Goa Monsoons

When it rains in Goa, it pours...

The rains in Goa are a magical time, the entire state wears a clean look with lush greenery. It is not safe to swim in the sea, and there can be days when it rains very heavily so you may find it difficult to move around in Goa. However, there is no disputing that Goa is very beautiful from June to September.

Tourists find the low airfares, low hotel room rates attractive. Tourists coming in for the sun and beaches are turned off as it is dangerous to swim in the sea, and the Sun God goes on a holiday for most of the days.

Useful Sites:
Goa Weather (from Yahoo! Weather)

Foreign Direct Investment (FDI) in Construction Development Sector

Investment in the real estate sector in India is governed by the applicable FDI rules as on that date. A brief summary is given below. Please keep checking the RBI website for updates.




RBI/2005/127
A.P. (DIR Series) Circular No. 07

August 17, 2005

To,
All Banks Authorised to Deal in Foreign Exchange

Madam/Sir,

Foreign Direct Investment (FDI) in Construction Development Sector

Attention of Authorised Dealer (AD) banks is invited to Schedule I of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time.

2. With a view to catalyzing FDI in townships, housing, built-up infrastructure and construction development projects, Government of India, (Ministry of Commerce & Industry), vide Press Note 2 (2005) dated March 3, 2005, has decided to permit FDI upto 100 per cent under the automatic route, in townships, housing, built-up infrastructure and construction development projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure), subject to the guidelines mentioned therein.

3. Accordingly, Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations 2000 notified vide Reserve Bank Notification No. FEMA 20/2000-RB dated May 3, 2000, has been amended vide Notification No. FEMA 136/2005-RB dated July 19, 2005 [Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Third Amendment) Regulations 2005]. A copy of the Government Notification G.S.R. No. 513(E) dated July 29, 2005 incorporating the amendment is annexed.

4. Authorised Dealer banks may bring the contents of this circular to the notice of their constituents/customers concerned.

5. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,
(Vinay Baijal)
Chief General Manager

Annex

[A.P. (DIR) Series Circular No. 07 dated August 17, 2005]

Notification No.FEMA. 136 /2005-RB dated July 19, 2005

Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Third Amendment) Regulations, 2005

In exercise of the powers conferred by clause (b) of sub-section(3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No.FEMA.20/2000-RB dated 3rd May 2000, the Reserve Bank of India makes the following amendments in the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000, as amended from time to time, namely :

1. Short Title and Commencement :-

i. These Regulations may be called the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Third Amendment) Regulations, 2005.

ii. They shall come into force from the date of their publication in the official gazette.


2. Amendment of the Regulations :-

In the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 in Annexure B the following shall be added :

Sector


Investment Cap


Description of Activity / Items / Conditions


23. Townships, housing, built-up infrastructure and construction – development projects.

The sector would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure.


100%


The investment shall be subject to the following guidelines :

(a) Minimum area to be developed under each project shall be as under :

1. In case of development of serviced housing plots – 10 hectares.

2. In case of construction – development project - 50,000 sq.mtrs.

3. In case of combination project, any one of the above two conditions.

2. The investment shall be subject to the following conditions :

(i) Minimum capitalization of US $ 10 Million for wholly owned subsidiaries and US $ 5 Million for joint ventures with Indian partners. The funds would have to be brought in within six months of commencement of business of the Company.

(ii) Original investment cannot be repatriated before a period of three years from completion of minimum capitalization.
However, the investor may be permitted to exit earlier with prior approval of the Government through the FIPB.

3. At least 50% of the project must be developed within a period of five years from the date of obtaining all statutory clearances. The investor shall not be permitted to sell undeveloped plots.

4. The project shall conform to the norms and standards, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government / Municipal / Local Body concerned.

5. The investor shall be responsible for obtaining all necessary approvals, including those of the building / layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules / bye-laws / regulations of the State Government / Municipal / Local Body concerned.

6. The State Government / Municipal / Local Body concerned, which approves the building / development plans, shall monitor compliance of the above conditions by the developer.

Note: For the purpose of these guidelines, "undeveloped plots" will mean where roads, water supply, street lighting, drainage, sewerage, and other conveniences, as applicable under prescribed regulations, have not been made available. It will be necessary that the investor provides this infrastructure and obtains the completion certificate from the concerned local body / service agency before he would be allowed to dispose of serviced housing plots.

-sd/-

( Vinay Baijal )
Chief General Manager

Footnote : The Principal Regulations were published in the Official Gazette vide G.S.R. No.406 (E) dated May 8, 2000 in Part II, Section 3, Sub-section (i) and subsequently amended as under::

G.S.R.No. 158(E) dated 02.03.2001
G.S.R.No. 175(E) dated 13.03.2001
G.S.R.No. 182(E) dated 14.03.2001
G.S.R.No. 4(E) dated 02.01.2002
G.S.R.No. 574(E) dated 19.08.2002
G.S.R.No. 223(E) dated 18.03.2003
G.S.R.No. 225(E) dated 18.03.2003
G.S.R.No. 558(E) dated 22.07.2003
G.S.R.No. 835(E) dated 23.10.2003
G.S.R.No. 899(E) dated 22.11.2003
G.S.R.No. 12(E) dated 07.01.2004
G.S.R.No. 278(E) dated 23.04.2004
G.S.R.No. 454(E) dated 16.07.2004
G.S.R.No. 625(E) dated 21.09.2004
G.S.R.No. 799(E) dated 08.12.2004
G.S.R.No. 201(E) dated 01.04.2005
G.S.R.No. 202(E) dated 01.04.2005
G.S.R.No. 513(E) dated 29.07.2005


Source: Reserve Bank of India - http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=2449&Mode=0#1

Coastal Regulation Zone (CRZ)

Goa has a coastline of 105 kms, with the Arabian Sea to its West. The coastline is dotted with beaches that draw tourists from the world over.

As per the Environment Protection Act 1986, The Ministry of Environment and Forests (MoEF) issued a notification in February 1991 for regulation of activities in the coastal area. As per the notification, coastal land up to 500m from the High Tide Line (HTL) and 100m along banks of creeks, estuaries, backwater and rivers subject to tidal fluctuations has been declared as the Coastal Regulation Zone (CRZ).

All ‘constructions/developments’ (including houses, hotels and resorts) located within 500 mts. of the High Tide Line (HTL) along the sea coast and within 100 mts. (or the width of the water body, whichever is less) of the HTL on the banks of rivers/ creeks/ backwaters’’ influenced by tidal action require prior clearance under the CRZ Notification of 1991.

Checklist when buying under construction property

Whenever you are buying under-construction property in Goa / off-plan property in Goa (or for that matter anywhere in the world), there are a number of things you should check to safeguard your investment. This is necessary, as sometimes, a place may have archaic laws, corruption, greedy builders, and many people out to make a fast buck - at your expense.

In Goa, it is necessary to have approval from all living family members for purchase/sale of ancestral property. This has obviously been done to safeguard everybody who has a legal right on a property. However, it makes the process of purchasing that much more complicated. In some places, a builder may start the construction without having all necessary approvals. The No Objection Certificate may be missing from, say, the Water department or Electricity department. The construction approval may be for, say, 3 floors, and the builder may build 4. Plan X may have been approved, and the construction may be for a Plan Y. The agreement between the owner of the land and the builder may be cause for concern. Construction in a particular area is limited by the regulations, for example, that clearly specify the setback (open space) needed in front of and around a construction, and the height of the building. Any construction that is close to the coast is also governed by the CRZ (Coastal Regulation Zone) rules.

To safeguard your investment, you should
- Buy properties in projects that are approved by a reliable bank like HDFC, ICICI, SBI etc.
- Hire a good independent lawyer, and
- Checking an older construction of the same builder

At GoaProperty.co.in, we are in a position to help you rule out certain projects that you may shortlist and narrow down to the best property for your particular requirements. We use our experience and local knowledge to work with you.

PURCHASE OF LANDED PROPERTIES IN GOA BY FOREIGNERS

PURCHASE OF LANDED PROPERTIES IN GOA BY FOREIGNERS - A FACTUAL POSITION OF LAW- SUGGESTIONS- by P.V.S. Sardessai

Sirs,
The current discussion in the media on the topic of purchase of properties in Goa by foreigners appears not to be emphasizing on the main issue i.e. the enforcing measures that are to be taken:-

(a) for ensuring that the already existing laws like the Foreign Exchange Management Act, 1999 read with the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 are enforced in the right spirit by the authorities under those statutes or by the Home Department and

(b) Empowering other Public Officers like (i) the Sub-Registrars appointed under the Registration Act, 1908 to withhold the registration of such documents till the proper authorities under the FEMA or the Home Department etc. issue a Clearance or No Objection Certificate for the registration of such documents of foreigners or on (ii) the authorities subsequently mutating the properties in the name of the foreigners.

It is hoped that in today’s discussions, these points would be touched.

Based on my personal experiences before retirement as the Goa State level Officer in the Registration Department, I am attaching hereto some annexures to help in getting a clear and actual picture on the aspect of the registration of documents of foreigners. The same are on the following specific topics:-

Annexure A - The Nature of the Registration Process.
Annexure B - The FEMA vis a vis The Registration Act.
Annexure C - Some Gaps in the Implementation Machinery.
Annexure D - Suggested Line of Approach.

Sd/-
(Adv P.V.S. Sardessai)
Retired State Registrar of Goa.

ANNEXURE – A

A] THE NATURE OF THE REGISTRATION PROCESS:-

1) It is a well settled position in law, buttressed by uniform judicial decisions, that the Sub-Registrars appointed under the Registration Act 1908 have little discretion under that Statute of Parliament to refuse registration to documents presented for registration, when such documents happen to meet all the prescriptions under the said Act and the requirements under any other law which “has been definitely made supplemental to the Registration Act”. Section 35 of the said Act using the word ‘shall’ is also very specific ad categorical about this aspect. Moreover, Rule 40 of the G.D.D. Registration Rules 1965 further emphasizes this position when it opens up with the following words: “ (1) Before accepting any document for registration, a registering officer may not concern himself with its validity, but shall ascertain …. “ etc.

2) The supplemental laws mentioned above usually are in the format of a non obstante (notwithstanding) clause in the later Act, expressly providing that ‘notwithstanding anything in the Registration Act 1908, no Registering Officer appointed under that Act shall register a document unless’ some condition is satisfied.

Such prescriptions are normally enacted in the concerned subsequent Acts directing the Registering Officers appointed under the said Registration Act in the following manner:-

(i) ‘not to register’ till some N.O.C. or Clearance certificate from a prescribed authority is furnished. In such cases, there is no prohibition against accepting a document validly presented for registration. In such cases the Registering Officer has to accept the document presented for registration and proceed with all the registration formalities under the Act short of ordering the same for registration. The document will be kept pending till the parties remove the express impediment mentioned in the supplemental law. Some examples are : A tax clearance certificate under Sec 230-A of the Income –tax Act 1961 (now omitted) or N.O.C. under sec 49(6) of the G.D.D. Town & Country Planning Act 1974. As and when such impediment is removed, the document is necessarily to be registered without any unreasonable delay as laid down in the statutory rules.

(ii) Another type of such restraining condition is to direct that till the prior requirement is met, the document shall ‘not be accepted for registration’. In such cases the Registering Officer cannot take up any part of the registration procedure at all, including the acceptance of a presented document. Such provisions being of a more fundamental and drastic nature, they are usually embodied in the Rules or in the Act itself, some examples being: the direction to refuse to accept where a document is not accompanied by its True Copy under the 1986 Amendment to the Registration Rules, or as in the Maharashtra State, the supporting documents like clearances etc, are to necessarily accompany the documents at the time of the presentation itself and not later, so that documents are not kept pending in office indefinitely till the parties comply. (This has also relevance to the computerization of registration procedure which incidentally is going to be shortly introduced in Goa too).

3) The registering officers are quasi judicial authorities, all the proceedings before them being declared under sec 84 (3) of the said Act as “judicial proceedings” for purpose of sec 228 of he Indian Penal Code i.e. in cases of interruption (obviously without authority of some statutory provision) and insult. The officers are also statutorily required to give promptly and free of cost, copies of their orders of refusal to the affected parties, clearly and expressly mentioning therein the legal grounds and he reasons for their refusals which could in turn be challenged by the interested parties in an appeal and thereafter, if the refusal is upheld, by filing a suit in a Civil Court.

It follows that the Sub-Registrars cannot refuse registration at the request or whimsical directions of others when such directions are not founded on any express statutory powers authorizing the interruption of the registration procedure.

4) It is also a well settled position in law that “ it is no part of the duty of a Registering Officer to embark on any inquiry into the legality of a document or to consider extraneous issues like: whether the document is hit by some other law, or about the truth or falsity of any recital in the deed, the fact of payment of consideration or similar issues, while accepting a document for registration” He is not even expected to read out the document to the parties before recording their admission of execution. The statutory procedure for registration is formal and rigid and the inquiry by the registering officers is restricted to the matters prescribed within the four corners of the Act as well as in the provisions of any other law ‘made expressly supplemental to the Registration Act’. The prime object of registration is to authenticate and record documents and make available certified copies therefrom for evidentiary purposes. A Registering Officer acting outside the scope of his statutory duties by refusing documents without statutory authority would be opening himself for challenges in Court and also for possible allegations of malafides or ulterior motives.

ANNEXURE – B

B] THE FOREIGN EXCHANGE MANAGEMENT ACT & REGISTRATION

At the outset itself, it is to be made clear that the FEMA contains no restricting provisions restraining registration of documents of foreigners. So also, none of its provisions is seen to have been made ‘expressly supplemental to the Registration Act 1908, to refuse or delay the registration of the documents of foreigners. Such an act would be ultra vires his statutory mandate. Also, the present article writer, after the news reports, carried on inquiries with the Registration Department and learns that as on the date of this article, no written instructions have been issued by the Govt, or by other statutory authorities to the registering officers not to register property documents of the foreigners as mentioned in some articles or that any disciplinary action was contemplated in this matter for alleged breach of any rules by these officers while registering documents of foreigners. In fact, it is doubtful whether any action could be legally taken in the matter, when no statutory prescriptions under the law, as it stand at present, were breached.

ANNEXURE – C

C] SOME GAPS IN THE IMPLEMENTATION MACHINERY

I had been privy to some developments in the matter while in service and mention hereunder some events/facts as they actually occurred:-

1) In November 1998, the Goa Govt., under information from the Govt. of India, Ministry of Finance (Department of Economics Affairs) New Delhi, issued instructions to the Sub-Registrars to insist on the permission of the Reserve Bank of India while registering acquisition of property documents by foreigners on short tourist visas. These instructions were issued in view of Section 31 (1) of Foreign Exchange Regulation Act 1973. This was also given wide publicity in the offices of the Sub-Registrars. These instruction were logically in force till the said FERA was repealed by Sec 49 of the Foreign Exchange Management Act, 1999 which liberalized and made clear the rules in respect of the purchase and transfer of properties by foreigners.

2) However, a practical difficulty arose in that the R.B.I. would not issue any permission in writing in individual cases of sale deeds on the grounds that ‘eligibility or residential status of individuals is not decided by RBI but by the operation of law i.e. the provisions contained under FEMA, 1999’ The RBI issued replying letters against the applications by foreigners mentioning only the legal position viz. that a foreigner could buy property if he met the conditions laid down in section 2(v)(i)B of the FEMA i.e. if he were a ‘resident’ within the meaning of that section. The issue about the actual control and verification of the averments by foreigners, in keeping with the spirit of the Govt. of India instructions continued to remain in suspended animation.

3) A strange fall out of this state of affairs was that the sale deeds and other property documents of foreigners started remaining pending in the offices indefinitely, the Sub-Registrars hesitating to register the same in view of the spirit of the November 1998 instructions of the Govt. issued under the repealed FERA and also being unable to refuse or indefinitely hold back the registration in view of the clear mandatory statutory provisions of the Registration laws. Under the existing laws, the Registering Officers do not happen to be the inquiring/adjudicating authorities under section 13 of the FEMA in respect of the Foreign Exchange issues. After studying the matter from the legal angle, a practical solution was chalked out which was in harmony with the requirements of the existing Registration laws as well as with those of the FEMA r.w. the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. This was done by way of instructing the Sub-Registrars to register the documents of foreigners after obtaining their affidavits declaring tht they fulfilled the conditions as to the requirement of residence as laid down in Section 2(v)(i)B of the FEMA. These instructions were also later approved by the RBI authorities.

ANNEXURE – D

D] SUGGESTED LINE OF APPROACH:

(1) The appropriate way to keep a watch and legal control on the illegal transactions by some unscrupulous foreigners, would be to enact a proper amendment (on the lines of the omitted section 230-A of the Income-tax Act 1961 or Sec. 49(6) of the G.D.D. Town & Country Planning Act 1974, by adding a non obstante clause to FEMA or to other relevant laws, requiring the Sub-Registrar appointed under the Registration Act, 1908, not to register the documents of foreigners till the concerned parties furnish a Clearance or a No Objection Certificate from some prescribed authority connected with the subject. Some authorities to be suggested would be : the ‘Adjudicating Authority under Sec. 13 of the FEMA’ or the Home Department. Merely issuing administrative instructions to the Sub-Registrars would not be desirable since the proceedings before these officers are quasi judicial in nature.

(2) Other public authorities like Mutation Officers also should be required to insist on a copy of such Clearance/N.O.C. while processing the mutation matter.

(3) Responsibility should be fixed on some Implementing Authority under the Foreign Exchange Regulations, like either “The Directorate of Enforcement” under Sec 36 of FEMA 1999 (or if deemed fit, on the Reserve Bank of India or on the Home Department of the Centre/State to issue such Clearances/N.O.C.s for the purpose of clearance of the foreigners’ transactions.

Sd/-
(P.V.S. Sardessai) Retired State Registrar & Head of Notary Services.

(Article from Goa Su-Raj Party website)

Regulations applicable for various zones in Goa

The Regulations applicable for various zones in Goa specifying the maximum ground coverage , F.A.R. and maximum height permitted for a structure.

Zone Max. Coverage Max. F.A.R. % Max. Height
S1 40% 100 15.40 m.
S2 40% 80 11.50 m.
S3 40% 60 07.60 m.
S4 33% 50 07.60 m.
C1 40% 200 24.10 m.
C2 40% 150 16.00 m.
C3 40% 100 11.50 m.
C4 40% 80 10.90 m.


FAR: Floor Area Ratio: The Floor Area Ratio (FAR) or Floor Space Index (FSI) is the ratio of the total floor area of building to the size of the land, or the limit imposed on such a ratio. FAR of 100 means that if the area of the plot is 1000 square meters, then 1000 square meters of gross floor area can be built on the plot. FAR of 200 means that if the area of the plot is 1000 square meters, then 2000 square meters of gross floor area can be built on the plot.

Ground Coverage: This is the total size of land that can be covered. Ground Coverage of 40% means that if the area of the plot is 1000 square meters, then not more than 400 square metres can be built on the ground floor, and 600 square metres has to be open land.

Property Prices in Goa

Apartments
Location INR (Rs.) USD ($) GBP (£) EUR (€)

Dona Paula 55,000 1,318 662 973

Calangute 45,000 1,078 541 796

Porvorim 27,000 647 325 478

Panaji/Miramar 35,000 839 421 619

Colva 26,000 623 313 460

Margao 18,000 431 217 319

Vasco 15,000 359 180 265

Rate per square metre (sqr. mtr.)


Villas
Location INR (Rs.) USD ($) GBP (£) EUR (€)

Colva 36,500 875 439 646

Majorda 25,000 599 301 442

Vasco 23,000 551 277 407

Rate per square metre (sq. mtr.)



Apartments
Location INR (Rs.) USD ($) GBP (£) EUR (€)

Dona Paula 5,112 122 62 90

Calangute 4,182 100 50 74

Porvorim 2,509 60 30 44

Panaji/Miramar 3,253 78 39 58

Colva 2,416 58 29 43

Margao 1,673 40 20 30

Vasco 1,208 29 15 21

Rate per square foot (sqr ft)



Villas
Location INR (Rs.) USD ($) GBP (£) EUR (€)

Colva 3,392 81 41 60

Majorda 2,323 56 28 41

Vasco 2,138 51 26 38

Rate per square foot (sq. ft.)



Conversion Table
1 square metre 10.764 square feet
1 square metre 1.196 square yards

These property prices in Goa are indicative only, and can serve as a ballpark figure to help you understand the price of your dream property. The actual prices of each property will be different subject to amenities, upkeep, & vary within the same building depending on the view, layout, demand and supply, and many other market factors of each property.

Property prices in Anjuna, Arpora, Baga, Bambolim, Calangute, Cavelossim, Colva, Dona Paula, Mapusa, Margao, Miramar, Old Goa, Palolem, Panaji / Panjim, Pernem, Ponda, Porvorim, Sinquerim, Siolim, Vasco da gama.

Real Estate Prices, Foreign Exchange Rates etc. as on 20 June 2007.

Page last updated on 21 June 2007.

Checklist - What do I look out for when buying property?

When you buy a property, you are investing a substantial amount of money and long term financial commitment.
This property is also taking care of your long term housing needs, and for most people, it is not an excercise that you will repeat very frequently in your life.

Its thus important to plan your purchase. We aim to give you a basic checklist that will make your life easier:

Budget and Affordability:
Ensure your total monthly housing loan instalment does not exceed 33% of your monthly income. This will help ensure that you have sufficient cash for fulfilling other objectives such as investment, retirement. Location is a very important consideration in the selection of your property. A well-maintained property in a good location will lead to would be better able to sustain its valuation.

Site Visit:
You should personally inspect the property before buying it. Look out for any defects.

Surroundings:
The surrounding of your property (neighbours, industries, view) are also an important consideration.

Home Loans:
When shopping for the right home loan, keep these in mind:


Loan duration: Check the maximum loan term that you can get - normally, it is 20 years or till you retire.


Plan for the rainy day: You should set aside cash to pay for at least six monthly instalments.


Payment projections: Compare the EMIs (based on different interest rate scenarios) from various banks to see if you are comfortable with the amount. Remember that interest rates change over the duration of a loan. Stay comfortable instead of stretching yourself too thin.


Extras: Check if the bank gives free Life Insurance, Burglary/ fire insurance etc.


Penalties and fore closure: Check what the fore closure charges are that will be charged to you if you do a partial or full redemption of your loan. Also check how long the penalty period is.


Other costs: These include legal fees, valuation charges, etc.

Rules to purchase property in Goa / India for Foreigners

In simple terms:
1. Foreign Nationals can form a Private Limited Company in India, and the Company can purchase property in India.
or
2. A Foreign Company with an Office in India can purchase property in India.

The details:
A foreign company which has established a Branch Office or other place of business in India, in accordance with FERA / FEMA regulations, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through proper banking channel. A declaration in form IPI should be filed with Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for other borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of Reserve Bank. Further, acquisition of immovable property by entities who had set up Branch Offices in India and incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank to acquire such immovable property. However, if the foreign company has established a Liaison Office, it can not acquire immovable property. In such cases, Liaison Offices, can take property by way of lease not exceeding 5 years.
http://www.rbi.org.in/scripts/FAQView.aspx?Id=33

Please also read the complete rules, regulations and amendments applicable from:

The Reserve Bank of India (India's Central Bank) / Foreign Exchange Management Act (FEMA)
http://www.fema.rbi.org.in/

Ministry of Company Affairs
http://www.mca.gov.in/

Foreign National FAQ

Q. What is meant by a person resident in India ?
A. From FEMA angle, a person resident in India means a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year (April-March) and who has come to or stays in India either for taking up employment, carrying on business or vocation in India or for any other purpose, that would indicate his intention to stay in India for an uncertain period. In other words, 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 (being more than 182 days during the course of the preceding financial year) but has also to comply with the condition of the purpose / intention of stay.

Q. If a foreign national (except a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan) is a person resident in India as per the provisions of Section (v) (i)B of the FEMA, 1999 does he require approval of RBI to purchase any immovable property in India ?
A. No, he does not require approval from Reserve Bank from FEMA angle. However, approvals if any, required in terms of regulations prescribed by other authorities such as the concerned State Government etc. will have to be obtained by him / her.

Q. Can a foreign national of non-Indian origin acquire residential property in India?
A. The Reserve Bank of India on an application in Form IPI I may consider favourably the acquisition of residential property by Foreign Nationals of Non-Indian origin provided:
1. The purchase consideration is met out of funds remitted from abroad.
2. The property is acquired for bonafide residential use.
3. The foreign National of Non-Indian origin undertakes not to repatriate the sale proceeds.

Q. Can a foreign national of non-Indian origin acquire residential property on a lease in India?
A. Yes. A Foreign National of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan may acquire only residential accommodation on lease, not exceeding five years for which he / she does not require prior permission of Reserve Bank of India.

Q. Can a foreign national of non-Indian origin whether resident in India or outside India transfer by way of sale residential property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India ?
A. A foreign national or non-Indian origin whether resident in India or outside India would need to seek prior approval of Reserve Bank for transfer by way of sale residential property in India acquire with the specific permission of Reserve Bank to a person resident in India or outside India.

Q. Can foreign nationals form a Private Limited Company in India and buy property to carry out business?
A. Yes.

Q. Can a person resident outside India who has established a Branch Office or other place of Business in India in accordance with FERA / FEMA regulations purchase immovable property ?
A. Yes, provided it is necessary for or incidental to carrying on such activity and all applicable laws, rules, regulations or directions are duly complied with. The purchase price should be paid by way of inward remittance through proper banking channel. A declaration in form IPI should be filled with Reserve Bank within ninety days from the date of acquisition of commercial / residential property.

Q. On winding up of the business can the sale proceeds of such property be repatriated ?
A. Yes. With prior approval of Reserve Bank.
For Latest information, please visit: http://www.fema.rbi.org.in/

NRI or PIO FAQ

NON RESIDENT INDIAN OR PERSON OF INDIAN ORIGIN.

Q. Where can one find regulations / directions issued by Reserve Bank for acquisition and transfer of immovable property in India by a person resident outside India ?
A. Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India have been notified vide RBI Notification No.FEMA 21/2000-RB dated May 3, 2000 as amended by Notification No.FEMA 64/2002-RB dated June 29, 2002, Notification No.FEMA 65/2002-RB dated June 29, 2002 and Notification No.FEMA 93/2003-RB dated June 6, 2003 and relevant directions issued in the form of A.P. (DIR Series) Circulars.
These are available on RBI website: www.fema.rbi.org.in.

Q. Under the extent foreign exchange regulations to whom is general permission available for purchase of immovable property in India ?

A. General permission is available to purchase only a residential / commercial property in India to a person resident outside India who is a citizen of India (NRI) or who is a person of Indian origin (PIO).

Q. Who is a Person of Indian Origin (PIO)?
A. For the purpose of acquisition and transfer of immovable property in India, a PIO means an individual (not being a citizen of Pakistan or Bangaladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (i) at any time, held Indian passport, or (ii) who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

Q. Is NRI / PIO who has purchased residential / commercial property under general permission required to file any documents with Reserve Bank of India?
A. NRI / PIO who has purchased residential / commercial property under general permission is not required to file any documents with the Reserve Bank.

Q. Is there any restriction on the number of residential / commercial properties that NRI / PIO can purchase under the general permission available ?
A. There is no restriction on the number of residential / commercial properties that NRI / PIO can purchase under the general permission available.

Q. Can a person resident outside India (i.e,. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land / plantation property / farm house in India by way of purchase ?
A. No. A person resident outside India cannot acquire by way of purchase agricultural land / plantation property / farm house in India.

Q. Under the general permission available what is the mode of payment for purchase of residential / commercial property in India by NRI / PIO ?
A. Under the general permission available NRI / PIO may purchase residential / commercial property in India out of funds remitted to India through normal banking channel or funds held in his NRE / FCNR (B) / NRO account. No consideration shall be paid outside India.

Q. Can refund of application / earnest money / purchase consideration made by the house building agencies / seller on account of non-allotment of flat / plot / cancellation of bookings / deals for purchase of residential / commercial property together with interest, if any (net of income tax payable thereon) be credited to NRE account ?
A. Yes, provided original payment was made by way of inward remittance or by debit to NRE / FCNR (B) account. For this purpose no permission of Reserve Bank is required and they may approach the authorised dealer directly in the matter. (Please refer to A.P. (DIR Series) Circular No.46 dated November 12, 2002.

Q. Can NRI / PIO for the purpose of acquisition of flat / house in India for his own residential use avail of loan from an authorised dealer against the security of funds held in his NRE Fixed Deposit account / FCNR (B) account?
A. Yes, subject to certain terms and conditions (Please refer to Schedules 1 and Schedules 2 to Notification No.FEMA 5/2000-RBI dated May 3, 2000).

Q. Can NRI / PIO, avail of housing loan in rupees from an authorised dealer or housing finance institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation ?
A. Yes, subject to certain terms and conditions. Such loans can be repaid by the borrower by way of inward remittance through normal banking channel or by debit to his NRE / FCNR (B) / NRO account or out of rental income derived from renting out such property. Such loan can also be repaid by the borrower's close relatives through their account in India by crediting the borrower's loan account (Please refer to Regulation 8 of Notification No.FEMA 4/2000-RB dated May 3, 2000 and A.P. (DIR. Series) Circular No.95 dated April 20, 2003 and A.P. (DIR Series) Circular No.94 dated May 25, 2003).

Q. Can NRI / PIO repatriate the sale proceeds of residential / commercial property in India acquired by way of inward remittance through normal banking channel or by debit to NRE / FCNR (B) account ? If so, what is the quantum ?
A. NRI / PIO may repatriate the sale proceeds of residential / commercial property in India acquired by way of inward remittance through normal banking channel or by debit to NRE /FCNR (B) account. The amount to be repatriated should not exceed the amount paid for acquisition of residential / commercial property (a) in foreign exchange received through normal banking channel or by debit to FCNR (B) account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid by debit to NRE account.
From out of balances in NRO A/c. he may remit upto USD one million per calendar year, eligible balances including the sale proceeds of immovable property if such property has been sold after being held for 10 years. If such a property was held for less than 10 years, remittance can be made if the sale proceeds were held for the balance period in NRO A/c. (Savings / Term Deposit) or any other eligible investment, provided, such investment is traced to the sale proceeds of the immovable property. (For details please refer Reg.4(3) of FEMA 13 dated May 3, 2000 as amended)

Q. Is there any restriction on number of residential properties in respect of which sale proceeds can be repatriated by NRI / PIO ?
A. Yes. Repatriation of sale proceeds is restricted to not more than two residential properties.

For latest information, please visit: http://www.fema.rbi.org.in/

Loan FAQ

What is an EMI?
You repay the loan in the form of Equated Monthly Instalments (EMIs) which is made up of 2 parts- principal and interest. Loan repayment EMI begins from the month in which you take full disbursement.

What is pre-EMI interest?
Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement upto the date of commencement of EMI. Some Financial Institutions, on you request, could consider to start the EMI before the loan is fully disbursed.

What are the different interest rate options available?
1. Floating Rate of Interest- the Rate of Interest is reviewed periodically every six months based on the prevailing market conditions and RBI policies. The revised Floating Rate of Interest could increase, decrease or remain the same.2. Fixed rate of Interest- The Rate of Interest ordinarily remains the same throughout the term of the loan.3. 2 in 1 rate of interest- This Home Loan provides customers with a choice of breaking up the loan requirement into Floating and Fixed Rate loans.

What is the method of calculation of Interest Rate?
Methods of calculation would include- Flat Rate - Total interest calculated for the term and then divided by the number of months- Reducing Balance (monthly/Quarterly/Annually)- Compounded

Can I repay my loan ahead of schedule?
Yes, you can repay the loan ahead of schedule but some companies have prepayment charges.

How much does a Housing Finance company lend?
Loan amount is determined on the basis of the repayment capacity of the applicant/s. Repayment capacity takes into consideration factors such as age, income, dependents, assets, liabilities, stability of occupation and continuity of income, savings etc. The maximum loan varies from company to company. Most companies extend loans upto 85 % of the cost of property (including Stamp duty, Registration charges, and other govt. charges).

What is the period for which I can Get a Loan?
The maximum period of the loan is 20 years subject to age of retirement or completion of 70 years whichever is earlier.

What Is The Security For The Loan?
The security for the loan is the first mortgage of the property to be financed by way of deposit of the title deeds, subject to local laws. Guarantors are usually asked for.

What is the procedure to apply for a loan?
NEW FLAT:
Firstly the Purchasers has to enter into a Registered Agreement of Sale with the Builder and pay the requisite margin money. Then he has to approach the Financial Institution and collect the necessary details including application form from them. On application, copy of registered agreement, registration receipt, receipt of payments made and NOC from Builder have to be handed over to the Financial Institution.
In case of purchase of a new flat, loan will be disbursed in installments depending on stage wise progress of work.

Supporting Documents:
Requirements for Salaried Applicants:
Employer's salary certificate in requisite format/and latest salary slip.
Photo Identity
TDS certificates, ESIC/ PPF certificate

Requirements for Businessmen / Self-employed:
3 years IT returns together with P/L account, etc duly certified by a Chartered Accountant

Does the applicant get a tax benefit on the loan?
Yes. Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Interest repayment of Rs. 1,50,000 p.a. can get you a tax saving upto about Rs. 50,490 p.a. Moreover, you can get added tax benefits under Sec 80 C on repayment of principal amount upto Rs. 1,00,000 p.a. that can further reduce your tax liability by about Rs. 33,660 p.a.

Do financial Insitutions finance purchase of land?
Yes, some financial institutions finance purchase of land either for construction of your own house or just as an investment for the future.