The PIO is an Indian citizen who has opted for citizenship of another country. The Foreign Exchange Management Act, 1999 (FEMA) considers a citizen of any country, other than Pakistan or Bangladesh, a PIO provided:

• The person has held an Indian passport at any time
• His/her parents or any grandparents were citizens of India
• The person is a spouse of an Indian citizen
• The person is a spouse of a person who has help an Indian passport at any time
• The person is a spouse of a person who was either a citizen of India or had parents or grandparents who were citizens of India

Yes, if the acquisition is by way of purchase, gift, or inheritance, the RBI allows acquisition of immovable residential property in India.

• In the case of gift, the property has to be from a person in India, or an NRI, or a PIO
• In the case of inheritance, the property should have belonged to a resident of India as per the Provisions of Section 6(5) of the Foreign Exchange Management Act, 1999

With the specific approval of RBI, an NRI/PIO/ foreign national of Indian origin can also acquire residential property by way of inheritance from a person who is a resident outside of India, provided the person bequeathing the property had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations.

No, RBI rules do not have any provision that necessitates NRIs to take its permission for either of the above actions.

No. There is no such restriction.

Yes, it is possible for an NRI to do both of the above to an Indian resident/NRI/PIO.

Yes, NRIs can authorize a third party to act on their behalf by enabling him/her with a Power of Attorney to complete loan and related formalities. Ideally, the POA should be executed in favor of a resident Indian. In cases where the POA has to be executed outside India, certain procedures apply:

• Depending on the laws of individual countries where a POA is being executed, it must drawn out either on stamp or plain paper
• An official of the Indian Embassy, Indian Consulate, or Trade Commissioner of the country where the executants reside has to attest the signatures of the executants
• The Power of Attorney becomes valid only when the POA holder's signature has been verified by anIndian notary, his/her employer or banker on a separate paper and attached with POA document

In India, NRIs/OCBs have various options in terms of the type of accounts that they are allowed to operate. Account holders can hold Indian Rupee and Foreign Currency accounts:

• NRO or Non-Resident (Ordinary) Account
• NRE or Non-Resident (External) Rupee Account
• NRE or Non-Resident (External) Rupee Account
• FCNR or Foreign Currency Non-Resident Accounts in Pounds Sterling, US Dollars, Japanese Yen, and Euro

Under the Exchange Earners Foreign Currency Account (EEFC) Scheme, RBI rules also permit an Indian earning in foreign currency to maintain a foreign currency account in India to the extent of 50% of such foreign exchange earnings, with a bank authorized to deal in foreign currency. It is important to note that all the above accounts can only be operated with banks in India that hold authorized dealer licenses, or those banks, specifically authorized by the Reserve Bank to maintain accounts in the names of NRIs/OCBs.

NRO: Funds, standing to the credit of this account, cannot be repatriated outside India in foreign exchange, without prior permission of the Reserve Bank of India. However, interest earned on these accounts, net of Indian taxes, is eligible for repatriation outside India, via the authorized dealer where the account is maintained.While RBI permission is not required, the account holder has to make an application in the prescribed form to the authorized dealer.

NRE: The funds, standing to the credit of this account, as well as interest earned thereon, can be remitted outside India in free foreign exchange, without RBI permission. The interest income is not liable to be taxed under Indian income tax laws. Remittances to the accounts should be from outside India in foreign exchange as well as other funds eligible to be remitted outside India, in free foreign exchange. Funds, emanating from local sources, are not eligible to be credited to these accounts, unless, under the existing Exchange Control Regulations such funds can otherwise be remitted outside India.

FCNR: Regulations permit opening of accounts in four foreign currencies, namely, Pound sterling, US Dollar, Japanese Yen, and Euro. For opening an account in a particular currency, the remittance to India must be in the same currency. Only fixed deposit accounts can be opened with a minimum term of one year , and a maximum maturity of three years. The account holder has the option of remitting both the principal and interest earned on these accounts outside India, in the same or any other convertible currency. The interest earned on these deposits is not liable to be taxed under Indian income tax laws.

Yes, there are some differences between the two. While funds held in NRE accounts can be repatriated abroad freely, funds in an NRO account are not generally repatriable. However, subject to certain conditions funds held in NRO accounts can be repatriated.

Also, NRE accounts can be credited with funds remitted from abroad, or with local funds which would otherwise have been remitted to the account holder abroad. Under the Exchange Control regulations,funds due to non-resident account holders which do not qualify for remittance outside India are required to be credited to NRO accounts and any interest income is liable for deduction of income tax at source.

Rules permit NROs to maintain NRO accounts jointly with Indian residents. However, NRE accounts can be held jointly held only with NRIs.

Subject to certain conditions,RBIpermits certain housing finance companies like HDFC, LIC Housing Finance Ltd., etc., and authorized dealers to grant housing loans to NRIs for buying a house or flat for self-occupation. The purpose of the loan, margin money and quantum of loan will be on a par with those applicable to Indian residents. The maximum tenure of such a loan should not exceed 15 years,and the repayment will have to be made from inward remittances or out of funds held in the investor's NRE/ /NRO/FCNR accounts.

The maximum home loan entitlement of an NRI or PIO is not more than 85% of the total value of the property.

An authorized dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied:

• 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
  Or,
• The amount to be repatriated does not exceed:
  • The amount paid for acquisition of the immovable property in foreign exchange was received through normal banking channels, or
  • The amount paid was paid out of funds held in a FCNR account, or
  • The foreign currency equivalent (as on the date of payment) of the amount paid, where such payment was made from funds held in an NRE account for acquisition of the property; and
• In the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

For the purpose of repatriation an application in Form IPI 8 must be made to the Central Office of RBI within 90 days of the sale of property.

In India, NRIs do not have any tax liability on the purchase of property.There is however a tax liability on the following:

• Income earned from rental of a residential property is taxable under the head Income from House Property, of the Income Tax Act of 1961.
• Income earned from the sale of a property is taxable under the head Capital Gains of the Income Tax Act of 1961.

Yes! An NRI can purchase a property with money borrowed from a close relative outside India provided the borrowed amount does not exceed USD 250,000 or its equivalent.The following conditions will apply:

• The minimum tenure the loan should one year;
• The loan is interest free; and
• The loan is received as inward remittance in free foreign exchange through normal banking channels or by direct debit of the NRI lender's NRE/FCNR account.

"Close Relative," as per RBI guidelines is as defined in Section 6 of the Companies Act, 1956: A person shall be deemed to be a relative of another if, and only if:

• They are members of a Hindu undivided family; or
• They are husband and wife; or
• The one is related to the other in the manner indicated in Schedule IA.