created by Rajesh Dhruva

THANKS - Hon.Finance Minister,Sir! Our finds favour & Compies of various Memorandams

1st December, 2008
The Editor,
Times of India,
Mumbai/Ahemdabad / Rajkot.

Sub: Anomalies in Article.

With reference to the above, I, Rajesh H Dhruva, Chartered Accountant and an NRI Consultant, to inform as under:-

I am a Chartered Accountant and an Advisor in the matters pertaining to Foreign Exchange Laws, Tax Laws, Double Tax Treaties & Investments and NRI's Mutual Fund Portfolio Management. I am also Chief Executive of :  only website displaying monthly  updated interest rates of almost all banks in India in foreign currencies & Indian Rupee deposits offered to Non Resident Indians ;   a comprehensive website. presenting edited & updated version of  Foreign Exchange Management Act, 1999, Rules and Regulations thereunder as also Tax Laws and Banking Regulations pertaining to Non Resident Indians and  . - -presenting the very best of Equity and income schemes of Indian Mutual Funds and global indices across the world in $ terms .

I have read with interest Mr. Ashish Gupta's article on the subject of "NRIs and PIOs can invest in real estate in India" in in Rajkot Plus in the Times of India, Ahmedabad edition of Monday the 24th instant. and e-edition of the Economic Times at The said article has multiple Anomalies and certain errors of omission and commission.

I am forwarding herewith my notes together with copy of relevant regulations and copy of his article wherein the errors are penned in red for your perusal.

I am sure you will publish the corrected content for the benefit of readers at large. Please inform if any clarifications are needed in this regards.

With regards.


Chief Execuitve
Tel. No. : 0091 281 - 246 3367 - 305 3367 - 664 3367.
Cell : 0091 98240 49944.


Anomalies are listed herein :-

1. It has been written that  a PIO who is a citizen of Pakistan, China or Bangladesh has restrictions in acquiring property.
.02 But according to the provisions of Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations, 2000 ,  a citizen of Afghanistan, Sri Lanka, Iran, Nepal and Bhutan also is restricted to acquire or transfer immovable property in India without prior permission of the Reserve Bank . [Annex - 1]

2. It has been written that the NRI/PIO may transfer the property without any approval from the Reserve Bank of India (RBI) to anybody - which includes a resident of India as also another NRI/PIO.
.02 However, a PIO can transfer by way of sale a property other than agricultural farms etc. only to a person resident in India . [Annex - 2]

3. It has been written that in case the property is acquired from rupee funds held in India, the remittance depends on the holding period of the property.
.02 However according to the provisions of Master Circular No. 03 /2008- 09, Dated July 1, 2008 [Annex - 3.] and also Circular No. 12 ,Dated November 16, 2006 [Annex - 4] , the lock-in period of 10 years for remittance of sale proceeds of immovable property has been dispensed with.

4. It has been written that up to one million US$ per calendar year can be repatriated out of the balances held in NRO accounts.
.02 However as per the provisions of Foreign Exchange Management (Remittance of Assets) Regulations, 2000, repatriation of one million US$ is permitted in each financial year (April-March) [Annex - 5]

5. It has been written that ,in case of sale, the sale proceeds of upto two properties can be remitted outside India without RBI approval.
.02 This restrictions on remittance of sale proceeds apply to residential properties only. An NRI has no such restrictions as regards commercial or other properties.[Annex - 6]

6. It has been written that, the instalments of the loan, interest and other charges should be paid by the NRI/PIO through remittances from outside India through normal banking channels or out of funds in his NRE/FCNR/NRO account in India.
.02 However as per the provisions of Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000, the repayment of housing loan can also be made by any relative of the borrower in India. [Annex - 7]

Enclosed please find extracts of relevant regulations/notification in the Annexures for your referenceand also the article published by you, whereby  anomalies are highlighted with red colour.