RBI regulations on sale of immovable properties by Non Residents
FEMA, 1999 and FEM (Non-Debt Instrument), 2019 lay down the procedure and guidelines for transfer of commercial or residential property in India by NRIs/OCIs.
1.Transferor who can sell an immovable property:
A person resident outside India can transfer any immoveable property acquired or owned him when he was resident in India or inherited from a person resident in India.
2.Transferee who can buy an immovable property:
A person resident in India or another NRI or OCI can be a transferee. A non-resident can sell agricultural land/plantation property/farm house only to resident citizen of India.
3.Repatriation of sales proceeds:
Conditions for repatriation are as follows:
The property must have been acquired as per foreign exchange law in India.
Amount to be repatriated does not exceed the foreign exchange paid for acquisition or amount paid out of FCNR Account or out of NRE Account for acquisition of the property.
Sale proceeds of not more than 2 residential properties.
There is general permission for repatriation of sale proceeds of inherited immovable property. However, the following conditions are need to be complied: a) Upper limit of repatriation amount is USD 1 million per year b) Documentary evidence of inheritance along with a CA certificate c) Deed of settlement along with NOC from Income Tax Department d) Part remittances upto the upper limit to be processed through same bank. e) Foreign national needs prior approval of RBI along with CA Certificate and inheritance documents.
4.Transfer by Gift:
An NRI/PIO may gift residential/commercial property to Person resident in India or An NRI or a PIO
There is general prohibition of transfer of immovable property in India by citizens of neighbouring countries, without prior approval of RBI.