Selling an inherited property could appear to be quite a challenging and troublesome job in India, especially when one is not aware of the procedures. For people staying abroad for a long time can find this process even more horrifying.
Although NRIs have been quite open to investing in Indian properties, selling the inherited ones could confuse them at times, specifically without proper and detailed guidelines. By following the given steps, the tough job can also be made easy and smooth.
Transferring property title to your name:
Transfer of property title to your name is the foremost thing one must do, if he has decided to sell the inherited property in India. The transfer process takes place through a process known as ‘Mutation of revenue records’. In this process, one requires a copy of the property’s Will. In the absence of the Will, one can seek for a succession certificate from the local court.
Arranging all the documents required:
Once the property title is transferred, one should arrange all the papers or documents required for its selling. These include the original agreement of purchase, original share certificate (required only if the property is in a co-operative society), NOC (no-objection certificate) from the society, a Lawyer’s certificate, and PAN Card.
Identifying the most preferred method of sales for you:
Once ready with all the required documents, the next step that follows is deciding upon the method for sale.
This can be done either all by yourself or with an expert’s help. For performing the task on your own, you need to have a good knowledge of the whole procedure, or else one can always seek for an expert’s help.
These professional consultants help you to decide on whether to sell the property or rent it. Certain firms also have lawyers and consultants to help you with the issues like duplication of certificates, getting your PAN, etc. These firms are known to provide end-to-end solutions along with maintaining the seller’s confidentiality.
Such firms charge a percent of sales consideration as their fees, and handle several issues like identifying the right buyers, handling legal tax issues, etc. along with keeping the seller’s information private.
Transparency is another big challenge when it comes to this procedure of sales. Therefore, the NRI sellers should not get carried away with prices quoted by brokers, and rather confirm everything upfront.
Completing the Sales Procedure:
For the successful completion of a sales procedure, first one should understand certain things like the structure and the overall value of the property. Secondly, one has to also deal with matters relating to the Power of Attorney. PoA shouldn’t be given to anyone, just like that. Since, it is also not possible for the property holder to travel again and again for registration issues, therefore, the PoA can be made in favor of someone trustworthy (like a relative or a friend). The POA holder can then represent the NRI for any further process of registration.
A Power of Attorney that has been drafted in India should be signed by the NRI in person and in front of the Indian government official. Only then, it becomes acceptable by the registrar for completion of the registration process.
Handling tax issues:
For selling property in India, the seller, need not bother about the issues of taxation. You can file the income tax returns to seek a refund of the excess tax amount deducted by the buyer, after considering the indexation benefit provided to the seller (that is you).
Therefore, the overall process above stated, which has been divided into several smaller steps, eases out the entire sale process and the related transactions, making it much more feasible.
The author is Ramalingam.K an MBA (Finance) and certified financial planner. He is the Director & Chief Financial Planner of holistic investment planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He Can be reached at email@example.com
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018