Govt notice on land acquisition by foreigners

Expressing deep concern, the Centre has advised States to be extra cautious in respect to the land acquisition by persons residing outside India. It has been directed to verify their eligibility under the Foreign Exchange Management Act, FEMA, before any registration of sale or purchase of immovable property in the country.

•   E-mail Article
•   Printer Friendly
•   Text-Size    

Purchase or acquisition of immovable property in India by foreign national is not permissible other than the specified clauses mentioned in the FOREIGN EXCHANGE MANAGEMENT ACT, 1999. Furthermore, the person acquiring land in India will have to meet all legal requirements specified by individual State authority.

According to the present law, a foreign company which has established a Branch Office or other place of business in India under the provisions of Foreign Exchange Management Regulations can acquire immovable property in India which is necessary for or incidental to carrying on such activity.

This apart, a foreign national who is residing in India for more than 182 days during the course of the preceding financial year for taking up employment or carrying on business / vocation or for any other purpose indicating his intention to stay for an uncertain period can acquire immovable property in India as he would be a ‘person resident in India’ as per section 2(v) of FEMA, 1999.

Again to be treated as a person resident in India under FEMA, a person has not only to satisfy the condition of the period of stay but also his purpose of stay as well as the type of Indian visa granted to him to clearly indicate the intention to stay in India for an uncertain period.

As per the provisions of FEMA, an Indian citizen resident outside India and a Person of Indian Origin resident outside India may acquire immovable property in India other than agricultural land, plantation or a farm house.

‘In violation of the existing rules, it has been observed that foreign nationals are buying immovable property illegally in some parts of the country, and some even buying land while residing with a tourist visa,’ the Ministry of Finance said in a released statement.