dear viewers there are a lot of Taxation related issues FAL law issues when it comes to question of gifting and inheriting properties both by nris as well as the resident many times it gives rise to confusion what I should do and what I should not do to simplify and bring to your knowledge what are the things you should be looking at who can do what and who cannot do what I have invited to this expert speaks program chartered accountant danush bolar who is a femal law specialist stay till the end of this video we are
going to discuss various aspects of gifting and inheritance of properties both for nris as well as residents in this particular video this is NRI money clinic forio and I am Dr Chandra Khan your financial guide for a happy [Music] living NRI money Clinic no hype just the right advice to talk about the gifts and inheritance and the laws covering that I have invited for today's podcast chartered accountant danush bolar danush bolar is a practicing chartered accountant partner at ntin jetti and Co mango he has to his credit working as a FMA specialist since many years
and he has helped a lot of nris in solving their problems around the fal Law related issues in today's episode he's going to bring all aspects of transfer of properties as gift as well as inheritance both for the nris as well as the resident Indians welcome to this episode Mr Danish bolar thank you Mr danish bolar when it comes to question of transfer of properties beat by way of gifts or inheritance there are many many problems or there are many complex issues which gets involv I have collected a list of questions for you today the
prevailing loss in India as well as the laws which are applying on the femma side please help our audience to understand what are the things that they should follow and what are the things that they need to avoid my first question to you is can an Indian resident B with immovable property to an NRI or an ooca under Indian law see uh before answering this I'd like to start with a brief overview of a foreign Exchange Management act what is femma see femma is key of legislation that governs the crossborder transactions in India ensuring that
they comply with the country's foreign exchange policies so when dealing with the crossb transactions whether it's a resident sending money abroad or a non-resident acquiring property in India making investment in India it is essential to refer to femma regulations to ensure compliances specifically FMA rules comes into play when handing inheritance or gifting of property fore an investment and repatriation of the funds so now moving to your questions yes Indian resident can B with removable property to n n or OCA this is clearly allowed under the Indian law as well as in the femma regulations so
according to F regulations n OCS can inherit the property without any restrictions whether it's from Resident or NRS for instance if an Indian resident B with a house in in Mangalore to their NS and our daughter the child can legally inherit the property uh Mr Danos what does the femma rule specify regarding acquisition of properties by nris and ois by way of inheritance as I said femma rules allows nris and ocis to acquire immovable property by of inheritance what the law is is is NRS and OCS can inherit immovable property from a non-resident who had
acquired the property under the foreign exchange law prevailing at the time of acquisition or from a person resident in India so here one thing to be kept in mind is when n and O is inheriting property from a non-resident one has to see whether a non-resident has acquired the property initially as per the law prevailing at the time of Acquisitions so the law generally says is the funds for the acquisition of removable property by an NRI OCA should come by way of inward mittance or it should be utilized from the funds available in the N
account or nro account if that is the case then he can inherit the property say for example such non-resident he has initially acquired the property I mean he has kept his resident account open fun and out of that funds he has acquired the immovable property which is a violation as per them law because non-resident are not allowed to keep a resident account suppose now the NRA these uh children who is n and O wants to inherit that property acir that property by inheritance that would an to violation because this parent has acquired the property which
is not in accordance with the Fon that's why when nris are inerting the property one has to see whether the property was originally acquired in accordance with the FMA law prevailing at the time of acquisition uh Mr danush when it question of nris they have got lot of restrictions around buying agriculture land FM land aricultural farms and other things are there any restrictions for nris and ois to inherit agriculture land and related uh Horticulture land farmlands and others no there are no restrictions on nris or ocis inheriting agriculture land Plantation property farmouse they can legally
inherit such properties but when they're selling that property uh they can only sell them to Indian residents for instance if an NRI inherits a family owned Farmhouse or agriculture property they can retain own or even manage agricultural activities but if they decide to sell the property it must be to a Indian resident it cannot be sold to NIS you have clarified these points which are there in my mind now the next question is Let's uh say an NRA has inherited certain properties in accordance with the FMA law now he wants to sell this property and
when the sales considerations come can he repatriate this money to any other part of the world if yes are there any restrictions around how much he can repatriate or are there any conditions attached with it after selling the Inherited property uh nris and ocis can repatriate up to USD 1 million per Financial year under the 4 exchange law so if they wish to repatriate More Than This limit then they would need to approv from the RBI for example if NRI inherits of uh house worth 10 CRS they could sell it but they can transfer up
to USD 1 million per Financial year but if they want to repatriate more than that in a financial year then they have to seek RBI approval apart from this there are no restrictions as such they can uh repatriate the funds so when they sell the property the funds can be remitted to their nro account and the applicable taxes has to be discharged and once the tax is paid on Furnishing of the 15 cscb as insisted by the bankler the funds can be repatriated another doubt which is there in my mind is these are days n
Community is pretty large and it is giving rise to all kinds of permutations and combinations uh with a category of nris and people living outside one of the things that might happen is the SP House of an NRA or a Pio could be a foreign National I'm not telling that he's a Pio he's a ooca card holder he could be the just another National maybe an Indian marrying somebody from Europe somebody from Canada or whatever could be the case can a foreign National inherit properties which are there inside India yes a for foreign citizen who
is not a NRI or o can inherit immovable property in India but to retain that property they have to seek RBI approval so once the RB approval is given they can retain that property so the children of Indian origin who has acquired the foreign citizenship but do not hold oci card they will need to RBI approval to hold the inherited immovable property in India now coming to sale now the foreign citizens who who acquire the immovable property by way of inheritance can sell the immovable property in India but here also when selling to a Indian
resident they don't have to seek RBI approval but if they're selling to or oci they have to seek RBI approval seek sell to another foreign citizen is not permitted at all so these are the things to be kept in mind when a foreign citizen is acquiring immovable property in India by way of inheritance so first thing is they can inherit the immovable property but to retain that property they have to seek RBI approval and coming to sale sale to Indian resident is permitted without RBI approval but s to NRI another NRI they have to get
RB approval but they are not just allowed to sell it to another foreign National as you said that yes yes they're not allowed to sell when we talk about nris ocis we hear about one other terminology called the pios when it comes to question of acquiring properties in India what is the status of pio is it described if somebody is a Pio can he acquire immovable property by way of inheritance no the Pio concept is no longer applicable to the acquisition of immovable property in India since 2018 however the Pio concept continues to exist for
other res such as bank accounts deposits so for example if someone of Indian origin who holds a Pio card and wants to acquire property in India they cannot do so unless they obtain a OC card however they can still manage their bank accounts in India as a Pio so but to acquire immovable property it is mandatory for them to obtain o card so the concept of poo is gone when it comes to question of properties how with respect to other asset class other assets like you know bank accounts and other things yes yes now let's
uh discuss the same issue in a another way now there are resident Indians whose children have gone abroad uh settled whatever could be their status nris ois foreign National whatever it is can they gift immovable property to an NRA OCA or a foreign citizen the resident Indians can they give immovable property to an NRA oci Pio or oriz sen resident can gift immovable property to Anri UCI as per the FMA rule there is no limit on the number of property or the value of the property that can be gifted however one has to make sure
that the doni has to be relative as per the definition provided under the company's act the definition of relative as for the company's act the spouse is in considered as a relative the parents is considered as a relative the son Sons wife daughters daughters husband and brothers and sisters are considered as relatives so only the n and OC can acquire from a resident relative by have gift from a non- relative it is not permitted I have come across some cases where I have heard that some nationalities are not allowed to buy property in India is
it true if it is yes which nationalities are not allowed to buy property in India yes citizens of certain neighboring countries like the Pakistan Bangladesh Sri Lanka Afghanistan China Iran Hong Kong makao and Nepal Bhutan and North Korea are prohibited from acquiring immovable property in India without prior approval of the Reserve Bank of India so irrespective of res their residential status in India whether they are resident in India or non-resident they have to get RBI approval to acquire removable property in India but this restrictions is not applicable for ocas so if they are OCA card
holder then they can acquire removable property without RBI approval but if they're not OC card holder but they are foreign citizens citizens of these countries then they have to get RBI approval to acquire the immovable property in India Mr danush these days Indians also invest abroad they go and buy property in Bali they go and buy property in UK Dubai us all over the place they buy properties when they have properties outside of India and for any reason before they make any arrangements or whatever it is they die can a resident acquire a property which
is held abroad by way of gift or inheritance from another person who is resident in India yes an Indian resident can inherit or receive immovable property located abroad from another Indian without needing to sell the property or bring the proceeds into India as long as the property was initially acquired in compliance with the femma regulations the property must have been purchased acquired in accordance with the FEA regulations at the time of Acquisitions this generally would means that the property was acquired under lrs because lrs is the only way for a resident to acquire immovable property
out in outside India which has a limit of USD 250,000 per Financial year now when it comes to inheriting or receiving immovable property outside India from a non-resident the law is different he can receive such property by way of inheritance or gift but he has to sell this property and bring back the funds to India he has to repatriate the funds to India so when he is receiving a property from a resident he need not sell the property and bring back the funds but when he is receiving a property from a non-resident he has to
sell the property and bring back the funds to India so that's the major difference so if somebody has inherited from an NRA and the receiver is an Indian resident so such properties cannot be left there as it is he should take imate action to sell it off and bring the proceeds back to India yes yes however if you had inherited from another Resident Indian property is again held abroad this property was acquired as per the regulations of Emma which means the funds were remitted out of India under the liberalized remittance schem yes property can still
remain outside of India and the receiver can take action as for his requirement whenever it is required there is no immediate compulsion on the part of the receiver to liquidate prop yes now this gives one more doubt in my mind now let's say there is an NRI who came back to India returning now he is a resident but the property is acquired by him abroad at the time of being a resident can he give this property to another Resident or to his hair yes this is permitted suppose if the property was acquired when he was
a non-resident now he is a returning NRI returning Indian the resident can acquire such property by way of inheritance or gift there is no such restrictions under FEA law for this transactions he need not sell it immediately he need not sell it immediately or he can retain that property and he can sell it whenever he want there is no restrictions on the F so the only restrictions comes if the giver is still an NRI and he gifts it or the resident Indian has inherited it then he can't maintain it outside and the money has to
come back yes exactly exactly this is what the law says uh Mr danush I know it's a very complex part of the law uh very difficult for people to understand uh at a common maths level if any of our audience is in similar situations of receiving gifts or inheritance the best advice the best force of action that they have to take is whether it is applicable or not have a word with a FAL expert and take their opinion are you required to maintain any specific paperworks or you have to make certain things uh clear before
the actions are taken that's a good idea do not neglect those parts of the law which you are not very familiar with it's always makes sense to be on the right side of the law thank you dush and than for your time and efforts to make it as simple as possible for the benefit of our community of uh listeners thank you very much for your time again thank you thank you dear viewers gifting and inheritance of property by nris residents involves looking into various aspects of uh laws pertaining to acquisition of properties in India as
well as the fala aspects hope the video that I have done today helped you to understand at least at a superficial level what are the things you need to be knowing if it helped you to understand the mindfield of different aspects of the law do not forget to give me a thumbs up if you are somebody who is yet to subscribe for this channel hit the Subscribe button and press the Bell icon do not forget to share these videos with your near and dear ones friends and relatives thank you very much for watching this episode
on NR Clinic I shall be back with you with yet another expert with yet another topic next Tuesday till then stay safe Jay hin press the Bell icon for more details and subscribe our Channel [Music]
