As per section 6(3)
and 47(2), the FEMA has made the Foreign Exchange Management
(Acquisition and transfer of immovable property in India) Regulations,
2000 vide notification no. FEMA 21/2000-RB dated May 3, 2000.
The regulations have come into force on June 1, 2000. Under
regulation 3, any NRI who is a citizen of India is allowed to
acquire any immovable ] property in India other than agricultural/plantation/farm
house. Likewise, he is allowed to transfer any immovable property
in India to a person resident in India. Thus, an NRI can transfer
any immovable property other than agricultural or plantation
property or farm house to a person resident outside India who
is a citizen of India or to a person of Indian origin resident
outside India. Acquisition and Transfer of property in India
Acquisition and Transfer of Property in India: As per regulation
4, a person of Indian origin resident outside India i.e. an
NRI may :-
(a) Acquire any immovable property other than agricultural land/farm
house/ plantation property in India by purchase, from out of
(i) funds received in India by way of inward remittance from
Any place outside India or (ii) funds held in any non-resident
account maintained in accordance With the provisions of the
FEMA and the regulations made by the Reserve Bank under the
FEMA.
(b) Acquire any immovable property in India other than agricultural
land / farm house / plantation property by way of gift from
a person resident in India or from a person resident outside
India who is a citizen of India or from a person of Indian origin
resident outside India.
(c) Acquire any immovable property in India by way of inheritance
from 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 by him or the provisions
of these Regulations or from a person resident in India.
(d) Transfer any immovable property in India other than agricultural
land/farm house/plantation property, by way of sale to a person
resident in India.
(e) Transfer agricultural land/farm house/ plantation property
in India, by way of gift or sale to a person resident in India
who is a citizen of India.
(f) Transfer residential or commercial property in India by
way of gift to a person resident in India or to a person resident
outside India who is a citizen of India or to a person of Indian
Origin resident outside India.
Thus, we have seen that there is a difference between regulations
concerning NRI's who are Indian citizens and other NRI's who
are not Indian citizens. In the case of the latter, there are
requirements for obtaining permission from the Reserve Bank
and the conditions in there case are stringent while in the
case of an NRI who is an Indian citizen, he can acquire and
transfer any immovable property in India other than agricultural
land, Plantation or farmhouse to any Indian resident without
complying with the formalities of obtaining the RBI permission.
Repatriation by the NRI
In the event of general sale of immovable property other than
agricultural land/farm house/ plantation property in India by
an NRI, the authorised dealer may allow repatriation of the
sale proceeds outside India on the fulfillment of certain conditions.
One of the important conditions as per regulations 6 is that
the immovable property was acquired by the seller in accordance
with the provisions of foreign exchange law in force at the
time of acquisition by him or the provisions of these regulations.
Where the sale takes place after three years from the date acquisition
of such immovable Property or from the date payment of final
installment of consideration for its acquisition, whichever
is later, the repatriation of the sale proceeds outside India
would be allowed by the authorised dealer.
In case of residential property, the repatriation of sale proceeds
is restricted to not more that two such properties as laid down
in regulation 6(b). Another important regulation to be remembered
in this connection is that the amount to be repatriated should
not exceed:-
(a) The amount paid for accusation of the immovable property
in foreign exchange received through normal banking channels
or out of funds held in Foreign Currency Non-Resident Account
or
(b) The foreign currency equivalent, as on the date of payment,
of the amount paid where such payment was made from the funds
held in Non-Resident External account for acquisition of property.
Another very important regulation is no.7 which provides that
no person being a citizen of Pakistan, Bangladesh, Sri Lanka,
Afghanistan, China, Iran, Nepal or Bhutan is permitted to acquire
or transfer immovable property in India, other than lease, not
exceeding five years, without prior permission of the Reserve
Bank. |
