FEMA QUERY : OCI Card Holder (FEMA Resident) - Purchase of Agricultural Land

Civil law 246 views 2 replies

NAVEEN KUMAR

Associate General Manager

31 Points Joined September 2017

I am writing to seek clarification regarding the eligibility of an OCI cardholder, who is also a Person Resident in India under FEMA, to acquire agricultural land in India.

I was born in India in 1976 and was an Indian citizen by birth, acquired Irish citizenship in 1989 and subsequently obtained an OCI card in 2006. I have been in full-time employment and continuous residing in India since 1996 and is considered resident under both the FEMA and the Income-tax Act.

I understand, an OCI who qualifies as a FEMA resident in India should, in principle, not be subject to FEMA restrictions on the acquisition of agricultural land.

1. Whether an OCI cardholder who is a resident in India under FEMA is permitted to acquire agricultural land in India, given that they are not a "person resident outside India".

2. Whether the restrictions under FEMA Notification No. 21/2000-RB apply to such an individual like me, or whether they are treated on par with Indian citizens for property transactions due to their resident status under FEMA.

3. Whether there are any clarificatory circulars, notifications, or precedents issued by the Reserve Bank of India that specifically address the acquisition of agricultural land by OCI cardholders who are FEMA residents in India.

I would be grateful for your response to ensure that any proposed transaction is fully compliant with applicable FEMA regulations and does not violate any restrictions.

Given the complexity arising from multiple FEMA notifications, FAQs, and judicial precedents—including the Delhi High Court’s, affirmation of penalties for contraventions and Section 7B provisions of Citizenship Act, I seek your guidance how to seek clarification from RBI on a OCI who is “person resident in India” and the blanket restriction on OCIs acquiring agricultural land.

Replies (2)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9106 Points Joined December 2011

OCI cardholders are generally not allowed to buy agricultural land, plantation property, or gifted from a relative who is an Indian citizen or NRI.

OCI cardholder can inherit agricultural land from their parents who are Indian residents or citizens.They can also receive such properties as a gift,from relative but selling or transferring it might require RBI approvals

NAVEEN KUMAR

Associate General Manager

31 Points Joined September 2017

Thanks for revert Mr. Rama,

OCI defination as per fema ndi rules means : “OCI” or “Overseas Citizen of India” means an individual resident outside India who is registered as an Overseas Citizen of India Cardholder under section 7A of the Citizenship Act, 1955 ( 57 of 1955);

I understand an OCI cardholder who qualifies as a Person Resident in India under FEMA is not regarded as a “person resident outside India”. Therefore, he will be eligible to acquire agricultural land in India, as the FEMA restrictions apply only to those who are resident outside India.

There is no specific RBI notification exclusively addressing OCI cardholders who are residents in India acquiring agricultural land. The position is governed by the Non-Debt Instrument Rules, 2019, which impose restrictions only on NRIs/OCIs who are resident outside India.

However, one has to see Section 7B Citizenship Act as well.

If allowed by FEMA, whether guideline of MHA or CItizenship Act can take such privilege given by FEMA.

Yours thoughts please on a OCI who is “person resident in India” and whether there is the blanket restriction on OCIs acquiring agricultural land.