Acquiring property abroad?
Any person residing in India can purchase immoveable property abroad with general or special permission from RBI
Investment in real estate abroad can offer profitable prospects for a person. In India, all transactions that involve foreign exchange are regulated by Foreign Exchange Management Act, 1999 (FEMA) and regulations made thereunder. Before making any investment decision in real estate overseas, one must understand the legalities involved.
Any person resident in India can purchase i mmoveable property abroad with general or special permission of RBI. Such purchase is required to be made out of foreign exchange held i n Resident Foreign Currency Account (RFC) maintained with an authorised bank, which was received as pension or any other superannuation or other monetary benefits from an employer outside India; realised on conversion of foreign currency, foreign security or any immoveable property situated outside India and repatriated to India; received or acquired as gift or inheritance from a person referred to in Section 6(4) of FEMA; acquired or received before July 8, 1947 or any income arising or accruing thereon held outside India in pursuance of general or special permission granted by RBI; or received as proceeds of life insurance policy claims, maturity or surrender values settled in foreign currency from an insurance company in India permitted to undertake life insurance business by the I nsurance Re gulatory and Development Authority
A person resident in India may also acquire immoveable property abroad by way of gift or inheritance from a person resident in India who had: acquired, held or owned such property when he/she was resident outside India; inherited property from a person resident outside India; or acquired such property on or before July 8, 1947 and continued to be held by him with the permission of Reserve Bank of India (RBI) Additionally, such a person can inherit immoveable property outside India from a person resident outside India.
A person resident in India can also acquire immoveable property abroad under the Liberalised Immoveable property abroad can be acquired by person resident in India by way of purchase, gift or inheritance Person resident in India permitted to remit upto US$ 125,000 per year under the Liberalised Remittance Scheme for purchasing immoveable property abroad Alternatively, person resident in India may purchase immoveable property abroad out of foreign exchange held in a resident foreign currency account Remittance Scheme (LRS) wherein RBI has permitted resident individuals to make remittances abroad, within a specified threshold, for acquiring immoveable property abroad without obtaining prior approval of RBI.
At present, there are no restrictions on the frequency of remittances under LRS in a given financial year. However, the total amount remitted during the financial year should not exceed the cumulative limit of US$125,000 per person. When making remittances under LRS, one should also bear in mind the list of countries specifically prohibited by RBI for the said purposes.
Individuals seeking to avail LRS are required to furnish an application cum declaration to RBI declaring that the funds belong to them and will not be used for unspecified purposes. They are mandatorily required to have a PAN number and are also required to maintain a bank account for a minimum period of one year prior to the remittance.