Acquiring and Transfer of Immoveable Property in India

 

You are a Non Resident and want to buy or sell an immoveable property in India? Then you should know these fundas! 

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• You need to be an Indian Citizen or atleast an Overseas Citizen of India (OCI)  to buy immoveable property in India.  An OCI is one who is registered as an Overseas Citizen of India Cardholder. 

 

• So, if you are a foreign citizen and not an OCI, you cannot buy immoveable property in India.  The only exception is when you make a joint acquisition of the property along with your spouse who is an NRI or OCI and the marriage with the spouse has subsisted for atleast 2 years prior to the acquisition.

 

• So, what if you are an Indian Citizen or OCI.  Know these facts: 

 

• You can buy immoveable property, but not Agricultural Land, Plantation land and Farm Houses.  These are reserved for Resident Citizens!

 

• You can buy only through money brought into India by banking channels, or by debit to your Non-resident accounts maintained in India.  You cannot use local money. 

 

• You can also receive by way of gift, an immoveable property other than agricultural land, plantations and farm houses from a Resident or Non Resident Indian Citizen or OCI.    

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• You can inherit an immoveable property from a Non Resident (and, of course a Resident) who had acquired the property in accordance the FEMA regulations.  Being an inheritance, this can also include the 3 specified items, Agricultural land, Plantations and Farm House.  But when you want to gift these 3 specified items, you may do so only in favour of a resident of India who is an Indian Citizen.

 

• You can continue to hold an immoveable property acquired when you were a resident of India. However when you or your successor want to sell, repatriation from India requires specific approval of the RBI.  This is so even if you had acquired the property by inheritance from a person in India.  Even here an approval may not be required up to US$ 1Mn as it is specifically provided in regulations governing remittance of assets that repatriation of sale proceeds of assets/assets acquired by way of inheritance by NRO/PoI is permitted up to US$ 1 Mn.  Best way to steer clear of any controversy is to make a full disclosure to your Authorised Dealer when repatriating.    

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• Should you want to sell an immoveable property, you can sell to a Resident or a Non-Resident Indian Citizen or an OCI.  Repatriation is not permitted beyond 2 residential properties.  If you want to gift to an NRI or OCI, the donee should be a relative as defined in Sec 2(77) of the companies Act.

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[Source: Foreign Exchange Management ( Non-debt Instrument) Rules, 2019 as amended (which supersedes Notification No. FEMA 21(R)/2018-RB/Foreign Exchange Management (Acquisition and Transfer of Immoveable Property in India) Regulations, 2018) and Foreign Exchange Management ( Remittance of Assets) Regulations, 2016 – Contents updated till 7 Nov 2022]

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