace of growth & overall growth potential

∙ Presence of established players in strategic sectors

∙ Quality of projects

∙ Governmental support (State and National)

With its maritime location dotted with excellent

ports, Gujarat is an ideal

place to do global maritime

trade, particularly with the

Middle East, Europe and

Africa. Gujarat is the

gateway to India’s vast

hinterland also. Our robust

physical, social and

industrial infrastructure and

skilled manpower is an

edge which Gujarat offers

over many other global

locations. Today, Gujarat is

the industrial and corporate

face of the country. It is

evincing investors’

interests from all corners of

the world. We have also

ensured that the investment proposals are processed

fast and fructify faster. Gujarat is reckoned as the

‘Growth Engine of India’. The biggest enabler of this

strength is the futuristic infrastructure which the State

has created. In recent years, there is further focus on

building world class infrastructure. They include the

Special Investment Regions (SIRs), Industrial parks and

Logistics parks. They are going to be the building blocks

of Gujarat as a ‘Global Business Hub’. Moreover,

because of the Delhi-Mumbai Industrial Corridor (DMIC)

project, there are new and historic opportunities to

partner in infrastructure and to set up industries,

institutions and amenities. Our SIRs are going to be the

global hubs of economic activity supported by efficient

world class infrastructure. Also, they will have a policy

framework based on the best practices in the world.

Gujarat invites the global investor community,

particularly from Japan, to examine the potentials in

Gujarat.

In last few years there were three Vibrant Gujarat

summits that have attracted maximum investment from

all over the world.

When Mr Ratan Tata decided to relocate the Nano-

car project from Singur, West Bengal, in 2008, he got a

message from the Gujarat Chief Minister Narendra

Modi, inviting the cheapest car's maker Tata Motors to

the western State. That message clinched the issue and

set the ball rolling to realise Mr Modi's desire to make

Gujarat the new automobile hub of India.

One by one, automobile majors have since been

flocking to Gujarat. Ford India, Peugeot, Maruti Suzuki,

Hero - their officials made rounds of the State and the

first two, have announced that they are ready to park

themselves next to Tata Motors in Sanand.

Ford India announced its second Indian facility on

480 acres at Sanand; on September 2, Peugeot, too,

announced its re-entry into India via Sanand, from 584

acres of land.

Ahmedabad: The best Place in Gujarat to Invest

While Gujarat is quickly becoming a favourable

destination for its unique geographic location and vast

availability of transportation and power, many bigger

businesses are moving their

hub into great emerging

market. As Ahmedabad is

the Economic Destination to

Gujarat, it becomes quite

evident that having business

location in and around

Ahmedabad is a proven

business strategy. The latest

report by the global real

estate consultancy,

Cushman & Wakefield has

found that among the top

ten emerging tier II and III

cities in India, Ahmedabad

has attracted nearly 39 per

cent of total investment

since 2010 followed by

Vishakhapatnam and Vadodara, which capped 32 per

cent and 13.5 per cent of investment, respectively.

The report, “Top 10 Emerging Business

Destinations in India,” released by C&W has identified

the cities of Ahmedabad, Bhubaneswar, Chandigarh,

Coimbatore, Jaipur, Kochi, Indore, Nagpur, Vadodara and

Vishakhapatnam as the next most promising business

destinations offering a long term investment potential.

Sardar Vallabhbhai Patel International (AMD) airport is

considered to be one of the best 5 international airports

of India. ❖

Suresh D. Patel, Chairman & M.D. of Surya Group, is a renowned real

estate developer of Gujarat since 1988. He is the past president of theGujarat Institute of Housing & Estate Developers (GIHED), Vice

president the Confederation of Real Estate Developers’ Associationsof India, board member of Gujarat Chamber of Commerce & Industryand advisory committee member at Vibrant Gujarat. He has initiated

many labour welfare activities and CSR activities in Gujarat andcoordinator for various programmes since 2000. He has organisedmany mega property shows and seminar for development of realestate industry on behalf of developers’ association.


Connecting with the landscape of

your ancestors can be a great

privilege in your life. Do you know the

landscape of your parents, or

grandparents? If your family is still well

rooted in the soil of your homeland,

then you will know that landscape

intimately. But if you come from a

family where the roots have been cut, you may not have

a real sense of where you come from. And it’s true that

seeing your origin, homeland and walking through it,

somehow heals something within you. Now you know

where you come from, and have reconnected to your

roots.

So, not only for the future generation but also for

yourself, it is better to have a second home in India. It

also minimizes the generation gap. When the new

generation is living in foreign land and the older

generation in India, the urban style and comfortable

home will make the new generation visit homeland

quite frequently. In fact, the new generation based

abroad has been attracted towards Gujarat not only for

its cultural and festive mood but also for its changing

lifestyle that is very much up to international standards.

Moreover buying property is the best investment at this

point of time. And if one gets involved in buying-selling

of real estate, they can also earn lot of margin. NRIs can

even utilize it during their vacation and later sell it and

earn profit on it. As the real estate prices are multiplying

day by day, it can be a an ideal investment option.

The construction industry is in top gear in this vibrant

state and Gujarat accounts for only 5.96 per cent of

India’s total area but 22 per cent of the country’s total

investment. It has emerged as one of the leading

industrialized states in India, contributing nearly 16.1 per

cent to the country’s industrial output. Gujarat is a state

where infrastructure development has kept pace with

economic development. In fact, infrastructure is driving

growth in many sectors. For example, ports are driving

port-linked industries, while SEZs and roads are driving

industrial investment and institutional development in

far-flung areas. Gujarat was the first state in the country

to enact a law outlining the system of public-private

partnership (PPP) in infrastructure projects and is a

frontrunner in the development of infrastructure.

Evidently large-scale infrastructure projects, IT parks,

Second home in India connectsyou to your origin

Real estate expert Jaxay Shah interacts with Purvi Apurva Shah regarding Gujarat scenario in property industry.


SEZs and urbanisation have been the major driving force

behind the construction boom in Gujarat. The real-estate

graph is on the rise owing to the industrial revolution,

development supportive policy initiatives and

encouraging living standards. There are several factors

that entice developers to Gujarat, such as its highest

GDP growth rate, stable policy regime, high quality

infrastructure and rapid urbanization. Today, with

infrastructural development at its peak and real estate

witnessing steady growth, we envisage a phenomenal

rise in the demand for both residential and commercial

complexes all over the region. The IT sector boom and

industrial development have increased job opportunities

leading to the influx of people looking for business

growth, employment and a prosperous life. NRIs

coming back to their motherland, particularly NRI

techies, have also boosted the demand for high-end

flats and world class facility-equipped commercial

complexes.

Many of the developments are in and around

Ahmedabad with some spilling over to Vadodara, Surat,

Bhavnagar and Rajkot.

Real estate in Ahmedabad

is one of the best

investment options. With

time, the demand for real

estate is going to increase

and with the fast

development of

infrastructure, it is obvious

that real estate becomes

a best place to invest.

Real estate and gold are

the two sure investment

options available to the

people. Real estate India

makes you connected to

your homeland. It gives

the feel of local connectivity with your community and

culture, and the appreciation you get in terms of

investment can be beneficial to make you reach globally.

Real estate gives you pride and status. It reflects a

lot on your personality. What will give you more

satisfaction than having a home in your own motherland,

where you can live in your comfort zone and feel so

much connected to your root? Real estate prices are

multiplying and such investment can be the best gift you

can pass on to the coming generations.

A large number of people of Indian origin born in the

West are moving "back" to the country their parents left

decades ago. With India's economy growing faster than

America or Britain's, new wave of "reverse migrants"

younger generation is seeking opportunities as well as

cultural connection and prefers to settle in India.

While investing in real estate, always be very

cautious. There are certain points to be checked and re-

checked before making any real estate investment.

Before buying any property or land, the legal papers

should be checked. Secondly, check the track record of

the seller. When you are planning to buy any property,

first and foremost thing is to check the title deed of that

Jaxay Shah, Managing Director of Savvy Group of Companies, Vice-

president of Credai India, Committee Member of GIHED, Boardmember of GICEA, Founder trustee of LAA Group, Member of APEXand Board Member of Rajpath Club.

property. The best practice is to get the property deed

checked by an expert lawyer just to make sure that

there are no loop holes. Encumbrance certificate is

necessary to check the title clearance of property when

buying any property. Terence plan is detailed plan of the

property which is done by a licensed surveyor. All the

measurements details in it are accurate in terms of

length, width, borders etc. this plan is necessary for

some specific areas only.

Many property owners take bank loan by pledging

their property. So check they have paid the entire due

before you buy the property. Property taxes are first

charge on property that is paid to government or

municipality. So you have to make enquiry in

government and municipal offices to ensure whether all

tax has been paid as on date. You can ask for latest tax

receipt from owner. It is prudential to measure the land

before registering any property. In some cases, it’s

possible that there will be more than one owner of

property. In that case get No Objection Certificate or

Release certificate from other owners. An NRI can also

sell his property in India.

For this he gives Power of

Attorney to third person

whom he give rights for

selling the property on

behalf of him. The most

important thing is to

ensure the Power of

Attorney is witnessed and

is duly signed by an officer

of the Indian Embassy.

The Power of Attorney

signed by a notary public

has no legal support in

such a case. Deed/Sale

Agreement: this

agreement can be done

by an expert lawyer and signed by both the parties with

two witnesses.

After collecting and checking all the documents, you

have to register land/ property at the Sub-Registrar or

the SDM (Sub District Magistrates) of your area.

Gujarat’s contribution

Some of the areas in which Gujarat has a major

contribution compared to other states of India is: 17% of

fixed capital investment, 16% of industrial output, 22%

of India's exports, 16% of value of output, 12% of net

manufacturing value, 10% of factory output, 98% of

soda ash production, 80% of diamond export, 78% of

salt production, 62% of petrochemical production, 53%

of crude oil (Onshore), 51% of chemical products, 37%

of groundnut production, 35% of cargo handling, 31% of

cotton production, 30% of natural gas (Onshore), 10%

of mineral production, 25% of textile production, 35% of

pharmaceutical products etc. ❖


The purchase and sale of immovable

properties in India by a Non

Resident Indians (NRIs) or by a

Persons of Indian Origin (PIOs) is really

a very simple and easy affair with not

much hassles and problems. For a

detailed and authentic answer one should always refer

to the Foreign Exchange Management (Acquisition and

Transfer of Immovable Properties in India) Regulations,

2000 as amended from time to time. That the entire

copy of the Regulations can be obtained from link

http://rbidocs.rbi.org.in/rdocs/notification/PDFs/13271.pdf

The above regulations have been notified by the

Reserve Bank of India vide Notification No. FEMA/21/200-

RB dated 3rd May, 2000. Likewise, to get a latest update

on the subject, the readers may also very carefully go

through the latest Master Circular on Acquisition and

Transfer of Immoveable Property in India by Non Resident

Indians/Persons of Indian Origin which has been issued by

the Reserve Bank of India vide Master Circular No.4/2012-

13 dated 2/7/2012. That the said Master Circular can be

obtained from http://www.rbi.org.in/scripts/

NotificationUser.aspx?Id=7311&Mode=0

Before going further to analyse the different provisions

of the law relating to acquisition and transfer of immovable

properties in India by Non Resident Indians as well as by

Persons of Indian Origin it would be worthwhile to know

and understand the legal definition of these two entities as

per the Foreign Exchange Management Act.

As per Notification FEMA-5 /2000 dated 3.5.2000 as

amended from time to time, a Non Resident Indian (NRI)

is a person resident outside India who is citizen of India or

is a person of Indian Origin. Likewise, the definition of

Person of Indian Origin (PIO) means an individual (not

being a citizen of Pakistan or Bangladesh or Sri Lanka or

Afghanistan or China or Iran or Nepal or Bhutan) who (i) at

any time, held Indian passport, or (ii) who or either of

whose father or whose grandfather was a citizen of India

by virtue of Constitution of India or the Citizen Act, 1995.

With regard to acquisition and transfer of property in

India by an Indian Citizen resident outside India it is

specifically provided that a person resident outside India

who is a citizen of India may -

a) acquire any immovable property in India other than

agricultural/plantation /farm house, and b) transfer any

immovable property in India to a person resident in India.

c) transfer any immovable property other than agricultural

or plantation property or farm house to a person resident

outside India who is a citizen of India or to a person of

Indian origin resident outside India.

As regards the acquisition as well as transfer of

property in India by a Person of Indian Origin (PIO) the

Regulation 4 of the above mentioned regulation

specifically states that a person of Indian origin resident

outside India may -

(a) acquire any immovable property other than

agricultural land/farm house/plantation property in India by

purchase, from out of (i) funds received in India by way of

inward remittance from any place outside India or (ii) funds

held in any non-resident account maintained in accordance

with the provisions of the Act and the regulations made by

the Reserve Bank under the Act; (b) acquire any

• Ankit Shah

Gujarat Samachar & Asian Voicewww.abplgroup.com 19

immovable property in India other than agricultural

land/farm house/plantation property by way of gift from a

person resident in India or from a person resident outside

India who is a citizen of India or from a person of Indian

origin resident outside India; (c) acquire any immovable

property in India by way of inheritance from a person

resident outside India who had acquired such property in

accordance with the provisions of the foreign exchange

law in force at the time of acquisition by him or the

provisions of these Regulations or from a person resident

in India; (d) transfer any immovable property in India other

than agricultural land/farm house/plantation property, by

way of sale to a person resident in India; (e) transfer

agricultural land/farm house/plantation property in India, by

way of gift or sale to a person resident in India who is a

citizen of India; (f) transfer residential or commercial

property in India by way of gift to a person resident in India

or to a person resident outside India who is a citizen of

India or to a person of Indian Origin resident outside India.

The rules relating to repatriation of the sale proceeds

of property held in India is also very simple. Regulation

No.6 of the above regulations contains very detailed

guidelines with reference to repatriation. It is provided in

this regulation that in the event of sale of immovable

property other than agricultural

land/farm house /plantation

property in India by a person

resident outside India who is a

citizen of India or a person of Indian

origin, the authorised dealer may

allow repatriation of the sale

proceeds outside India, provided

the following conditions are

satisfied, namely:

(i) the immovable property was

acquired by the seller in

accordance with the provisions of the foreign exchange

law in force at the time of acquisition by him or the

provisions of these Regulations; (ii) the sale takes place

after three years from the date of acquisition of such

immovable property or from the date of payment of final

installment of consideration for its acquisition, whichever

is later; and (iii) the amount to be repatriated does not

exceed (a) the amount paid for acquisition of the

immovable property in foreign exchange received through

normal banking channels or out of funds held in Foreign

Currency Non-Resident Account or (b) the foreign currency

equivalent, as on the date of payment, of the amount paid

where such payment was made from the funds held in

Non-Resident External account for acquisition of the

property; (iv) in the case of residential property, the

repatriation of sale proceeds is restricted to not more than

two such properties. (v) In the case of the sale of an

immovable property, other than an agricultural land/farm

house/plantation property in India by an NRI or PIO,

repatriation of the sale proceeds outside India (including

credit to RFC, NRE or FCNR Accounts), is allowed. (vi) Sale

proceeds of any immovable property inherited by NRI/PIO

from a person/resident in India may be remitted abroad but

the amount not to exceed USD one million, per calendar

year subject to production of documentary evidence in

support of inheritance and Tax clearance certificate/no

objection certificate from Income Tax authority to

authorized dealer for remittances. (vii) The RBI has also

now permitted authorized dealers to allow the facility of

repatriation of funds by NRI/PIO in their Non-resident

Ordinary Rupee (NRO) Account up to US $ 1,00,000 per

year representing the sale proceeds of the immovable

property held by them for a period of not less than 10

years subject to payment of the applicable taxes.

It may also be noted that citizens of Pakistan,

Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and

Bhutan have been prohibited from acquiring and

transferring immovable property in India without the prior

permission of the Reserve Bank of India.

The Master Circular of the Reserve Bank of India dated

2nd July 2012 clearly states that an NRI can acquire by

way of purchase any immovable property (Other than

agricultural land/plantation property/farm house) in India.

Likewise, an NRI may transfer any immovable

property in India to a person who is resident in India. He

may transfer all immovable properties except agricultural

land, plantation property or a farm house to any Indian

citizen resident outside India as also to a PIO resident

outside India.

For purchase of the above

property NRI can make payment by

way of funds received in India

through normal banking channels

by way of inward remittance from

any place outside India or by debit

to his NRE/FCNR (B) and NRO

account. Similarly, such payments

for purchase of properties in India

cannot be made by traveller's

cheque or by foreign currency

notes. The NRIs would be happy to

note that for purchase by them of commercial property

under this above general permission they are not required

to file any documents with the Reserve Bank of India.

Lastly one of the important factors which are required

to be taken into consideration is Rules/Law relating to

taxes while purchasing property. At the time of purchasing

of property any individual has to pay registration fees and

stamp duty that varies from state to state. For example if

one buys property in Gujarat the one has to pay 4.9%

stamp duty and 1% registration fees on total sale

consideration and same will vary in another state. As far as

taxes are concerned one does not have to pay any income

tax at the time of purchasing property, though certain

taxes are to be paid when selling property. If NRI/PIO has

held property for less than 3 years then he would have to

pay 30% tax. If property has been held for more than 3

years then tax payable is 20%. Tax is payable on rental

income too. It is also very important to note that at the

time of renting out property or repatriation PAN card is

required. PAN is short form of Permanent Account

Number issued by Income Tax Department. ❖

Ankit Shah, Advocate, LLM (London) is a practicing lawyer at High

Court of Gujarat and Supreme Court. He is specialized in Civil Laws,Land & Property Laws, Corporate Law and Tax Laws. He can bereached at [email protected]


Q: In what manner the purchase consideration for the

residential immovable property should be paid by foreign

citizens of Indian origin under the general permission?

A: The purchase consideration should be met either out of

inward remittances in foreign exchange through normal

banking channels or out of funds from NTE/FCNR

accounts maintained with banks in India.

Q: What are the options available for obtaining guarantors

while applying for a HDFC/LIC loan ?

A: One will need a guarantor for a loan mainly for collateral

security. The guarantor will have to demonstrate

appropriate net worth to cover for the loan. Usually one

can have a guarantor in any city where the loan issuer has

a branch. Talk to loan issuers they will work something out

for NRIs and foreign banks.

Q: Are any conditions required to be fulfilled if repatriation

of sale proceeds is desired?

A: Applications for repatriation of sale proceeds are

considered provided the sale takes place after three years

from the date of final purchase deed or from the date of

payment of final installment of consideration amount,

whichever is later.

Q: Can authorized dealer grant loans to NRIs for acquisition

of a flat/house for residential purposes?

A: Authorized dealers have been granted permission to

grant loans up to nonresident Indian nationals for

acquisition of house/flat for self-occupation on their return

to India subject to certain conditions. Repayment of the

loan should be made within a period not exceeding 15

years out of inward remittance through banking channels

or out of funds held in the investments' NRE/FCNR

accounts.

Q: Can foreign citizens of Indian origin acquire commercial

properties in India?

A: Yes. Under the general permission granted by

Reserve Bank properties other than agricultural

land/farm house/plantation property can be acquired by

foreign citizens of Indian origin provided the purchase

consideration is met either out of inward remittances in

foreign exchange through normal banking channels or

out of funds from the purchasers' NRE/FCNR accounts

maintained with banks in India and a declaration is

submitted to the Central Office of Reserve Bank in form

IPI 7 within a period of 90 days from the date of

purchase of the property/final payment of purchase

consideration.

Q: Can foreign citizens of Indian origin acquire or dispose

of residential property by way of gift?

A: Yes. Reserve Bank has granted general permission to

foreign citizens of Indian origin to acquire or dispose of

properties up to two houses by way of gift from or to a

relative who may be an Indian citizen or a person of Indian

origin whether resident in India or not,provided gift tax has

been paid.

Q: Can Indian companies grant loans to their NRI staff?

A: Reserve Bank permits Indian firms/companies to grant

housing loans to their employees deputed abroad and

holding Indian passport subject to certain conditions.

Source: Reserve Bank of India

Q: Can NRIs obtain loans for acquisition of a house/flat for

residential purpose from financial institutions providing

housing finance?

A: Reserve Bank has granted general permission to certain

financial institutions providing housing finance e.g.

HDFC,LIC Housing Finance Ltd.,etc. to grant housing

loans to non-resident Indian nationals for acquisition of

houses/flats for self-occupation subject to certain

conditions. (Source: www.gihed.org)

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NRIs should keep in mind...

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www.silvernesst.comE:[email protected]

Site: silver Nesst, B/H, Bright Day SchoolVasna - Bhayli Road, TP-3, Vadodara

Ph : +91 99099 83240

AmenitiesMarvelously Aesthetical Entrance, Gate Beautifully Landscaped Green,Spaces club House,Table Tennis,Gymnasium Children’s Play ,Equipment,Walking Track

Developer

for your family 3 Bhk Luxurious Apartment

British-Gujaratis and Indians are getting enthusiastic

to make an investment in real estate in area near

Gandhinagar, capital of Gujarat. The reason is either to

get high returns on the investment in future or to simply

enjoy the retirement period in coming years. Nowadays

more and more people are opting to make real estate

investment in area of Mahudi-Pethapur highway, as the

roads are fast developing road with fantastic

infrastructure and moreover there are many attractive

projects developing here. Many investors have already

booked beautiful Villas and apartments in this area.

It is a known fact that Gujarat is most developing and

a progressing state of India. And real estate market in

Ahmedabad and Gandhinagar is rapidly growing with ever-

rising prices. It can be said that the area near Ahmedabad

airport and Mahudi jain temple is one of the rapidly

developing area.

Projects shaping up in this area are extremely well done,

the facilities and amenities are also very well provided, there

are amenities like huge swimming pool, Gymnasium, Spa,

Art Gallery, Landscaped lawn, Garden, Fountain garden,

senior citizen sitting arrangements, Children play area,

Gazebo, Table-tennis, chess, volleyball ground, Badminton

court and many other facilities. Moreover there is also

skating rink, Golf, American basketball court etc.

According to the reliable sources involved in real

estate in this area, arrangements have been made for of

Loan facility for NRI intending to invest there. Even there

is arrangement for legal aid and advice cell. And the best

part is that anyone from Britain will be able to buy property

on loan right sitting in Britian itself as the projects are

connected with many banks that will facilliate you to buy

properties on loan while you are far away from India.Landmarks

∙ Mahudi Jain temple 9 km from Gandhinagar, 45 km from

Ahmedabad airport.

∙ Gandhinagar, Delhi-Mumbai Industrial Corridor (DMIC),

proposed 6 lane highway, Gift City, Info City (TCS and

other major IT companies). Metro Express for

Gandhinagar-Ahmedabad (MEGA) & BRTS

∙ Proposed Amusement park development

∙ Education corridor: IIT, DAIICT, NID, NIFT, IHM, GNLU,

PDPU, SWBU

∙ Proposed Baba Ramdev’s Yoga-ashram.

∙ Best place to de-stress and rejuvenate oneself - be it on

weekends or just any time. From this point one can keep

away from the maddening city as the undulating

landscape beckons with an abundance of flora and

fauna. Peacock and Nilgai (blue bull) can be seen

roaming along the stretch.

Mahudi-Pethapur highwaydeveloping as a real estate hub

Property Special 2012

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Transcript of Property Special 2012