A PIO means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who –
- At any time, held an Indian Passport or
- either of whose father or mother or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955
Reserve Bank of India (RBI) frames regulations to acquire or transfer immovable property in India by person residents outside India.
As per the latest circular issued by RBI (as on 2014) the following are the regulations –
Purchase of immovable property – A PIO can acquire by way of purchase residential or commercial property in India. However, PIO is not allowed to purchase (or sell or transfer) agricultural land or plantation property or farm house in India
Inheritance of immovable property – A PIO can acquire by way of inheritance from a person resident in India or a NRI or a PIO.
Gift of immovable property (except agricultural/plantation property/farm house)
- To a person resident in India or
- To a person resident outside India, who is a citizen of India (NRI) or
- Another PIO
Sale of property to another PIO – There is a restriction! A PIO can sell the property to another PIO with the prior approval of RBI. One has to apply to RBI, New Delhi (not to any regional offices of RBI) seeking approval. The application can be in a plain paper mentioning the reasons of selling the property to another PIO other than resident Indians. If RBI is convinced with the explanation of the PIO seller, they will grant the permission.
Number of Properties – There is no restriction on the number of properties that can be purchased by a PIO
Funds for purchase
- Inward remittance through normal banking channels (means travelers cheque or foreign currency notes brought along while travelling or any other mode is not acceptable)
- Withdrawal from NRO or NRE or FCNR(B) account
Reporting to RBI – A PIO who has purchased residential/commercial property as per the above guidelines is not required to file any documents with RBI
Selling inherited Agricultural/plantation/farm house property – What happens if a PIO has inherited property which he wants to sell? Yes. He can sell it to a person resident in India who is a citizen of India.
Taking loan against the property – A PIO can mortgage the property to the bank in India without any approval from RBI. He can also mortgage to foreign banks with the prior approval of RBI.