| WOOING NRIS TO INVEST IN INDIA |
| Thursday, 12 October 2006 | |
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The government has provided a liberalized policy framework for approval of NRI investments in India.
Q . Is it easy for an NRI to invest in India ?
A . The government attaches importance to investments by NRIs. It has provided a liberalized policy framework for approval of NRI investments through both the automatic and the government route. NRIs are permitted to invest up to 100 per cent equity in real estate and civil aviation sectors. Automatic approval is given by the RBI to all NRI proposals on investment up to 100 per cent for all items/ activities except a few exceptions mentioned in Press Note 2 (2000 series) read with sector-specific guidelines. Government approval is given to all proposals not qualifying for automatic approval.
Q. What will be the consequences if one among two or more persons refuses to accept a property jointly given as gift ?
A. Under Indian law, the presumption is that the transfer of property by way of gift to two or more persons is as the tenants-in-common i.e. each donee getting a distinct share in the property gifted. The relevant provision is contained in Section 125 of the Transfer of Property Act. Therefore, the gift will be void only to the extent of the share of the donee who does not accept it. Also, the other person cannot take the whole of it.
Q. How can a person who is not a resident of India transfer his immovable property in India ?
A. In order to address various issues relating to acquisition and transfer of immovable property in India by a person resident outside India under the provisions of the Foreign Exchange Management Act, 1999, a set of FAQs has been prepared. These FAQs seek to cover the broad spectrum of issues relating to acquisition and transfer of immovable property in India by a non- resident Indian (NRI) or foreign national of Indian origin (PIO) Or a foreign national of non- Indian origin as also by a person resident in India who is not a citizen of India. In case there are other issues to be resolved, a reference may be made to the Chief General Manager, Reserve Bank of India, Foreign Investment Division, Central Office, Mumbai.
Q. What type of security is required for availing oneself of housing loan ?
A. The security for a loan is generally the property to be financed. This security can be in the form of deposit of title deeds and / or such other collateral security as may be necessary.
In case the property is under construction, interim / collateral security may be required which may be in the form of assignment of life insurance policies, the surrender value of which is at least equal to the loan amount, pledge of shares and such other investments that are acceptable to institution providing the loan.
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