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Buying properties in India

H. P. Ranina / 25 June 2012

 

I am planning to return to India only in early 2013. However, I wish to buy a couple of properties in India in the next few months before I return. Can I do so though I will still be non-resident at the time of purchase of the properties?  

S K Chakraborty, Doha

 

A non-resident Indian or a person of Indian origin can purchase immovable property in India. A non-resident Indian who has an Indian passport is free to purchase any number of properties in India. In other words, his non-resident status does not, in any way, prevent him from buying immovable properties. The only prohibition is in respect of purchase of agricultural land and plantations. No permission of any authority or the Reserve Bank of India is necessary.

In the case of a person of Indian origin who is a citizen of a foreign country, he can purchase immovable property in India except agricultural land and plantations.

However, if he owns more than two properties in India, he is required to intimate to the Reserve Bank of India such acquisition. Prior permission is not necessary.

In both cases of NRIs and PIOs, remittance of funds to India for purchase of properties is required to be made in foreign exchange through banking channels. However, if they have rupee funds lying in the Non-Resident (Ordinary) Account, the property can also be purchased by utilising these funds. Both under the Income-tax Act and the Wealth-tax Act, one residential property which is used for occupation during visits to India is exempt from tax. Annual value of more than one property is liable to income-tax and the value of such property is liable to wealth-tax every year, the value to be determined as on March 31, of each year.

 


The writer is a practising lawyer, specialising in tax and exchange management laws of India 


Money Times adviser H.P. Ranina answers questions from our readers. Write to: Money Times, P.O. Box 11243, Dubai, UAE or CLICK HERE

 
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