How Can NRIs Update Their KYC Details?
The Indian real estate sector continues to observe a steady rate of growth in investments made by Non-Resident Indians (NRIs). The real estate sector in India is a promising investment opportunity for NRIs due to a multitude of factors such as a higher standard of living for NRIs, higher currency valuations, as well as the accelerating growth of infrastructural capabilities in the country. With a significant amount of savings in foreign nations, NRIs are looking back home to create wealth creation opportunities.
Non-Resident Indians (NRIs) looking for real estate investment opportunities in India need various legal and tax compliances to adhere to before acquiring or selling property in the country.
In recent years, the gamut of Government initiatives, like classifying NRI investments as domestic investments and abolishing wealth tax, the country has seen rapid growth in foreign investments, with the real estate sector being no different. Thus, the country has witnessed massive investments in recent years, with Rs’43,780 crores as investments in 2019.
However, before beginning transactions on a property in India, NRI investors must comply with a set of legal formalities mandated by the government.
Legal Compliances for NRI Investors in India
Following are the key legal compliances that NRI investors need to fulfill before investing in property in India:
Before making any investment in India, NRIs need to produce a copy of their passport, including their name, photograph, date of birth, and address. They will also need to furnish a copy of their PAN (Permanent Account Number) along with their overseas address as a permanent or correspondence address.
Mode of Payment
All payments made or received towards property transactions have to be made via banking channels in India. An NRI can open an NRO bank account with any Indian bank without the permission of the Reserve Bank of India (RBI). Only Indian currency can be used for such transactions.
Title of Property
The NRI also needs various other documents that confirm their title towards the real estate. These include the title deed, previous title deed, recent tax receipts, updated encumbrance certificate, and the building permit from Municipal Corporation (if necessary).
KYC Process for NRI Investors in Real Estate
Investment in the real estate sector in India requires the NRI to be KYC compliant. These KYC details include in-person verification (IPV), identity and address verification, financial status, occupation, and other personal details as may be deemed necessary.
To be fully KYC compliant, NRIs need to complete the following formalities:
KYC Form is available online on the websites of KYC Registration Agencies (KRAs). This form needs to be duly filled and submitted in person to such agencies. NRIs can also fill in the details and courier the form if the In-person verification (IPV) is complete.
To complete the KYC process, NRIs need to submit a recent photograph, a copy of the PAN Card, identity and address proof, a certified copy of passport, and their overseas and permanent address.
As a requirement in the KYC procedure, NRIs need to get their above documents attested by officials of overseas branches of scheduled commercial banks registered in India, public notaries, judges or court magistrates, or the Indian Embassy or Consulate General of the country that such NRIs reside.
The IPV has to be completed by a certified distributor of NISM/Amfi with full compliance with know your distributor (KYD) guidelines or scheduled commercial banks.
How To Update KYC Details Online?
NRIs are required to have their KYC details up-to-date. KYC Registration Agencies (KRA) are the body where NRIs can update their KYC details. Any information inconsistent with the NRI’s current status will make them ineligible to invest in real estate in the country.
As per the guidelines laid down by the Reserve Bank of India (RBI), all banking institutions have to update their account holders’ customer identification details periodically. During these times, account holders need to undergo re-KYC and submit the necessary documents again.
How Can NRI Update Their KYC Status?
NRI KYC details are maintained by KYC Registration Agencies in India, while all investments and earnings on real estate go through banks. All KYC Registration Agencies accept KYC documents in a scanned format. Investors may update their details in the system by filling out the KYC update form with any KRA.
Additionally, banks also maintain the KYC details of NRI investors in India. These details are available online and can be updated through the same. NRIs can update their KYC as per the follows:
A scanned copy of the re-KYC Form along with the requisite documents can be submitted through the registered email ID of the NRI to the bank.
NRIs can also send the re-KYC documents and the necessary documents via courier.
Submission of the re-KYC form and required documents can also be made in person by the NRI to their respective home branch.
Documents Required for KYC
NRIs need to submit the following documents to update their KYC details:
- NRIs need to enter their account number on the official website of the banks they have an account with, followed by captcha validation.
- Upload their valid passport
- Upload documents issued by foreign government departments (VISA, Resident permit, etc.)
- Upload PAN Card or Form 60 if PAN is not available
- FATCA/CRS declaration forms which can be downloaded from FATCA and CRS
NRIs must learn about all legal compliances before making investments in real estate in India. As an NRI, there are various norms and regulations that one must follow, including the Know Your Customer (KYC) formalities. The Government mandates this as prevention of false facts and money laundering through real estate investments.
To avoid a legal conflict later, NRI investors should hire real estate investment experts and make investment decisions based on solicited advice. These experts can also help with the KYC and re-KYC formalities with KRAs to avoid hassles for the NRI investor. One such expert is Assetmonk that brings the best real-estate properties and offers from all over the country to NRI investors.
KYC For NRI FAQ's:
The Reserve Bank of India has made PAN cards mandatory for individuals who wish to open bank accounts in India. The RBI announced the updated KYC (know-your-customer) requirement was subjected to the Supreme Court’s final judgment on PAN and made it necessary for KYC.
The RBI has made its OVD (Officially Valid Documents) up to date and the list has added: “Proof of Aadhaar number” for opening bank accounts. Although, It is not necessary to furnish an Aadhaar to open bank accounts at present.
NRIs would need a recent photograph, PAN card, proof of Identification as well as address proof, a certified copy of Passport, permanent address, overseas address, and PIO card (only for PIOs). In case of an NRI in the Merchant Navy, the mariner’s declaration or a certified copy of the Continuous Discharge Certificate is required to be submitted.
Checking the KYC Status could be done at any of the registered KYC Registration Agencies (KRA) such as the CDSL Ventures or the CAMS Investor Services.
Yes, under certain general guidelines of the RBI, an NRI is entitled to acquire commercial or residential property through a gift from an NRI, a person resident in India, or a PIO.
Yes, an NRI can purchase property in India jointly with any other NRI, Indian citizens, or PIO
No, a PIO or an NRI cannot purchase a property in India jointly with any other foreign citizen.
Resident Indians or any other person who is not permissible to buy properties in India could not become joint investors in such cases, irrespective of the second holders’ contribution to the transaction. However, under the RBI’s general permission, an NRI could purchase a property, either individually or with joint mode with any other NRI.
The eligibility is based in the same way as it is for the resident Indians with crucial emphasis on certain fields such as the minimum education level which is Graduate, the Present job profile and the total work experience as well as the chances of continuing that for the rest of the loan period.
Yes, the Reserve Bank of India has granted general permission for the sale of property or land. But, if a foreign citizen of Indian origin purchases the property or land, the total amount towards the purchase shall be remitted to India or paid out of the balances in the non-resident accounts which are managed with banks in India.