Reserve Bank of India (RBI) rules are subject to Transactions between a person resident in India and one outside India or transactions between two persons in India but in a foreign currency. Foreign Exchange Regulations Act governs the early rules which were modified subsequently in 1973 and then again in 1993. Foreign Exchange Management Act 1999 which is effective from June 1, 2000 replaces these.
A person residing in India means a person resident of India during the course of the preceding financial year (April-March) for more than one hundred and eighty-two days and who has come to or stays in India either for taking up on business or vacation in India or for any other purpose, that would indicate his intention to stay in India for an uncertain employment, period.
If there is any doubt on if a person is a non – residential Indian. Then that person has to prove his address as prescribed by Law e.g. Status certificate is not given by RBI. Generally this status is clearly applicable to most of us. But in may be scope for interpretation for case of businessmen or dependents of non-residents who travel regularly, students studying abroad, Indians who have acquired foreign citizen but have come to India for work on deputation etc.
Without any restriction NRIs can purchase land of any type. E.g. Commercial. Etc. In other words, there is no ceiling on the number of such properties, he can buy, the size or value of such property etc.
No document of such type shall be sent to RBI or any bank before or after such a purchase.
There is a valid legal definition for this term PIO. In simple words, however, a PIO is a person who himself had an Indian passport or his father or grandfather have Indian citizenship hence his children and grand children if later migrate and get local citizenship. However, to avoid complications arising out of citizenship before partition and other related issues, the local citizenship acquired should not be of China, Iran, Nepal, Bhutan Pakistan, Bangladesh, Sri Lanka or Afghanistan.
On the other hand, any Indian citizen cannot buy any property with a non – residential Indian (e.g. Mr Obama) cannot acquire any immovable property in India by way of purchase. Moreover property cannot be purchased jointly in the name of one eligible person with one non-eligible person even as a second name.
However, a foreign national resident in India does not require approval of RBI to purchase any immovable property in India. This is because once he is a resident in India, he gets the rights like any other resident.
Foreign nationals of non-Indian origin and also citizens of certain countries specified above can acquire residential accommodation on lease not exceeding five years.
The above explained permissions relating to purchase apply to acquisition by means of gift also. That means NRIs & PIOs can acquire commercial/residential property as gift but not agricultural land/plantation property/farmhouse in India. Foreign nationals of non-Indian origin cannot acquire any of these as gift also. But this sub-rule has been introduced to prevent any deliberate action aimed at misuse and tax evasion.
The NRI and PIO cannot get property which is agricultural in a gift or cannot even purchase it. This type of land has to be owned by the person before becoming PIO or NRI.