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 - FEMA - 046

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 RESERVE BANK OF INDIA EXCHANGE CONTROL DEPARTMENT CENTRAL OFFICE MUMBAI 400 001 A.P. (DIR Series) Circular No.46 November 12, 2002 To All Authorised Dealers in Foreign Exchange Madam / Sirs, 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). Yours faithfully, Grace KoshieChief General Manager