Ac­quir­ing prop­erty abroad?

Any person re­sid­ing in In­dia can pur­chase im­move­able prop­erty abroad with gen­eral or spe­cial per­mis­sion from RBI

HT Estates - - HTESTATES - Su­nil Tyagi

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.

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