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Under the FERA, the
regulations concerning buying and selling of real estate
property was mainly based on the citizenship of the
individuals. Under FEMA, the restrictions involving the
acquisition, transfer of immovable property in India are no
longer linked to citizenship of a person but are now
generally governed by the residential status of a person.
In general, the acquisition and transfer of immovable
property by non-resident in India are capital account
transactions. The RBI is empowered under the FEMA to frame
regulations to prohibit, restrict or regulate the
acquisition or transfer of immovable property in India by a
person resident outside India.
Regulations of immovable property in India are primarily
based on the residential status of a person under FEMA.
However, under the FERA, the controls were mainly based on
the citizenship.
The restrictions are not applicable to a lease of immovable
property for a period not exceeding five years. The RBI has
framed the regulations the Foreign Exchange Management
(Acquisition and Transfer of Immovable Property in India)
Regulations, 2000, which have been notified, vide
notification no. FEMA 21-2000 RBI dated May 3, 2000
In a nutshell, the RBI has given only three general
permissions to the following categories in connection with
immovable property in India.
1. A non-resident who is a citizen of India.
2. A non-resident who is a Person of Indian origin.
3. A non-resident who has established in India a branch or
other place of business.
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