CA Arun Tiwari
Quick Summary
Introduction For non-resident Indians (NRIs), buying or selling immovable property in India and remitting the sale proceeds is not particularly difficult, but there are certain rules and regulations that must be followed during these transactions. These regulations are established by the Reserve
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FAQ :
Yes, NRIs and Persons of Indian Origin (PIO) can purchase residential and commercial properties in India without prior RBI permission. Payment must be made in Indian Rupees through banking channels or NRI accounts. Restrictions apply to acquiring agricultural land, though inheritance is permitted.
NRIs can sell residential or commercial properties they purchased or inherited. However, agricultural land, plantation property, or farmhouses must be sold to a resident of India. Sale proceeds must comply with FEMA guidelines for repatriation.
Sale proceeds must be credited to an NRO account. NRIs can repatriate up to USD 1 million per fiscal year, provided all taxes are paid. This is limited to proceeds from two residential buildings, and a ten-year ownership tenure is usually required.
Repatriation is limited to USD 1 million annually and depends on factors like foreign exchange utilisation and loan repayments. Properties purchased using foreign funds may be exempt from the ten-year waiting period.
NRIs are subject to capital gains tax. Long-term capital gains (over three years of ownership) are taxed at 20%, while short-term gains (within three years) are taxed at 30%. Exemptions are available for reinvesting in residential properties or specific capital gain bonds.
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