Legal Corner » NRI Related

How soon can one repatriate the dollar amount put in to buying a flat?

atoneplace — Mon, 03 Oct 2011 10:57:05 +0000

Question asked by Mathi Jay from Chennai, India:
I have procured a flat in Chennai, India. Paid 70% thru foreign remittance (for which have proof). Planning to sell the same, how soon can I repatriate the dollar amount I put in? If I submit the proof of the wire transfers, can I get them repatriated as soon as I sell? Also note my first dollar payment was in Jan 2007 and the last dollar payment in Sep 2008. If the sale proceeds were to be in Indian Rupees, what type of account should I put in to have it repatriated at the earliest? If I put it in a NRO in a foreign bank (e.g. citi), can I get them repatriated immediately if I produce certificates of foreign wire transfer?
Thanks
Mathi Jay
Veena Answers:
We are of the view that the money received from sales proceeds allowed for repatriation to any country subject to USD 1 million in a year. Proceeds exceeding 1 million can be repatriated in the subsequent years. The sales proceeds have to be deposited in NRO (rupee account). Further, the source of funding needs to be certified by a Chartered Accountant and copies of inflow to be provided for review of the chartered accountant. Any NRO account can be opened in any bank. However, if there is any tax liability on the sale proceeds, the same needs to be cleared or undertaking needs to be procured that such liability shall be cleared.
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Is it legally possible for a NRI to sign the transfer form or power of attorney with the copy of the house document at the Indian Embassy?

atoneplace — Sat, 01 Oct 2011 06:24:10 +0000

Question asked by Ms. Jini William from Melbourne, Australia:
Hi, good day. I and my husband have resolved our Indian property disputes in court in Melbourne. My husband is going to sell one land in India and send me my share through bank. Our joint property of two bed apartment will have to be transfer on my husband’s name. Without both of us going to India, can we go to Indian Embassy in Melbourne and sign the transfer form or power of attorney with the copy of the house document? Is this is possible?
Thanks
Jini William

Veena Answers:
We are of the view that this is not possible and the parties have to come to India to execute the necessary release deed and register the same before the jurisdictional sub registrar in India.
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What would be the procedure to get a gifted property transferred in names of NRIs?

atoneplace — Tue, 03 May 2011 07:18:48 +0000

Question asked by Mr. Ahmed Pasha from USA:
My mother has gifted her apartment to 3 out of 4 siblings in her hand written WILL. All three of us reside abroad. She passed away last year. What would be the procedure to get this property transferred in our names? Is our presence required in India to do this transaction?
Thanks
Ahmed Pasha
Vatsala Answers:
No your presence is not required and you can entrust the job to someone else. You may be required to sign and execute notarized affidavits and fill up the application form, all of which can be done through power of attorney or signed and sent back by courier.
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Can a NRI inherit agricultural property in India?

atoneplace — Tue, 03 May 2011 06:51:20 +0000

Question asked by Ms. Lakshmi from USA:
My name is Lakshmi and I am a permanent resident of the US. My father has a small agricultural plot outside Bangalore near Magadi and I am unclear as to what the process is in inheriting such property. I read the RBI rules which state that NRI’s can’t inherit such property, is this true? I am looking to apply for US citizenship; will this further affect my status to inherit agricultural property in India?
Thanks
Lakshmi
Vatsala Answers:
Inheritance is not covered by the ban on NRI’s. It is an exception to the rule.
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Can one repatriate money back to US if in case he has not registered the property in his name?

atoneplace — Tue, 27 Oct 2009 07:18:18 +0000

Question asked by Karan Chandran from USA:
Hello, I am an NRI(Indian Citizen – US Green Card Holder) living in the United States. I am in the process of buying a flat with a builder in Bangalore. I have paid about 80% of the flat’s price so far. The price of the flat is around 58 Lakhs + Registration (around 5 lakhs) + Car Park + misc. The Builder has not registered the flat in my name yet, so I have not paid the registration fees yet. I have sent all the money for the purchase from United States through a Citibank NRE account. Here are my 3 questions:
1. Can I sell the flat to someone now without registering it? My plan is to register it in their name directly. This way I will avoid the Registration fees and can sell it for a lower price thereby both the buyer and myself will gain.
2. If I can sell it, what taxes will I have to pay to the Indian Government? Will it be a percentage of the capital gains (the difference between the sales price and the price I purchased it at)?
3. Will I be able to repatriate the money back to US in this case since I have not registered the property in my name? If so, how long can I keep the money in rupees in an account before I repatriate it? (The dollar value is pretty high now and I would like to repatriate it when it is a little lower)
I greatly appreciate any insight you can provide to my questions. Also, please let me know if there is a way for me to consult with you via phone for about 1/2 hour regarding this and what your charges would be.
Thank you
Karan
Vatsala Answers:
1.Yes, you can assign your rights in the agreement to a third party thereby avoiding registration fees.
2.The capital gains tax will have to be paid on the profit you make. There are routine ways whereby it is possible to avoid this, but they are outside the purview of this column.
3. NRI / PIO may repatriate the sale proceeds of immovable property in India
(a) If the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account
The amount to be repatriated should not exceed the amount paid for the property:
1. in foreign exchange received through normal banking channel or
2. by debit to NRE account(foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.
Repatriation of sale proceeds of residential property purchased by NRI / PIO out of foreign exchange is restricted to not more than two such properties.
Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to USD one million, per financial year, as discussed below.
(b) If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bona fide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
4.All questions on charges are to be directed to the web master of atoneplace.com
Vatsala
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What are the latest Indian rules for repatriation and what is the procedure to follow?

atoneplace — Sat, 24 Oct 2009 08:40:26 +0000

Question asked by Shiva Badruswamy from New York, USA :
Hello there:
Thank you for being very informative about real estate Indian laws. I am about to inherit a property in India worth roughly $1 million. I am a US Citizen of Indian Origin. I want to sell the property and bring the cash over to the US or buy another property in another country or invest in any security. What are the latest rules and what is the procedure to follow?
Best wishes,
Shiva Badruswamy
New York, NY, USA
Vatsala Answers:
You can sell the property and repatriate the funds. NRI / PIO may repatriate the sale proceeds of immovable property in India. The following are the latest rules:
(a) If the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account. The amount to be repatriated should not exceed the amount paid for the property:
1. in foreign exchange received through normal banking channel or
2. by debit to NRE account(foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.
Repatriation of sale proceeds of residential property purchased by NRI / PIO out of foreign exchange is restricted to not more than two such properties.
Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to USD one million, per financial year, as discussed below.
(b) If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bona fide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
If you invest in another country where the double taxation avoidance treaty has been signed, you have to pay only the difference in the taxation amount.
Vatsala
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What is the best method of transaction so that a NRI can pay the minimum capital gains tax, registration tax and is able to repatriate the sale proceeds of a house?

atoneplace — Tue, 30 Jun 2009 10:18:57 +0000

Question asked by Mr. Vishal Sinha from USA :

Dear Sir, I am an Australian citizen and currently on work visa in USA for the past 2 years. I was born in India and my parents/brothers are settled there and hence I have a PIO (Person of Indian Origin) card. I need to assist my brother with 13 Lakhs INR rupees that I will send from USA. In Lieu of this my mom would like to give a house that is in her name to me. The house is worth 40 lakhs INR that she has built 15 years ago. My question is what is the best method of transaction so I pay the minimum capital gains tax, registration tax and am able to repatriate the sale proceeds of the house when I sale it later while claim the 13 lakhs that I am going to send now. What happens if my mom sells the house herself in 40 lakhs INR and then gifts the cash to me? Do I need to pay any tax on this cash? Can I repatriate this cash to USA/AUSTRALIA?
In place if she gifts the house to me, When I sell the house, do I have to pay capital gains on whole of 40 Lakhs INR or just the (sale price – cost of building the house that my mom spent)?
Third option would be that mom could sell part of the house to me and part of the house gives me as gift to counter the 13 lakhs INR that I am paying her. She will then give 13 lakhs INR to my brother who has already a loss of 13 lakhs in his business.
I need to know what is the best option where for getting the control of the house and immediately and have to pay less taxes.
Thank you for your help!
Vishal Sinha
USA

Vatsala Answers:

1) Your mother can sell you the property for Rs. 13 lakhs. After the sale, it will be taxed in the hands of your mother for a notional value which will be the guideline value. i.e., you motherâ€™s capital gains will be taxed using the notional value as her deemed cost of sale. When you sell the property, the amount you have invested to purchase it can be repatriated, subject to compliance with tax laws and a ceiling of 1 million U.S. dollars per financial year. But if you show low cost of acquiring the asset in the sale deed, the capital gains will be more at the time of sale in your hands. There will be no notional cost of acquisition. But in India you can get around this by showing a lesser value in the sale deed when you sell the asset. This way your capital gains can be reduced.
2) There is no tax on cash gifts from mother to son.
3) If the house is gifted to you, the guideline value will be taken as the notional value, which is used to compute the cost of acquisition in your hands.
4) You cannot partly gift and partly sell the same property.
Vatsala

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Is it mandatory to go have Katha certificate issued by BMP / BBMP for buying a property in Bangalore?

atoneplace — Sat, 27 Jun 2009 10:12:21 +0000

Question asked by Kiran from Florida, USA:
Sir/Madam,
I was going through some of the posts at your website.
I have an issue and require your assistance.
I am Kiran living in Florida, USA.
I wanted to buy a 3-Bed Rood apartment in Bangalore.
We checked the documents provided by the builder with a lawyer and as we got a satisfactory feedback we entered into sale agreement to buy the flat.
We paid around 6 lakhs during that process and also started the home loan process.
The bank says that they need the Khata certificate from the Builder issued by BMP. The builder says that he has the Khata certificate issued by CMC. Also, the bank asks for tax paid receipts for the current year, which the builder provided a copy. The bank people say that the tax paid receipt is invalid and the dates and years are messed up with a whitener.
Now, is it mandatory to go have
1. Katha certificate issued by BMP / BBMP.
2. Tax paid receipt for the latest year.
3. If I want to cancel the sale deed and get back the money is it possible? What are the formalities?
Please let advice us.
Kiran
Florida
Vatsala Answers:
The CMC areas have merged with the BBMP area. For registration purpose, the sub registrar is insisting on Khata from BBMP and up to date tax paid receipt. However the BBMP is delaying the issue of Khata for administrative reasons. This is a temporary situation. You can give a bond to the bank stating that as and when these documents become available, you will furnish the same to them. If you want to get out of the deal, you can try sending a legal notice to the builder asking for the BBMP Khata and tax receipt, failing which you cannot complete the transaction and will therefore rescind the contract. Vatsala
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Do An OCI Need To Be Present In Person To Make A Sale Of Her Property?

atoneplace — Wed, 04 Mar 2009 05:37:28 +0000

Question asked by Ms. Kiran Tailor from UK:

Dear Vatsala,
I have an OCI status and presently living in UK. My query is that I have some land and plats in India and if I consider selling them, what is the process and do i need to be present in India during this time. Could you please advise me.
Thank you.
Kiran Tailor

Vatsala Answers:

You need not be present in person. However you are required to execute a power of attorney appointing someone in India who can be your agent and represent you at the sub registrarâ€™s office. Vatsala

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Can An NRI Buy An Agricultural Land?

atoneplace — Wed, 04 Mar 2009 04:08:35 +0000

Question asked by Mr SK :

Hi, I am NRI holding Indian passport, last 10 years (from 98â€™march) I worked and working in different countries. During this period I purchased 15 acres of Agricultural land in my village in India where I want to go back and settle down.
Now I just came to know from RBI web site NRIâ€™s canâ€™t buy the Agricultural land in India So what should I do. Please advice.
Many thanks
SK.

Vatsala Answers:

Since you have already purchased it, you should quietly own it without making any noise about it. This is my best advice to you as right now your ownership is not being challenged.Vatsala

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