Key Guidelines for Dual Citizens Purchasing Property in TamilNadu: 20 Essential Points

Introduction
For dual citizens looking to invest in property in Tamil Nadu, it is crucial to navigate the complex legal and regulatory landscape carefully. Understanding the rules and regulations set by Indian authorities and the Reserve Bank of India (RBI) can help ensure a smooth and compliant property transaction. This guide provides 20 important points that dual citizens need to know before purchasing property in Tamil Nadu.

1. Regulatory Framework for Foreign Transactions
   When purchasing, selling, or transferring property rights in Tamil Nadu from abroad,
   Indian governmental agencies, including the Ministry of Overseas Indian Affairs and
   the Reserve Bank of India, have established specific regulations.
2. Ensuring Compliance
   It is essential to understand these regulations to ensure that property transactions are
   conducted with reputable parties and comply with legal requirements.
3. Non-Resident Indians (NRI) Definition
   Indians living abroad who wish to buy property in India are commonly referred to as
   Non-Resident Indians (NRIs).
4. OCI and PIO Cardholders
   NRIs are categorized into two types with distinct identification cards: Overseas
   Citizens of India (OCI) and Persons of Indian Origin (PIO).
5. Distinctions between OCI and PIO
   OCI stands for Overseas Citizens of India, while PIO refers to Persons of Indian
   Origin. In Tamil, OCI is often referred to as “foreign residents” and PIO as
   “descendants of Indian origin.”
6. Terminology Clarification
   The term NRI should be used to refer to “Indians not residing in India” rather than
   “foreign residents.”
7. FEMA Regulations
   For all property transactions in Tamil Nadu, including buying, selling, or gifting, the
   Foreign Exchange Management Act (FEMA) regulations must be adhered to.
8. Restrictions on OCI and PIO OCI and PIO cardholders are generally prohibited from purchasing agricultural land,
   plantations, and farmhouses. However, there have been instances where they have
   acquired such properties in gated communities.
9. Enhanced Scrutiny
   When selling such properties, careful attention and Reserve Bank of India (RBI)
   approval are required. The process has become more stringent with the advent of
   Aadhaar and online registration systems.
10. FEMA and FER Act
    FEMA is a revised version of the Foreign Exchange Regulation Act (FERA), which
    was initially introduced in 1971. FEMA was enacted in 1999 to regulate foreign
    exchange transactions more effectively.
11. Employment and Property Restrictions
    Individuals from countries like Pakistan and Bangladesh cannot obtain the LICI card
    and, consequently, are not permitted to buy or sell property in Tamil Nadu.
12. Restrictions for Certain Nationalities
    Nationals from Pakistan, Bangladesh, Bhutan, China, Sri Lanka, Afghanistan, Iran,
    and Nepal are prohibited from purchasing property in India unless they renounce their
    previous citizenship and obtain Indian citizenship.
13. Historical Citizenship Changes
    Individuals who migrated from Pondicherry to France before 1961, and now hold
    French citizenship, are categorized as either OCI or PIO.
14. Upcoming Legal Changes
    The Citizenship Amendment Act, National Population Register (NPR), and National
    Register of Citizens (NRC) may impact FEMA regulations related to property
    transactions.
15. High-Value Transactions
    For transactions exceeding USD 1 million (approximately INR 60 lakhs), OCI and
    PIO cardholders must seek approval from the RBI.
16. Property Types for OCI
    OCI cardholders can purchase residential property, commercial properties, and land
    for business purposes in Tamil Nadu. However, they can only sell properties to Indian
    residents, other OCI cardholders, or PIOs.
17. Property Transactions for PIOs PIOs are subject to similar rules as OCI cardholders and must comply with FEMAregulations when buying or selling property.
18. Property Acquisition After Renouncing Foreign Citizenship
    Individuals from Bhutan, Burma, Sri Lanka, China, Afghanistan, Pakistan, and
    Bangladesh can purchase property in Tamil Nadu only after renouncing their previous
    citizenship and obtaining Indian citizenship with RBI approval.
19. Leasing Option
    Foreign nationals and foreign-owned entities cannot purchase property in Tamil Nadu.
    However, they may lease property for up to five years.
20. Company Formation and Property
    OCIs and PIOs can establish companies in India. Under company law, they may
    acquire property, including agricultural land, but must obtain RBI approval if the land
    is agricultural or plantation.

Conclusion
For dual citizens, navigating the property acquisition process in Tamil Nadu involves understanding and adhering to various legal and regulatory requirements. By following these 20 essential points, dual citizens can ensure compliance with FEMA regulations, avoid legal pitfalls, and make informed property investment decisions.

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