According to the latest rules regarding the OCI cardholders, Indian origin people who moved out from India for employment or business, NRIs with foreign citizenship, and OCI (Overseas Citizenship of India) cardholders are not allowed to buy and sell properties in India.
There are several millions of OCIs/PIOs who are concerned about this new ruling. Most people have raised concerns about their properties in India. All those who invested their earning for a retirement home or bought it for their children or have family properties find themselves in a fix. If everyone starts selling their properties in India, it may affect the whole Real Estate market in India. Already, after demonetization and now with covid, it was still the Diaspora who kept buying properties in India.
Also last February the Supreme Court ruled out that any sale or gift of a property by a foreigner without prior permission of the RBI would be illegal.
“We hold that the condition predicated in Section 31 of the Foreign Exchange Regulation Act, 1973 of obtaining “previous” general or special permission of the RBI for transfer or disposal of immovable property situated in India by sale or mortgage by y a person, who is not a citizen of India, is mandatory,” a bench presided over by Justice A M Khanwilkar said.
But the court announced that the transactions which have already become final including by virtue of the decision of the court of competent jurisdiction, need not be reopened or disturbed in any manner due to this sudden announcement.
This direction is being issued in exercise of our plenary power under Article 142 of the Constitution. For, there has been a paradigm shift in the general policy of investment by foreigners in India and more particularly, the 1973 Act itself stands repealed,” the bench said.
The court referred to the legislative intent and the spirit of enactment of Section 31, which, it said, was manifest from the statement of the then Finance Minister while tabling the Bill in the Lok Sabha that as a general policy foreign national cannot be allowed to deal with real estate in India.
There is little doubt that the requirement of “previous” permission of the RBI, to be taken by a foreign national before transacting in real estate, is mandatory. In other words, without the previous permission of the RBI, such a transaction is forbidden and if entered into, would be unenforceable in law,” the court said.
The other OCI guidelines on renewal which have been in force since 2005 are as follows:
- It is mandatory to carry both old and new passports in case the OCI cardholders are traveling on the strength of OCI card bearing old passport number in it.
- OCI card is required to be re-issued each time a new passport is required by the cardholder up to the age of 20 years.
- OCI card is required to be re-issued once and acquiring a new passport after completing 50 years of age.
The Government of India has given an extension in time till June 30th, 2021 to get OCI Cards re-issued in accordance with the above guidelines