Legal Corner » Investment

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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How Can One Get Back His Booking Amount If The Developer Is Not Meeting His Agreed Terms & Conditions?

atoneplace — Thu, 05 Mar 2009 01:06:24 +0000

Question asked by Mr. Amardeep from Delhi:
Hi, I am Amardeep .I am writing to you in great faith. I have the following query.
In the year Nov, 2006 I invested for a flat in a pre launch project in Faridabad in Delhi-NCR. In Nov.2006 I paid 2.55lacs as first Installment. In Jan 2007, I paid another 2.08lacs as demanded by the builder. Till date I have paid total of 4.65lacs approx. which is around 30% of the total base price of the flat.
This builder didn’t start the work as per the schedule. He started allotments in March 2008.Till that time there was no progress. In between I enquired and found that he made refunds also to many people who were influential. I also approached for the refund. He asked me to do some formalities like signature proof by bank, original receipts of payments made etc. I completed all the formalities and reached his office. Initially the person in charge for the refunds took the papers from me. After that he went to this promoter in front of me, talked to him and came back to return my papers saying we will not refund. By this time the process for allotment had also not taken off. He said get the allotment after some time and stay invested you can not exit while at the same time he was doing refunds to some other influential people. Even now he is shifting the people to another of his project in Gurgaon, which he has well marketed. Also made offer to me to transfer in another project which is also pre-launch.
I am harassed completely. First there is no sign of any development of the site as yet in Faridabad, when I visited the site last month. When I approached him the other day, He said we have started work. Digging is taking place there. Pay another 10%amount for the allotment. The entire plan now he has changed when I got the Brochure yesterday. Layout plan is changed. Secondly, Now they say that AC will be provided in the master bedroom only while at the time of booking, they said it is fully air-conditioned. There were two options for car parking earlier -Rs75000 for Open car park and 150000 for Covered parking. Now this amount is Rs200000 and its the only one option he is giving. I am no more interested as this builder is just making fool of the remaining investors and buying time by just doing little for the namesake at the site place in Faridabad. When I ask for refund, he traps me saying that I will get back only 2.45lacs.
Please tell me, in a pre-launch, this was the booking amount only which I paid. Now there is no allotment and as such no formal contract between me and the promoter. At any time can I exit? If yes, then what are the scenarios–
1 After paying penalties
2 Or without penalty.
If I have to pay penalty, then to what extent. Will it be as high as 50%.How Can I get back my hard earned money from this Promoter. Am I entitled to get back my entire booking amount with interest? What are the channels whom I can approach for this gross injustice? Please Guide.
Thanks a lot in advance.
Warm Regards,
Amardeep
Vatsala Answers:
It appears that you are in the clutches of an unscrupulous developer. You are not required to pay any penalty. You should file a suit for recovery of money with interest either in the consumer court (which will be decided faster) or in the concerned civil court. You are entitled to the recovery of full monies paid with interest. You can also ask for compensation for mental harassment.Vatsala
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What Should Be Done If The Documentation Between Original Land Owner And Erstwhile Seller Is Missing?

atoneplace — Wed, 04 Mar 2009 01:53:21 +0000

Question asked by Ms. Megha Nandkumar Belwalkar from Mumbai:

Sir/Ma’am, I have like a house at 1st Floor in a chwal structure at Malavani Village, Malad (West), Mumbai. It is a chwal system Ground + 1. They call that area as ‘Gavthan’. When I demanded papers to check they have given me following documents:
1) 7 x 12 extracts (Showing agricultural land)
2) Agreement between erstwhile seller & recent owner
3) Power of Attorney executed by erstwhile seller in favor of recent owner
My question is – if 7 x 12 is showing the original land owner name and agricultural land and there is no documentation between original land owner and 1st purchaser and 1st purchaser and erstwhile seller;
If any structure is constructed before 1990s and BMC is charging property tax for the property in the name of recent owner.
Can I pay stamp duty and register my house document. Is it possible to convert land into Nonagricultural. (if not converted).
After purchase and occupation of house, is there any possibility that any authority (govt./non Govt. and/or Political) will come and show it as illegal and can demolish the same.
Please give me OPINION on the above matter.
Thanking You.
MEGHA N B

Vatsala Answers:

I understand that you want to purchase the property and have been given a few documents. You should get the same verified by a reputed local lawyer who will guide you. If is unwise to proceed without doing this. There are many issues which might have to be looked into in a case like this by a local lawyer.Vatsala

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Repatriation by an NRI of All Proceeds from Sale of Residential Real Property in India, Purchased With Foreign Exchange

atoneplace — Tue, 19 Feb 2008 03:20:46 +0000

QuestionÂ asked by MrÂ Suphal Agrawal from USA:Â

Gentlemen, I was referred to your site by one of my relatives in India.
I am a male of Indian origin, now a U.S. Citizen for several years. I am interested in purchasing residential real property near Mumbai with a goal to sell it later on (time not definite yet, but could be anytime after a year or so, depending upon the local market situation and my own financial plans) and then buy something else, but eventually I intend to repatriate all proceeds — my original investment and all gains — back into the U.S. Based on my extensive search on this topic, here is what I understand:
1) I am classified as an NRI due to having held an Indian passport previously, and due to both my parents being Indian
2) As such, I can buy residential real property in India without any specific permissions; I can pay for it via wire transfer from my US bank to the seller’s bank in India; later, I can sell it to an Indian citizen or another NRI but must hold it for at least three years after my last payment (or three years after registration, if paying all cash) — language is confusing on this three-year-hold point; through an NRO account, I can have the seller repatriate proceeds to my US bank, but ONLY in an amount not to exceed my original payment for the property
3) As an NRI, I can only do a maximum of two such sales and repatriations (principal investment only) in my lifetime
Specifically, my key concerns are: 1) Can I repatriate all gains and all investments from the sale of residential real property purchased by paying for it in forex? 2) Can I do it as and when I choose? And, 3) Does my registration as a People of Indian Origin — PIO — have any impact on my ability to do these things?
I would very much appreciate your time in helping me with the above specific questions (particularly, repatriation of all proceeds from the sale of real residential property), and I will be especially grateful if you could reply at your earliest. My contact information is noted below. Thanks again.
Sincerely,
Mr. Suphal Agrawal, USA

Vatsala Answers:Â

1. You can very well purchase residential properties in India out of foreign remittance from abroad without any prior permission of the RBI.
2. However, the repatriation of sale proceeds of residential properties is restricted only to two properties.
3. There is no lock in holding period for sale and repatriation.
4. The amount repatriable will be restricted to the amount brought in by way of foreign currency. If it was acquired out of balances in FCNR/NRE account, it will be restricted to the value of foreign currency equivalent of the Indian Rupee used for acquisition on the respective dates on which the Indian rupees were paid for purchase of the properties.
5. The repatriation option is further subject to the condition of the applicable capital gains tax on the property having been paid already. Vatsala

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What is an elegibility criteria for a PIO card?

atoneplace — Fri, 08 Feb 2008 00:55:11 +0000

QuestionÂ asked by MrÂ Mishaal from Africa:

HI,
I am a person of Indian origin but me and my family have been in Africa since 2 generations. My mother was born in India but we are unable to trace her birth certificate.
I have my 1st cousins in India in Bombay. Is there any way in which I can be elegible for a PIO card. If not, what is the alternate option for Investing in India
Regards
Mr Mishaal, Africa

Vatsala Answers:

Getting a PIO card is secondary. A person of Indian origin is defined as a person who has held an Indian passport at any time, or whose father or grandfather was a citizen of India. A person of Indian origin, can purchase property (except agricultural land) anywhere in India. No formalities are required except when sale proceeds are to be repatriated. Funds for purchase should be routed through normal banking channels. Spouses of Indian citizens are not considered as PIOâ€™s. Vatsala

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