NRIs - Acquisition/Transfer of Immovable property - Payment of Taxes - RBI clarifies
RBI observes that doubts persist in the members of public regarding requirement of payment of taxes while undertaking property transactions.
RBI clarifies that as per the Foreign Exchange Management (Acquisition and Transfer of immovable property in India) Regulations, 2000, transactions involving acquisition of immovable property under these regulations shall be subject to the applicable tax laws in India.
As per the Regulations:
A person resident outside India who is a citizen of India may -
a) acquire any immovable property in India other than agricultural/plantation/farm house, and
b) transfer any immovable property in India to a person resident in India.
c) transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.
A person of Indian origin resident outside India may -
(a) acquire any immovable property other than agricultural land/farm house/ plantation property in India by purchase, from out of (i) funds received in India by way of inward remittance from any place outside India or (ii) funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act;
(b) acquire any immovable property in India other than agricultural land / farm house / plantation property by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India;
(c) acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India;
(d) transfer any immovable property in India other than agricultural land/farm house/plantation property, by way of sale to a person resident in India;
(e) transfer agricultural land/farm house/ plantation property in India, by way of gift or sale to a person resident in India who is a citizen of India;
(f) transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian Origin resident outside India.
RBI AP (DIR Series) Circular No. 38., Dated: November 20, 2014