Ownership of property by NRI
Tags: Nri Investment, Legal, Legalization, Legaltech

Inheritance matters are covered under the personal law that has been followed when the person passed away. This could be either the law of the land or the law of the religion. If a NRI (non-resident Indian) or person of Indian origin (PIOstands to inherit property from a deceased Indian, then the personal law of the deceased shall apply. A NRI (non-resident Indian) or person of Indian origin (PIO), can inherit any property in India, whether it is commercial or residential. They can even inherit agricultural land which they are not entitled to obtain by the way of purchase. An NRI can inherit the property from his family including his relatives. In subject to certain conditions a NRI or PIO can inherit property in India even from another NRI or PIO. The permission of RBI’s is compulsory, in case the inheritance comes in favour of a citizen of a foreign state, who is a resident outside India.The Indian law does not permitresident outside India to purchase any immovable property in India unless such property is obtained by way of inheritance from a person who was resident in India. However, the person can transfer or acquire immovable property in India on lease not exceeding five years.

An NRI or PIO who has purchased any commercial or residential property under general permission is not required to file any document with the RBI (Reserve Bank of India). The Reserve Bank of India (RBI) generally allows NRIs/PIOs who hold a valid Indian passport to buy commercial/residential properties in India. An NRI can buy any number of these types of properties as per income tax laws and RBI regulations. If an NRI wants to investin residential/commercial property in India. He hasno need to come to the country, the purchase can be done by giving a legally binding power of attorney for purchasing to another person.If a person owning a property in India becomes an NRI, then the person can continue holding the property. They can also let out their property. The tax should be paid as applicable in the country.As Estate Duty was ended long back, there is no tax implication at the time of inheritance. So, neither the inheritor northe representative of the deceasedhas to pay any tax at the occurrence of inheritance. In case the property is transferred by the person during his lifetime by way of a gift and the value of the property exceeds Rs 50,000, the receiver has to include the market value of the property received by the way of gift in his total income, unless he is among the specified relatives of the donor.The PIO orNRI can continue to maintain the ownership of the property, or can dispose it. Even if the NRI has decided to dispose of the property, there are certain tax implications for the period during which he retains the ownership of the property. As wealth tax has been finished in India, the NRI does not have any wealth tax implications, for being the owner of the property.An NRI can either gift away the inherited property or can sell the property and remit the money outside India. There are many restrictions on gifting of the property by an NRI. The NRI can gift the inherited property only to the person who is resident in India or an NRI.An NRI can repatriate the sale proceeds up to dollars every year without any approval from the Reserve Bank of India (RBI) provided that taxes in India must paid for the sale of such property.