Can one repatriate money back to US if in case he has not registered the property in his name?
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
http://www.atoneplace.com
http://www.atoneplace.tv
http://www.legalcorner.atoneplace.com
Popularity: 83% [?]
Tell A Friend