What an Overseas Citizen of India cardholder may and may not do in India: rights, property, work and cancellation

An Overseas Citizen of India (OCI) cardholder is a foreign national, and the Ministry of Home Affairs (MHA) notification S.O. 1050(E) of 4 March 2021, made under section 7B of the Citizenship Act, 1955, gives the cardholder a lifelong multiple-entry visa, parity with a Non-Resident Indian (NRI) on buying and selling immovable property other than agricultural land, a farm house or plantation property, and the rights of a foreigner in every other economic, financial and educational field. Four heads of activity need special permission, and the registration can be cancelled under section 7D.

What does section 7B give, and what does it take away?

The Citizenship Act, 1955 treats an OCI cardholder as a separate class. Section 7A lets the Central Government register as an OCI cardholder a foreign citizen who was a citizen of India after the Constitution began, was eligible to become one on that day, belonged to a territory that joined India after 15 August 1947, or is a child, grandchild or great grandchild of such a person. It also reaches a minor child of those persons, a minor child with a citizen parent, and the foreign-origin spouse of a citizen or of a cardholder whose registered marriage has subsisted for two years and who has security clearance. No person who, or either of whose parents, grandparents or great grandparents, is or was a citizen of Pakistan, Bangladesh or another notified country is eligible. Section 7B(1) then says that, notwithstanding any other law, the cardholder is entitled to "such rights, other than the rights specified under sub-section (2), as the Central Government may, by notification in the Official Gazette, specify".

Section 7B(2) is the list of what the card cannot carry. A cardholder has none of the rights of a citizen under article 16 of the Constitution on equal opportunity in public employment, article 58 on election as President, article 66 on election as Vice-President, article 124 on appointment as a Judge of the Supreme Court or article 217 on appointment as a Judge of a High Court. The Representation of the People Acts of 1950 and 1951 also exclude voter registration and membership of Parliament or a State legislature. Appointment to public services and posts under the Union or a State is also outside the card, "except for appointment in such services and posts as the Central Government may by special order in that behalf specify".

What does S.O. 1050(E) specify?

The Central Government used the power in section 7B(1) on 4 March 2021, in Notification S.O. 1050(E) of the MHA, which superseded the earlier notifications of 11 April 2005, 5 January 2007 and 5 January 2009. Its Explanation states the premise in one sentence: an OCI cardholder "is a foreign national holding passport of a foreign country and is not a citizen of India." The rights it lists are these.

• A multiple-entry lifelong visa for visiting India for any purpose.
• Exemption from registration with the Foreigners Regional Registration Officer for any length of stay. A cardholder who is normally resident in India must tell that officer by email when the permanent residential address or the occupation changes.
• Parity with Indian nationals on domestic air fares and on entry fees for national parks, wildlife sanctuaries, national monuments, historical sites and museums.
• Parity with NRIs on inter-country adoption of Indian children, on sitting the all India entrance tests for admission against an NRI or supernumerary seat (but not a seat reserved exclusively for citizens), on "purchase or sale of immovable properties other than agricultural land or farm house or plantation property", and on pursuing four professions, "as per the provisions contained in the applicable relevant statutes or Acts".
• In all other economic, financial and educational fields not specified, and in rights not covered by the Reserve Bank of India's (RBI) notifications under the Foreign Exchange Management Act, 1999 (FEMA), the "same rights and privileges as a foreigner".

The professions are doctors, dentists, nurses and pharmacists; advocates; architects; and chartered accountants.

Which four activities need permission?

The first right carries a proviso. For these activities the cardholder must obtain special permission or a special permit from the competent authority or the Foreigners Regional Registration Officer or the Indian Mission concerned:

1. research;
2. missionary, Tabligh, mountaineering or journalistic activities;
3. an internship in a foreign diplomatic mission or foreign government organisation in India, or employment in a foreign diplomatic mission in India; and
4. a visit to a place within a protected, restricted or prohibited area notified by the Central Government or the competent authority.

The notification does not list private employment or business among them. The MHA comparative chart of 22 July 2021 answers "What activities can be undertaken in India?" for a cardholder with "All activities except certain activities for which prior permission/special permit is required". The chart is an explanatory document of the Ministry; the rights are those in the gazetted notification.

What may an OCI cardholder do with property?

Rule 24 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (the NDI Rules) is the property rule. An NRI or an OCI may:

• acquire immovable property other than agricultural land, a farm house or plantation property, paying from funds received in India through banking channels as inward remittance or from a non-resident account, and not by traveller's cheque, foreign currency notes or any other mode;
• acquire such property by gift from a resident in India, an NRI or an OCI who is a relative within section 2(77) of the Companies Act, 2013;
• acquire any immovable property, agricultural land included, by inheritance from a person resident outside India who acquired it in accordance with the foreign exchange law then in force or the NDI Rules, or who acquired it from a person resident in India; and
• transfer immovable property to a person resident in India, or transfer property other than agricultural land, a farm house or plantation property to an NRI or an OCI.

The rule's definitions matter. The NDI Rules define an OCI as "an individual resident outside India who is registered as an Overseas Citizen of India Cardholder under section 7A". The RBI's Master Direction No. 12/2015-16 repeats the point at paragraph 2.2.

Sale proceeds of property other than agricultural land, a farm house or plantation property may leave through an authorised dealer bank under rule 29(2), for no more than two residential properties; the note on selling property in India and remitting abroad sets out the conditions.

When can the registration be cancelled?

Section 7D, as substituted by the Citizenship (Amendment) Act, 2015, allows the Central Government to cancel a registration under section 7A(1) by order if it is satisfied of any of these grounds:

• the registration was obtained by fraud, false representation or concealment of a material fact;
• the cardholder has shown disaffection towards the Constitution;
• during a war in which India is engaged, the cardholder unlawfully traded or communicated with an enemy, or was engaged in business that to the cardholder's knowledge assisted the enemy;
• within five years after registration, the cardholder was sentenced to imprisonment for a term of not less than two years;
• it is necessary in the interests of the sovereignty and integrity of India, the security of India, friendly relations with a foreign country or the general public; or
• for a spouse-category card, the marriage has been dissolved or the cardholder has married again while it subsisted.

Section 4 of the Citizenship (Amendment) Act, 2019 added clause (da): that the cardholder "has violated any of the provisions of this Act or provisions of any other law for time being in force as may be specified by the Central Government in the notification published in the Official Gazette". It also added a proviso that no order may be passed unless the cardholder "has been given a reasonable opportunity of being heard".

What does it look like for one cardholder?

An illustration. The person, the amounts and the dates below are hypothetical. A citizen of the United States of Indian origin holds an OCI card, lives in California and plans to move to Bengaluru.

Step                                   Rule applied                            Position on the text
Buys a flat for INR 1.5 crore          NDI Rules, rule 24(a)                   Allowed; pay by inward
while living in California                                                      remittance or a non-resident
                                                                                account
Takes a software job with an           S.O. 1050(E), item (1) and (2)          Not among the four permission
Indian company                                                                  items; tell the Foreigners
                                                                                Regional Registration Officer
                                                                                of the change of occupation
Plans research at a university         S.O. 1050(E), item (1)(i)               Special permission needed
Card registered 1 April 2026;          Section 7D(d)                           A ground if the sentence falls
sentenced to two years or more                                                         within five years of 1 April
                                                                                2026, to 31 March 2031

The job is where residence enters. The NDI Rules and the Master Direction define an OCI as a person resident outside India. Section 2(v) of FEMA makes a "person resident in India" a person residing in India for more than 182 days in the preceding financial year, but not a person who has come to or stays in India otherwise than for taking up employment or carrying on a business or vocation in India, or for another purpose, in circumstances indicating an intention to stay for an uncertain period. A cardholder who moves to Bengaluru to take up employment may therefore become a person resident in India and fall outside the NDI Rules' definition of an OCI.

What remains unsettled?

Whether a cardholder who becomes resident in India keeps the rule 24 rights. Rule 24 and the Master Direction speak of a person resident outside India, and the sources read contain no provision on a cardholder who later becomes resident. The answer depends on the residence test in section 2(v) of FEMA and on the RBI's directions, which this note does not cover.

Whether an OCI cardholder may enrol as an advocate turns on the Advocates Act, 1961 and the Bar Council's rules, which this note does not examine.

Which laws are "specified" under section 7D(da). On one reading, clause (da) needs a notification of the Central Government specifying the laws. On the other, "as may be specified" qualifies only "any other law", so a breach of the Citizenship Act itself may be a ground without one. The sources read include no such notification.

Section 7D is read here from the Citizenship (Amendment) Act, 2015, as amended by the Citizenship (Amendment) Act, 2019.