FAQs: Purchase of immovable property outside India by Resident Individuals



Quick Summary
Resident individuals in India can own and purchase immovable property outside the country under specific conditions. This includes property acquired while living abroad or inherited from non-residents. The Liberalised Remittance Scheme (LRS) allows for remittances to be sent for such purchases, with provisions for consolidating funds for relatives. Certain restrictions do not apply to foreign nationals or for properties acquired before July 8, 1947, with RBI permission, or on short leases.

Q.1 Can a resident continue to hold immovable property outside India which was acquired by him when he was a non-resident?

Answer: According to section 6(4) of the FEMA, a person resident in India can hold, own, transfer or invest in any immovable property situated outside India if such property was acquired, held or owned by him/ her when he/ she was resident outside India or inherited from a person resident outside India.

Q.2 Can a resident individual send remittances and purchase property outside India?

Answer: A resident individual can send remittances under the Liberalised Remittance Scheme (LRS) for purchasing immovable property outside India. The remittance under the Liberalised Remittance Scheme may be consolidated in respect of relativesi if such relatives, being persons resident in India, comply with the terms and conditions of the Scheme.

Buying Property Abroad: Rules for Indian Residents

Q.3 To whom do the restrictions of transferring property outside India not apply?

Answer: The prohibition of a resident acquiring property outside India is not applicable if:

The resident is a foreign national; or

The property was acquired before July 8, 1947 and continued to be held after obtaining permission of Reserve Bank; or

If it is acquired on a lease not exceeding five years

 

Q.4 How can immovable property be acquired outside India by a resident?

Answer: Immovable property can be acquired outside India:

(i) A person resident in India may acquire immovable property outside India by way of inheritance or gift or purchase from a person resident in India who has acquired such property as per the foreign exchange provisions in force at the time of such acquisition.

(ii) A person resident in India may acquire immovable property outside India from a person resident outside India–

(a) by way of inheritance;

 

(b) by way of purchase out of foreign exchange held in RFC account;

(c) by way of purchase out of the remittances sent under the Liberalised Remittance Scheme instituted by the Reserve Bank: Provided that such remittances under the Liberalised Remittance Scheme may be consolidated in respect of relatives if such relatives, being persons resident in India, comply with the terms and conditions of the Scheme;

(d) jointly with a relative who is a person resident outside India;

(e) out of the income or sale proceeds of the assets, other than ODI, acquired overseas under the provisions of the Act;

(iii) An Indian entity having an overseas office may acquire immovable property outside India for the business and residential purposes of its staff, as per the directions issued by the Reserve Bank from time to time.




About the Author

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Finance Professional

I write about Income Tax, GST, TDS, RBI updates, government schemes, and personal finance in India. My focus is on simplifying complex tax and compliance topics into easy-to-understand guides that help readers stay updated with the latest financial rules, investment options, and regulatory changes.

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