In terms of Section 31(1) of FERA 1973, persons who are not citizens of India (whether resident in India or not) and companies (other than banking companies) which are not incorporated under any law in force in India are required to obtain prior permission of Reserve Bank to acquire, hold, transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise any immovable property situated in India. The work relating to the permission for acquisition etc. of immovable property is centralized in the Central Office of Reserve Bank (Foreign Investment Division) at Mumbai.

NOTES:
A.The above restrictions do not apply to immovable property taken or given on lease for a period not exceeding five years.

B.Prior permission of Reserve Bank is necessary for acquisition, disposal etc. of flats in co-operative housing societies.

C.Nepalese or Bhutanese nationals, whether resident in India or not, as well as Nepalese companies in Nepal or Bhutanese companies in Bhutan should obtain prior permission of Reserve Bank for acquisition, holding, etc. of immovable property in India even though the transactions may be settled in Indian rupees.

D.In the case of partnership firms, if any of the partners is a foreign citizen, the firm should obtain permission of Reserve Bank for acquisition/disposal of the immovable property. Likewise, if any member on the governing body of an association/organisation or any trustee of a trust is a foreign citizen, such a body/trustee should obtain Reserve Banks permission under Section 31(1) of FERA 1973.