Things That Nris Must Know About The Ownership Of Property In India

For NRIs and OCIs, the acquisition or purchase of a farmhouse, plantation property, or agricultural land by gifts is not allowed.

Legal Framework for NRIs and OCIs Buying Property in India

Non-resident Indians (NRIs) and Indian citizens outside India have to follow many different rules and laws when buying and selling property (OCI).

People who live outside of India, like NRIs and OCIs, can buy and sell real estate in India. Still, they have to follow the Foreign Exchange Management Act, 1999 (FEMA) and the Reserve Bank of India (RBI) rules. FEMA says that an NRI is a person who lives outside of India and is a citizen of India. An OCI is a person who lives outside of India and is registered as an overseas citizen of India Cardholder under Section 7(A) of the Citizenship Act, 1955.

Types of Properties NRIs and OCIs Can Buy

As long as you are an NRI or an OCI, you can buy any number of residential or commercial properties in India under the rules set by the RBI. Besides buying a home or business, an NRI or OCI can also get a gift from any of his NRI, OCI, or resident relatives.

Restrictions on Property Acquisition Through Gifts

NRIs and OCIs can’t buy or get agricultural land, a farmhouse, or plantation property through gifts. However, an NRI or OCI can inherit any real estate in India from someone who lives there.

Inheritance of Property in India

As long as the property was bought following the law when it was purchased, an NRI or OCI can inherit it from someone living outside of India.

Modes of Payment for Property Purchase

NRIs and OCIs who want to buy real estate in India can pay for it with money that came into India through normal banking channels from a place outside India or that is in an NRE, NRO, or FCNR account. If you want to pay, you can’t do it with a traveler’s check or money from another country.

Joint Ownership with a Non-Resident Spouse

In addition, a non-resident spouse of an NRI or an OCI can also buy real estate in India with their NRI or OCI spouse if their marriage is registered and has been going on for at least two years. The non-resident spouse should not be barred from buying real estate with their NRI or OCI spouse.

Tax Implications on Sale of Property

Neither NRIs nor OCIs have to pay any taxes on the sale of their real estate. However, there are some rules about how the money from the sale can be sent back to the United States.

Repatriation of Sale Proceeds

People who are NRIs or OCIs can sell property that they bought while living in India or that they inherited. They can bring back up to $1 million per year, subject to paying taxes and meeting the requirements of an authorized dealer bank.

Suppose the NRI or OCI bought the properties through inward remittances or funds held in an FCNR(B) or NRE account. In that case, they can repatriate the money from the sale, but only up to two residential properties.

Legal Validity of Gift Deeds and Wills

When an NRI or OCI gets a piece of property as a gift, the gift deed is legally valid. It can be used to change the title in revenue records, which means that the property’s name can be changed. Property bought through a will may need to be probated in the state where the property is to get a good title. The Will, or if probate is required, the Will that has been proven can be used for mutation and other things.

Power of Attorney for Managing Property

It can be challenging for NRIs or OCIs to keep track of their own and own in India. They can give someone in India the power to act on their behalf through a special power of attorney (POA). If you need to sign sale documents or do other things that need to be done, a special POA is usually made for that purpose. It can be revoked at any time.