Daily Email Newsletter (Sign-up Free)

FAQs on Purchase of Immovable Property outside India by Resident Individuals

These FAQs attempt to put in place the common queries that users have on the subject in easy to understand language. However, for conducting a transaction, the Foreign Exchange Management Act, 1999 (FEMA) and the regulations made or directions issued thereunder may be referred to.

The relevant principal regulations are the Foreign Exchange Management (Acquisition and transfer of immovable property outside India) Regulations, 2015 issued vide Notification No. FEMA 7(R)/2015-RB dated January 21, 2016. The directions issued are consolidated in Part I of the Master Direction No 12 on Acquisition and Transfer of Immovable Property under Foreign Exchange Management Act, 1999.

Ques. #1: Can a resident continue to hold immovable property outside India which was acquired by him when he was a non-resident?
Ans.: According to section 6(4) of the FEMA, a person resident in India can hold, own, transfer or invest in any immovable property situated outside India if such property was acquired, held or owned by him/ her when he/ she was resident outside India or inherited from a person resident outside India.

Ques. #2: Can a resident individual send remittances and purchase property outside India?

Ans.: A resident individual can send remittances under the Liberalised Remittance Scheme (LRS) for purchasing immovable property outside India. In case members of a family pool their remittances to purchase a property, then the said property should be in the name of all the members who make the remittances.

Ques. #3: To whom do the restrictions of transferring property outside India not apply?

Ans.: The prohibition of a resident acquiring property outside India is not applicable if:

a. The resident is a foreign national; or

b. The property was acquired before July 8, 1947 and continued to be held after obtaining permission; or

c. If it is acquired on a lease not exceeding five years.

Ques. #4: How can immovable property be acquired outside India by a resident?

Ans.: Immovable property can be acquired outside India:

a. Under section 6(4) of FEMA;

b. As an inheritance/ gift from a person (i) referred to in sec 6(4) of FEMA; or (ii) who has acquired it prior to July 8, 1947 (iii) who has acquired such property in accordance with the foreign exchange provisions in force at the time of such acquisition;

c. Purchased with balances in the Resident Foreign Currency (RFC) account of the resident;

d. As a gift from persons at (b) & (c) above, provided he is a relative of such persons;

e. Purchased with remittances made under the Liberalised Remittance Scheme (LRS);

f. Jointly with a relative provided there are no outflow of funds from India;

g. By an Indian company having overseas offices, for housing its business or for residence of staff.

Ref: The above information is taken from RBI site, contents of which, are as updated as on May 07, 2018.

Disclaimer: In case of any inconsistency(ies) between FAQ and FEMA notification(s)/Master Directions(s)/AP DIR Circular(s) latter shall prevail.

No comments:

Post a Comment

In comment with "Name/Url" option, only Name is mandatory to be filled.


More Info