In this write up we endeavor to summarize the conditions for the purchase and sale of immovable property in India by a non resident Indians and overseas citizens of India. Ideally the NRI/OCIs are permitted to acquire the immovable property in India in the following manner:
1. Purchase;
2. Gift;
3. Inheritance;
TERMS USED:
1. Business Owner: means a person resident outside India who has established a branch office or project office or any other place of business in India accordance with FEMA provisions;
2. NRI: Indian citizen, resident outside India;
3. OCI: Overseas Citizen of India who is registered as an OCI Cardholder under the Citizenship Act, 1955;
4. Relative: Refers to the relative defined under section 2(77) of Companies Act, 2013;
5. Restricted Property: means the following immovable property (a) agricultural land or (b) plantation property or (c) farm house property;
6. Restricted Countries: Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong or Macau or Democratic People’s Republic of Korea (DPRK)
Acquisition of immovable property in India
| PARTICULARS | CONDITIONS APPLICABLE ON ACQUISITION | CONDITION APPLICABLE ON SALE OF PROPERTY |
|---|---|---|
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PURCHASE OF NON RESTRICTED IMMOVABLE PROPERTY |
Other than restricted property may be acquired by NRI/OCI by making payment of consideration from:
(i) funds received in India through banking channels by way of inward remittance from any place outside India or (ii) funds held in any non-resident account permitted under FEMA. *Please note that no payment can be made including the part payment or down payment by Pay pal, travelers cheque, foreign currency or any other mode
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Whom to sell? NRIs and OCIs are permitted to transfer: a) Restricted or Non Restricted Property (both): To a person resident in India; b) Non Restricted Property: to an NRI or OCI. Repatriation of sale proceeds? Following conditions are applicable on the repatriation of sale proceeds of immovable property other Restricted Property: a) the immovable property should have been acquired by the NRI/OCI as per the foreign exchange law in force at the time of his acquisition; b) the amount for acquisition of the immovable property should have been paid in foreign exchange received as per the applicable law; c) in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
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RECEIPT OF GIFT OF NON RESTRICTED PROPERTY |
Other than restricted property may be acquired by NRI/OCI as Gift from a Relative (defined above) who is:
a) a person resident in India; or b) NRI/OCI |
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INHERITANCE-RECEIPT OF BOTH RESTRICTED AND NON RESTRICTED PROPERTY |
NRI/OCI may acquire both restricted and non restricted immovable property from:
a) a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition; or b) from a person resident in India; |
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| JOINT ACQUISITION BY THE SPOUSE OF AN NRI OR AN OCI OF IMMOVABLE PROPERTY OTHER THAN RESTRICTED PROPERTY:-
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Joint acquisition can be made by purchase, subject to the following conditions:
a) Consideration: shall be paid from (i) funds received in India through banking channels; or (ii) funds held in any non-resident account maintained in accordance with the provisions of the Act; b) Marriage: the marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition of such property; c) Prohibition: The non-resident spouse is not otherwise prohibited from such acquisition. |
