Acquisition or Transfer of Immovable Property under Foreign Exchange Management Act, 1999

                                                                            

RBI/FED/2015-16/7                                                                                         

FED Master Direction No. 12/2015-16

January 1, 2016 

[Updated as on September 01, 2022]

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 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 Foreign Exchange Management (Non-debt Instruments) Rules, 2019, dated October 17, 2019, respectively.                                                                    

(Master Direction No. 18 dated January 1, 2016)

The Central Government has, accordingly, notified the 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 the acquisition or transfer of immovable property in India by a person resident outside India on a lease not exceeding five years.

Some key terms used in the Rules are given below:

A ‘Non-Resident Indian’ (NRI) is a person resident outside India who is a citizen of India.

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.

‘Relative’ means relative as defined in section 2(77) of the Companies Act, 2013.

Acquisition of immovable property

An NRI or an OCI can acquire by way of purchase any immovable property (other than agricultural land/ plantation property/farmhouse) in India.

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 a 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.

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.

An NRI or an OCI can acquire any immovable property in India by way of inheritance from a person resident in India.

Transfer of immovable property

  • An NRI or an OCI may transfer any immovable property in India to a person resident in India;
  • An NRI or an OCI may transfer any immovable property (other than agricultural land or plantation property or farmhouse) to an NRI or 15an 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.

Payment for Acquisition of Immovable Property

  • NRIs or OCIs may make payment, if any, for the 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 traveler’s cheque or by foreign currency notes or by other modes except those specifically mentioned above.

Joint acquisition by the spouse of an NRI or an OCI

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.

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 the non-resident account of the person concerned maintained in accordance with the Act or the rules framed thereunder. Payments cannot be made either by traveler’s cheque or by foreign currency notes or by other mode except those specifically mentioned in this para.

The marriage should have been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition of such property.

The non-resident spouse should not otherwise be prohibited from such acquisition.


A person acquiring property in accordance with section 6(5) of FEMA (reference para 1.2 of Part II) or his successor cannot repatriate outside India the sale proceeds of such immovable property without the prior permission of the Reserve Bank. However, if such a person is resident outside India, he/ she can utilize the remittance facilities available under the Foreign Exchange Management (Remittance of Assets) Regulations, 2016, as amended from time to time.

In the event of the sale of immovable property other than agricultural land/farmhouse/ plantation property in India by 21a PIO resident outside India [who held property in India in terms of the erstwhile FEM (Acquisition and transfer of Immovable Property in India) Regulations, 2000] or an NRI or an OCI, the Authorised Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely:

  • 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;
  • the amount for acquisition of the immovable property was paid in foreign exchange received through banking channels or out of funds held in FCNR(B) account or NRE account;

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