Non Resident Indian (NRI) is a citizen of India, who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Non-resident foreign citizens of Indian Origin are treated at par with Non Resident Indian (NRIs).

Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who
(a) At any time, held Indian passport, or
(b) Who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)

Overseas citizen of India(OIC).
(a) Any person of full age and capacity:
(i) Who is a citizen of another country, but was a citizen of India at the time of, or at any time after, the commencement of the constitution, or
(ii) Who is a citizen of another country, but was eligible to become a citizen of India at the time of the commencement of the constitution, or
(iii) Who is a citizen of another country, but belongs to a territory that became part of India after the 15th Day of August, 1947.
(iv) Who is a child of such a citizen, or

(b) A person, who is minor child of a person mentioned in
Clause (a)
Provided that no person, who is or had been a citizen of Pakistan, Bangladesh shall be eligible for registration as an Overseas Citizen of India.

No permission is required if an NRI wants to acquire any immovable property in India, except if it is agricultural / plantation property or a farmhouse.

People of Indian origin residing outside India can acquire properties apart from agricultural land. However, the payment must be made out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers NRE / FCNR accounts maintained with a bank in India. A declaration also has to be submitted to the Central Office of the RBI (form IPI 7) within 90 days from the date of purchase or of final payment.

No permission is required to purchase residential property, unless it is agricultural / plantation land or a farmhouse. However, the payment must be made out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers non-resident accounts maintained with a bank in India.

This is allowed if the property has been purchased on or before 26th May, 1993. But the property must be sold at least three years after the date of the final purchase deed or the date of payment of the final payment installment, whichever is later. An application (form IPI8) also has to be made to the Central Office of Reserve Bank within 90 days of the sale of the property.

Payment can be made by NRI / PIO out of:
funds remitted to India through normal banking channels or
funds held in NRE / FCNR (B) / NRO account maintained in India
No payment can be made either by traveler’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.

Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.

India has DTAAs with several countries which give a favorable tax treatment in respect of certain heads of income. However, in case of sale of immovable property, the DTAA with most countries provide that the capital gains will be taxed in the country where the immovable property is situated. Hence, the non-resident will be subject to tax in India on the capital gains which arise on the sale of immovable property in India. Letting of immovable property in India would be taxed in India under most tax treaties in view of the fact that the property is situated in India.

NRI / PIO can mortgage a residential / commercial property to:
a) An Authorized Dealer / the housing finance institution in India without the approval of Reserve Bank.
b) Bank abroad, with the prior approval of the Reserve Bank.
A foreign national of non-Indian origin can mortgage a residential / commercial property only with prior approval of the Reserve Bank.

No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank
Please refer to the link below for detailed information,
http://www.rbi.org.in/scripts/faqview.aspx?id=52