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Buying Property

India - Buying Property

Section 31 (1) of FERA (Foreign Exchange Regulations Act), 1973 states that 'who are not citizens of India (whether resident in India or not) and companies (other than banking companies) which are not incorporated under any law in force in India are required to obtain prior permission of Reserve Bank to acquire, hold, transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise any immovable property situated in India.'

However, if immovable property is taken or given on lease for a period not exceeding five years then the restrictions contained in Section 31 of FERA, 1973 are not applicable to foreign nationals / companies.

Those companies that are permitted to carry on activities in India to acquire or hold any immovable property in India in terms of the general permission are required to submit to Reserve Bank a declaration in form IPI - 5 not later than 90 days from the date of acquisition of the immovable property.

Before buying an immovable property, one should consult a lawyer for all details of agreement and registration, the 'No-encumbrance certificate' etc. and seek the assistance of a registered valuer to ensure price quoted is correct market value.

In spite of all efforts if a buyer gets duped, a complaint may be lodged under a Central Act called the Consumer Protection act.1986.

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