AP (DIR Series) (2002-2003) Circular No. 46, dated 12-11-2002
Refund of purchase consideration on account of non-allotment of flats/plots/cancellation of bookings/deals in respect of immovable property purchased by NRIs/PIOs in India
Attention
of authorised dealers is invited to paragraph 3(i) of Schedule 1 to Reserve
Bank of India. Notification No. FEMA 5/2000-RB dated May 3, 2000 in terms of
which, refund of application/earnest money made by the house building agencies
to Non-Resident Indians (including Persons of Indian Origin) on account of non-
allotment of flat/plot, together with interest, if any (net of income-tax
payable thereon), is permitted to be credited to NRE A/c. of the account holder
provided the original payment is made out of NRE/FCNR account of the account
holder or from remittance received from outside India through normal banking
channels and the authorised dealer is satisfied about the genuineness of the
transaction.
2. With a
view to allow credit to NRE/FCNR account of refund of purchase consideration by
seller on account of cancellation of bookings/deals for purchase of
residential, commercial property. Reserve Bank has issued Notification No. FEMA
64/2002-RB dated June 29, 2002 (copy enclosed) amending the above Notification.
Accordingly, it will be in order for authorised dealers to allow Non-Resident
Indians/Persons of Indian Origin to credit refund of application/earnest
money/purchase consideration made by the housing 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), to NRE/FCNR account, provided, the
original payment was made out of NRE/FCNR account of the account holder or
remittance from outside India through normal banking channels and the authorised
dealer is satisfied about the genuineness of the transaction.
3. Sub-paragraph
(i) of paragraph 3 of Schedule 1 of the Notification No.FEMA 5/2000-RB dated
May 3, 2000 viz. Foreign Exchange Management (Deposit) Regulations, 2000
may be substituted as indicated in the copy of the Notification enclosed.
4. Authorised
Dealers may bring the contents of this circular to the notice of their
constituents concerned.
5. The
directions contained in the circular have been issued under section 10 (4) and
section 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999).