A non-resident Indian can
remit $1 mn from property sales
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The prices of ancestral properties left in India by emigrating non-resident
Indians (NRIs) have escalated beyond their belief. Little wonder they have
developed a new and intense interest in claiming their share, especially with
recession biting hard in the West. In the last few years, the ancestral homes in
India are valued in crores.
So these amounts become very attractive for NRIs to claim and remit. In the
recent past, the Reserve Bank of India (RBI) has revised the maximum amount that
can be sent abroad without special permissions. However, these properties should
not be agricultural land, a farm house or a plantation.
An NRI/PIO is allowed to send abroad up to $1 million from the sale of property
in any one financial year. This amount should be the sale proceeds of property
inherited by him out of rupee funds. This transfer is subject to production of
documentary evidence in support of acquisition, inheritance or legacy of assets
by the NRI, and a tax clearance or a no objection certificate from the Income
Tax Authority. The $1 million remittance can also be made from the balances held
in Non Resident Ordinary Rupee (NRO) Accounts.
After taking a dip following the financial crisis of 2008, property prices have
bounced back and how. Despite the high price rise, more and more NRIs are keen
to buy properties in India. Who can buy property in India? An NRI who is a
citizen of India but residing outside, or a Person of Indian Origin (PIO). A PIO
is defined as an individual (not a citizen of Pakistan, Bangladesh, Sri Lanka,
Afghanistan, China, Iran, Nepal or Bhutan) who has held an Indian passport at
any time or whose father or mother or grandfather or grandmother was a citizen
The laws related to immovable property in India are complex and are not uniform
from one state to another, said Rajan D. Gupta, a senior lawyer and a qualified
accountant with SRGR Law Offices.
"A major concern is to determine the clear and marketable title of the land
under question and to ensure that the land under question is free from any
encumbrances such as litigation, prior mortgages, any third party interest or
rights and any governmental actions such as compulsory acquisition proceedings,"
"Again, in case of properties, especially agricultural properties, which are
owned by farming families, there are a number of family law issues which again
are myriad as there are a number of religions in India and most of them have
their own characteristic legal frameworks."
Gupta said to ward off such issues and be almost certain about the legal status
of the property to be acquired, it is advisable that a competent legal
professional must be engaged to conduct a title check and due diligence of the
property to be acquired.
"It is also important to engage such a professional who practises within the
jurisdiction where the property is situated so that he/she is aware of the local
legal compliances and issues," he added.
NRIs face many legal tangles about their properties in India. These relate to
the purchase, transfer and ownership of property, power of attorney, management
and eviction of tenants, remittance of the sale proceeds, illegal grabbing of
their properties and other related issues.
Their legal cases have been pending in the courts for years, indeed decades. If
an NRI is fighting a case with a resident Indian, he is at a disadvantage
because the Indian is in no hurry while the NRI has limited time to attend to
his case during his visit to India or make special trips for court appearances.