Acquisition/ Transfer of Immovable Property

Purchasing or inheriting a property in India is a nerve racking process. Considering the number of laws that have to be dealt with, this can be a time consuming and frustrating experience. Let us help you make the process a little more fluid and less nerve racking.

Acquisition and transfer of immovable property by Indian Residents outside India and NRIs in India is regulated by FEMA. FEMA empowers the RBI to frame regulations to prohibit, restrict, or regulate the acquisition and transfer of immovable property in India by person’s resident outside India.

A person resident outside India can hold, own, transfer or invest in any immovable property situated in India if such property was acquired, held or owned by him when he was resident in India or inherited from a person resident in India.

A. Acquisition of Immovable Property

 

Purchase of Immovable Property

Type of Property: Immovable property (other than agricultural land/ plantation property/ farm house)

  • NRIs and PIOs from Resident/ NRI.

  • Foreign Embassy/ Diplomat/ Consulate General subject to:

    • Clearance from GOI, Ministry of External Affairs

    • Consideration for acquisition is paid out of funds remitted from abroad through normal banking channels

  • Foreign Nationals of non-Indian origin resident in India (except 10 countries listed*)

  • Foreign Nationals of non-Indian origin resident outside India and of 10 countries listed* irrespective of their residential status subject to prior permission of the RBI.

 

Gift received

Type of Property: Immovable property (other than agricultural land/ plantation property/ farm house)

  • NRIs and PIOs from Resident/ NRI/ PIO

 

Inheritance

Type of Property: Any Immovable property

  • NRIs and PIOs from:

    • Any person who has acquired it under laws in force

    • Any person resident outside India, if such property was acquired, held or owned when he was resident in India.

  • Foreign Nationals of non-Indian origin resident outside India from a resident.

 

Lease

Type of Property: Any Immovable property

Citizens of 10 countries listed* irrespective of their residential status and Foreign Nationals of non-Indian origin resident outside India can acquire immovable property for:

  • Upto 5 years without prior permission of RBI

  • Exceeding 5 years with prior permission of RBI

 

*10 Listed Countries: Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong

B. Transfer of Immovable Property

 

Sale of Immovable Property

Type of Property: Any Immovable property (other than agricultural land/ plantation property/ farm house)

  • NRI can transfer to a Resident/ NRI/ PIO

  • PIO can transfer to a Resident

Type of Property: Agricultural Land

  • NRI can transfer to a Resident

  • PIO can transfer to a Resident who is a citizen of India

 

Gift

Type of Property: Any Immovable property (other than agricultural land)

  • NRI and PIO can gift to a Resident/ NRI/ PIO

Type of Property: Agricultural Land

  • NRI can transfer to a Resident

  • PIO can transfer to a Resident who is a citizen of India

Points to Remember:

  • Transactions involving acquisition of immovable property shall be subject to the applicable tax laws in India.

  • No payment of purchase price for acquisition of immovable property shall be made either by traveller’s cheque or by foreign currency notes or by other mode other than those specifically permitted.

  • A foreign company which has established a Branch office or Project office in India if acquires any immovable property in India, then such it is required to file with RBI a declaration in the Form IPI within 90 days from the date of such acquisition.