NRI wants to purchase an Agricultural Land on Wife's name

2100 views 2 replies

Shailendra Pokle

1 Points Joined September 2019

I am working abroad from December’2017 on Work Permit and all my earnings are legal and remittances are executed through proper banking channel. Since I am staying abroad for employment, I am an NRI as per both IT Act and FEMA Act.

My wife also accompanies me on Dependent Visa from December’2017.

For last calendar year 2018, she was in India for total 57 days.

This year in 2019, she is in India for 108 day i.e. 3.5 months and will stay for atleast another 2.5 months.

Now I have decided to purchase 7 acres of agricultural land (1 piece of 3 acres and another piece of 4 acres) in Maharashtra. My father has agricultural land on his name and my wife's father also has agricultural land on his name.

But now I came to know that as an NRI, I cannot buy agricultural land on my name. Even my wife was not in India for 180 days in calendar year 2018 and hence she is NRI as per FEMA definition, so I cannot buy it on her name also. So I am thinking for below options-

1) Buy 1 piece on Wife’s father’s name immediately and then when she will comply to the definition of Resident Indian maybe next, her father can make a gift deed to her. Second piece of land I can buy directly on her name next year.

2) Buy both pieces on my sister’s name and then when I will comply to the definition of Resident Indian in future, my sister can make gift this property to me. My sister has lost her husband in 2011 and she holds an agricultural land on her name but earnings are insufficient so I regularly gives her 2-3 lacs every year.

3) This year let my wife complete a stay of min 180 days in India and then next year buy both the pieces of land on my wife's name.

Questions are-
a) For executing option 1, can I transfer 30-35 lacs to my wife's account through netbanking/cheque and then she transfers this amount to her father. Will this transaction be legally valid? I assume both these money transfers will fall under definition of Gift to Blood Relatives.

b) For executing option 2, can I transfer around 80-90 lacs to my sister in 4-5 big transactions. Will it be a legally valid transaction? Will I need to execute Gift Deed for such transfer?

c) For executing option 3, will there be any future problem like govt. authorities disagreeing wife’s 180 days stay in India, as ground to buy agricultural land on her name.

Or suggest any better option.

Replies (2)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197276 Points Joined July 2016

1) Buy 1 piece on Wife’s father’s name immediately and then when she will comply to the definition of Resident Indian maybe next, her father can make a gift deed to her. Second piece of land I can buy directly on her name next year.

That may lead to double stamp duty & registration charges.

2) Buy both pieces on my sister’s name and then when I will comply to the definition of Resident Indian in future, my sister can make gift this property to me. My sister has lost her husband in 2011 and she holds an agricultural land on her name but earnings are insufficient so I regularly gives her 2-3 lacs every year.

That seems to be better option.... even time lapse in your residential status can be absorbed easily.

3) This year let my wife complete a stay of min 180 days in India and then next year buy both the pieces of land on my wife's name

That is the best option, provided the seller agrees.

.Questions are-

a) For executing option 1, can I transfer 30-35 lacs to my wife's account through netbanking/cheque and then she transfers this amount to her father. Will this transaction be legally valid? I assume both these money transfers will fall under definition of Gift to Blood Relatives

You can give loan or gift any amount to your wife through banking mode, without any litigation.

.b) For executing option 2, can I transfer around 80-90 lacs to my sister in 4-5 big transactions. Will it be a legally valid transaction? Will I need to execute Gift Deed for such transfer?

You can give it as loan also, bank pass book entries will authenticate it. For Gift you will be required to register deed.

c) For executing option 3, will there be any future problem like govt. authorities disagreeing wife’s 180 days stay in India, as ground to buy agricultural land on her name.Or suggest any better option.

Once she becomes Indian resident, under IT act and FEMA act .... being citizen of Independent India, she gets all the rights common to all !!!

ravi

student

44 Points Joined August 2017

Some State governments in India have rules that allow only farmers to buy agricultural land in their State and this restricts even Indian citizens from buying agricultural land. An NRI is still an Indian citizen although he is not residing in India owing to his occupation, business or job requirements. Therefore practically he doesn't still lose his status as a citizen of India and can certainly buy or sell property just like a resident Indian would do. But Investment in agricultural property, plantation and farmhouse is prohibited for all classes of persons resident outside India, be it NRIs/OCBs/foreign citizens or other foreign entities. Since general permission is not available to NRI/PIO to acquire agricultural land/ plantation property / farm house in India, such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India. Approval is required from the Reserve bank of India which one can assume is not easily available and this would depend on individual circumstances.

If an NRI purchased land without the permission of RBI, then he is bound to pay penalty under section 13 of FEMA act.