NRI Legal Support

India is a great place to invest in.  Why is that?

• Firstly, the real estate industry in India has been literally unaffected by recession.
• Secondly, the governmental policies are also geared for the industry’s complete development.
• Thirdly, owning properties by NRIs has become a hassle free process.
• Fourthly, the return percentage on the profit is quite high.
• Fifth, the varieties of properties available are extensive.

ASC NRI Legal support provide ways to make an NRI property searches easy without visiting India,

• Trace out Property Records
• Use of Right to Information.
• Manual search of records in addition to online records and complete the set of documents.
• Formal Search by Search Experts.
• Finding out the current status of possession and ownership of property.
• Due diligence.
• Action in Court if required to establish the  Title.

It is always  necessary to establish clear title of the asset or  transfer the asset in the name of the current living legal owners to avoid any fraud. Moreover, in case any fraud takes place, we need to fight the legal case.

To safeguard and protect your rights, you must efficiently mutate your properties at the earliest in your name after following the proper process of law and legal advice.

Cases of Tax Application and exemption

Gifts received from ‘relatives’ are not liable to tax. Relatives include Spouse of the individual, brother or sister of the individual, Brother or sister of the spouse of the individual, Brother or sister of either of the parents of the individual, Any lineal ascendant or descendant of the individual, Any lineal ascendant or descendant of the spouse of the individual.

Other cases of tax exemption- if the gift was received on the occasion of marriage and from a registered trust.

Any gifts over Rs. 50,000 received from people who are not relatives are taxed as income in the hands of the person receiving the gift.

The property may also be subject to wealth tax. According to the Wealth Tax Act, tax is payable if the net value of the assets of an individual exceeds Rs. 30 lakh.

An NRI need not get prior approval if he sells it to a resident Indian and even if he is selling the property to another NRI or PIO.

FEMA

To be aware of the Foreign Exchange Management Act (FEMA) and its applicability to foreign transactions in India.

The acquisition and transfer of immovable property too has financial implications and falls within the ambit of FEMA. Hence, the place to get first hand information on this is the RBI notification under FEMA. These guidelines permit both Non-Resident Indians (NRIs) and Foreign Nationals of India Origin (PIOs) to enter into property transactions.

ASC NRI Legal support, 

• Documentation of Gift Deed, Sale Deed and will etc.
• Registration of Gift Deed and will
• Mutation
• RBI Approval.
• To file a suit (If needed)

• A co owner’s share is inheritable and transferable. The share of investment of each co-owner and the undivided share in right, interest, and the title should be clearly and explicitly identified.
• This help avoid problems in transfer, alienation, inheritance, and taxation.
• A Proper legal advice given at the right time can help save a lot of situations.
• There could be two kinds of partition- 1) contested or 2) uncontested,
•        In a contested scenario, when all parties do not agree, a legal suit has to be filed in the courts.
•        In an uncontested situation, all co-owners mutually agree to the solution.
• The shares of the people involved would depend on the particular share for each one as mentioned in their purchase or inheritance document.
• In the uncontested cases, the deed should be executed on a stamp paper and drafted in a clear and unambiguous manner.
• It creates new owners and needs to be registered at the office of the sub-registrar to give it a legal and binding effect.
• The deed should in particular mention the date from which the partition is effective.
• The names of the parties and their respective shares should be specifically mentioned.
• Partition of property is also subject to the laws of inheritance applicable to a particular person in a particular state.

 

GUIDELINES FOR PARTITION OF PROPERTY IN INDIA

Suppose a piece of land is owned by you and another person who may be a friend or relative. Whereas you want to sell the land, they want to keep it for the future generation. A conflict of interest arises and when efforts of compromise and negotiation fail, is when partition of property comes to the rescue. The law provides us with an opportunity to create a partition deed with the intention of dividing the piece of property among people who have a right over the property.

What is Partition of property?

The term partition in legal parlance is used for real property, by a court order or otherwise, to divide concurrent estates into portions representing the people. The proceedings for partition of property are governed under the Transfer of Property Act, 1882 along with the various acts regulated under it and the Civil Procedure Code, 1908.

How to get a partition in India?

1.Existence Of  New Title To The Property

After surrender and transfer to the rights of an estate, the property so divided gets new title. All except easementary rights are transferred by the sharers. Thereafter, the transferee being the absolute owner, may proceed with the property as he desires and can sell, gift, exchange or transfer the property.

2.Partition Deed

A partition deed helps execute a smooth division of property. There are two ways in which a property is partitioned by-

1. a) Mutual Consent
2. b) Without Mutual Consent

Mutual Consent–

-In case of partition by mutual consent, the partition deed is executed by the co-owners of the property.

-Irrespective of the number of co-owners, a deed of partition must be signed between the co-owners.

-The partition deed needs to be registered at the office of the sub-registrar that has jurisdiction over the property. The stamp duty payable is 2% of the property partitioned.

-It is not necessary that the division be equal for amongst all owners. The share of each owner depends on the amount of investment as in the purchase document or as per the law applicable.

-In case the share of investment is absent in the purchase document it is assumed as per law that all the co-owners have an equal undivided share of interest, right, and title in the property.

Without Mutual Consent-

-When all the parties to the property do not give mutual consent for partition of the property, a partition suit needs to be filed in the appropriate court of law.

-For the process to follow smoothly, the party to the suit must have ownership papers, transfer papers and all other original documents to the property.

-It is vital that the partition deed be executed on a stamp paper and drafted clearly and free of ambiguity. The share of each person should be explicitly prescribed along with their respective names.

-To bind the deed legally, it should be recorded at the office of the sub-registrar.

-The date of the partition from which it will be effective should be mentioned.

Therefore, as we see, the Partition Deed is a legally binding document which ensures that the partition of property takes place in accordance with law. The execution of such a deed ascertains that each party involved gets their fair share.

3. Co-owners’ shares are undivided

All such persons will have either equal or certain percentage of the rights to possess and use the property. One important ingredient of co-ownership is undivided share.

Although the owners own equal or a part of the whole property, their respective shares are not physically ascertainable with defined boundaries. The shares are undivided.

In the case of-

Lalitha James and others v. Ajit Kumar and others AIR 1991 MP 15

Facts:

P.S. Chouhan held vast properties. He died unmarried and issueless and he decided to give away the said properties to his 2 sisters (Mrs. Dayabai and Gracebai) and executed a gift deed in 1935. There had been no partition between them. Mrs. Dayabai was survived by appellants 2,3and 4. Gracebai is survived by appellant 1, Mrs Lalita Jaems and respondent no. 3. Mrs. Park. The 5.74 acres of land was divided between the survivors of Gracebai. Respondent no. 3 sold her share to Respondent no. 2 for Rs. 14,000/-.After the purchase, the transferee started digging on the land to raise a structure, it was objected by appellant no.1. A suit was filed by the Respondent 2.

At the Trial Court the suit was dismissed as the vendor was not in possession and the sale did not confer any right or title on them and they can get their money refunded

In the First Appeal Court it was held that the respondent no 3 was in exclusive possession of the land and rightfully sold it to the respondent no 2.

Final Judgement:

The Madhya Pradesh High Court emphasized that it is the strength of the plaintiffs title and not the absence of title of the defendant that matters. A purchaser from a co-owner of a portion of undivided property is not entitled to possession of any particular part of the joint property. His right would be for joint ownership and not for exclusive ownership of any particular part of the joint property. A transferee is not in a better position than the co-owner himself. Section 44 gives sanction to this principle.

The Respondents will be only entitled to enforce partition of the joint estate. The sale of the exclusive property cannot be accepted. Therefore, the appeal was allowed.

4. A co-owner’s share is transferable

Unless specific details as to the share of investments made for acquisition of the property in the purchase documents is mentioned, it is presumed in law, that all the co-owners have equal undivided share of interest, right, and title in the property.

A co-owner’s share in a property is inheritable and transferable. The share of investment of each co-owner in the property and the undivided share in right, interest, and title of the property should be clearly and explicitly identified. This helps avoid problems in transfer, alienation, inheritance and taxation.

5. Property partition is subject to the inheritance law

Partition of property is subject to the laws of inheritance applicable to a particular person. Different laws can apply. An interest in a coparcenary property can also be Willed away. This share does not stay in the purview of ancestral property.

If a father dies leaving behind self-acquired property, his son inherits it absolutely. The grandson cannot claim it as ancestral because it was inherited under the Hindu Succession Act.

ASC NRI legal support,

• Filing and Representation of suit for Partition of Property
• Proper and best legal Advice on Partition of Property
• Drafting of Partition Deed
• Registration of Partition Deed

In a real estate, individuals and NRI faces problem in respect of illegal sale of his property, by forging the document, and by creating the document, one of the most common ways is the impersonation of the owner who is selling or the one who is buying.

Frequently there are cases where people impersonate as the owners and carry out the transactions especially search and earmark properties owned by NRIs.

Then they prepare fake identification proofs and indulge in property fraud.

Fake and forged  documents are used to carry out fraudulent sales even Power of Attorney papers.

Mostly overseas citizens have no access or knowledge on correct procedures and formalities involved in transferring of urban residential or commercial or rural agriculture properties.

This would require complete knowledge, awareness and diligence in handling these issues at various levels.

ASC NRI Legal support,

• Finding out the updated status of ownership and possession of the property.
• Challenge of Transfer in Court Of Law.
• Due Diligence
• Identification of buyer/seller.
• Identification of a suitable property as per the requirements of the client.
• Establishing title to the property.
• Ensuring that all documents are properly executed and delivered.
• Preparing & evaluating all the documents necessary to complete a transaction efficiently & correctly.
• Negotiating, drafting and reviewing sale and purchase agreements.
• A thorough physical inspection of the property in order to negotiate a better purchase price.
• Representation before the Registrar/sub registrar for registration of the property..

• The problem is worse in cases of NRIs who are not physically present to look after the properties and forced to depend on locals to look after the properties and litigation if any.”
• How illegal occupation takes place-
• There are two ways in which illegal occupation can take place.
• “First is when squatters prepare forged documents and threaten you that you do not have legal rights to the property. Generally these are thugs or people with connections who resort to these kinds of tactics to force someone to pay a cost for redeeming their property and enjoying peaceful possession or to force them to make a sale at a distressed value. Sometimes, this has even happened with the connivance of the local revenue authorities.
• The second is where a tenant forcefully overstays and illegally occupies your property in the face of inadequate checks and balances as well as poorly drafted contracts,”

Prevention

• Keep all documentation in place to prove the legal rights over the property such as the title deeds, mutation, copy of the Will (if any) where the property has been inherited by way of  Will, original purchase agreement/sale deed, electricity bills, water bills and telephone bills etc.,”
• Keep/get all the revenue records mutations done in favor.
• If the property is inherited or has come down by way of Will and the title deed is not in the custody, in such a case it is advisable to immediately lodge a formal police complaint and insert a public notice in at least two local newspapers about the ownership rights over that particular property and obtain ‘certified copies’ of all such documents from the concerned registering authority or revenue offices.
• Pay all outgoings and liabilities like municipality / property tax to the authorities in time.
• Be in touch with the neighbors so that they may be able to notify you in case they notice any activity.
• Be in touch with friends and relatives, at periodic intervals to keep checking on the property, so that people know that the property is not a easy target.

Certain points to take care in case of  plot of land

• Generally plots with proper security are unlikely to encounter encroachment. But in some cases the chances of encroachment cannot be ruled out.
• Give specific Power of Attorney to a relative or friend.
• Take help of Professional firms who can do frequent visits and put up boards.
• For better safeguard if possible, do small concrete construction in the property, which can be rented out to a tenant under proper documentation (Rental Agreement/Lease Deed)
• In case of  old parents who have rented out their property or part of their property, then extra cautious need to be taken.

ASC NRI Legal support,

• Drafting of Rent Agreement
• Update the status property records every six months.
• File Eviction Suits

Encroachment brings about a violation of the property rights of the affected property owner. When a property owner trespasses on to his or her neighbour’s property, she/he is said to be encroaching on the neighbor’s property. Trespassing occurs when the property owner enters the grounds of the neighbour or builds a structure that extends past the lawful boundaries that separate both properties. For example, building a fence or retaining walls that crosses property lines, or having a hedge overgrow or a tree limb extend beyond property limits could be seen as encroachment.

A property owner may encroach upon his neighbour’s property in an unintentional or intentional manner. A lot of times, unintentional encroachment happens when the property owner is either not aware of valid property lines or has wrong information concerning the extent to which his property lies within legal limits. If the property survey carried out on the home and used by the property owner to carry out building renovations and extensions is invalid, the property owner may unintentionally encroach on his neighbour’s home or land. Since a property survey outlines the physical layouts of a property including the measurement of metes and bounds, wrong information contained in the survey may lead to a physical intrusion on a neighbour’s land. Unintentional encroachment problems are sometimes resolved with a simple conversation between both parties.

However, if the disagreement on whether someone’s property right was violated persists, the issue may be taken to court for a resolution. Potential homebuyers are advised to avoid properties with encroachment issues. Homebuyers can use existing surveys on the area where the property is located. Property surveys contain information about a property; information which includes directions, public roads, buildings, improvements made to surrounding property, etc. The surveys also disclose whether there are any encroachments on the home for sale or on the neighbour’s home. If the homebuyer does not want to rely on the existing survey information, s/he can obtain the services of a surveyor to conduct new measurements on the home premises.

Structural encroachment also occurs when a property owner builds or extends a structure onto the public roads. In most case, sidewalks and residential streets are public property owned by the municipal government, and a property owner who builds a driveway or erects landscape components (such as trees and flowers) that encroach on the public property, may have the structures removed by the government. Furthermore, the property owner may not be compensated for any damages to the property that occur from tearing down his or her structures.

How to avoid illegal possession or Encroachment,

A NRI who is away for long must ensure that the property back in India is safeguarded to prevent a situation where a  legal process is required. Here are a few tips for safety:

1. Documentation: Once gets the ownership of a property, apply for mutation and arrange all other papers such as, sale agreement, title deeds etc. Ensure that the municipal taxes, water bills and electricity dues are paid on time and the receipts kept secured.
2. Fencing/ Board: In case of a vacant plot it is advisable to construct a boundary wall and put up a notice board stating the ownership and right to property.
3. Public Notification: In case the property has been inherited then owner must put up notification to the same effect in local newspaper and keep copies of the same for future requirement.
4. Tenancy: In case of giving the house on rent, it is necessary to do a proper verification of the tenant and create a rental, lease and leave agreement with provisions for renewal and termination of agreement.

Precautions after property has been encroached,

• Get your documents in order
• Police complaint
• Negotiation  and
• Legal help

ASC NRI legal support,

• File Suit in the High Court or District Court (depending on the value of the land encroached on) under The Transfer of Property Act 1882
• file a civil suit seeking ‘restraint order’ or ‘injunctive relief’ (Stay) against any continuing threat.
• Search of Title Deed
• Service of the Surveyor
• Negotiations with the parties.
• Draft suitable notices of eviction

• NRIs and PIOs can inherit and hold immovable property in India from a person who is resident in India.
• However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek prior approval of the Reserve Bank for inheriting immovable property in India.
• NRIs/PIOs can sell such inherited property.
• General permission is available to the NRIs/PIOs to repatriate the sale proceeds of the immovable property inherited from a person resident in India subject to the following conditions: 
  • the amount should not exceed USD one million, per financial year
  • this is subject to production of documentary evidence in support of acquisition / inheritance of assets and an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.4/2009 dated June 29, 2009.
  • in cases of deed of settlement made by either of his parents or a close relative (as defined in section 6 of the Companies Act, 1956) and the settlement taking effect on the death of the settler ) the original deed of settlement and a tax clearance / No Objection Certificate from the Income-Tax Authority should be produced for the remittance .
  • where the remittance as above is made in more than one installment, the remittance of all such installments shall be made through the same Authorized Dealer.

ASC NRI Legal Support,

• Drafting of Will
• Registration Of will
• Challenge the genuineness of will in Court
• Filing for Succession Certificate in Court
• Legal Advice and support in obtaining Legal Heir Certificate.
• Accurate Legal Advice for Property Claims.

A will or testament is a legal document by which a person, the testator, expresses their wishes as to how their property is to be distributed at death, and names one or more persons, the executor, to manage the estate until its final distribution.

Laws applicable to will,

India has a well-developed system of succession laws that governs a person’s property after his death.

The laws that apply to making of a Will are:

• The Indian Succession Act, 1925
• Hindu Personal Laws
• Muslim Personal Laws
• The Indian Registration Act, 1908

Person competent,

• As per the Section 59 of the Indian Succession Act, an individual of sound mind who has reached the age of majority.

Person  incompetent,

• Lunatics, insane or mentally disturbed persons
• Minors i.e. below 18 years old. In the case, where a guardian is appointed to a minor, the age of maturity of such a child is considered as 21 years

Essentials of a will

• Legal declaration
• Disposition of property
• The death of the Testator:
• Revocability

Procedure for registration

• A Will is to be registered with the registrar/sub-registrar with a nominal registration fee.
• The testator must be personally present at the registrar’s office along with witnesses.
• The endorsement (signature) of the registrar is sufficient to prove the execution of the will; if at all the testators of the will are dead and if the testator had affirmed the contents of the will and put his thumb impression on the endorsement in the presence of the sub-registrar, the sub-registrar could also be considered to be an attesting witness.
• A will or codicil is not required to be stamped at all.
• Under section 18 of the Registration Act, the registration of a will is not compulsory.
• The registration is strong legal evidence in which proper parties must appeared before the registering officers and the latter must be attested after ascertaining their identity.
• A Will must be proved as duly and validly executed, as required by the Indian Succession Act.
• Once a Will is registered, it is placed in the safe custody of the Registrar and therefore cannot be tampered with, destroyed, mutilated or stolen.
• It shall be released only to the testator himself or, after his death, to an authorized person who produces the Death Certificate.
• The cover should be super scribed with the name of the testator or his agent with a statement of the nature of the document. An amount of Rs.1, 000/- will be charged as a fee.
• The deposited cover may be withdrawn by the testator or his agent on payment of prescribed fee of Rs.200.

ASC NRI Legal support,

• Drafting and Preparation of a legal Will.
• Cases involving execution of a Will.
• Cases involving fraudulent and suspicious fabrication of a Will.
• Probate of a Will or obtaining Succession Certificate & Letters of Administration. Cases involving challenging a Will or filing objections to a Probate matter.

A power of attorney is a written authorization to represent or act on another’s behalf in private affairs, business, or some other legal matter, sometimes against the wishes of the other. The person authorizing the other to act is the principal, grantor, or donor (of the power). The one authorized to act is the agent or, in some common law jurisdictions, the attorney-in-fact.

A “Power of Attorney” (POA) is a legal instrument whereby one person gives another person the authority to be his/her representative and to make binding legal and financial decisions on his/her behalf.

TYPES OF POA

General Power of Attorney

• A general power of attorney gives broad powers to a person or organization (known as an agent or attorney-in-fact) to act in your behalf.
• These powers include handling financial and business transactions, buying life insurance, settling claims, operating business interests, making gifts, and employing professional help.
• General power of attorney is an effective tool if you will be out of the country and need someone to handle certain matters, or when you are physically or mentally incapable of managing your affairs.
• A general power of attorney is often included in an estate plan to make sure someone can handle financial matters.

Special Power of Attorney

• This is often used when one cannot handle certain affairs due to other commitments or health reasons.
• Selling property (personal and real), managing real estate, collecting debts, and handling business transactions are some of the common matters specified in a special power of attorney document.

Health Care Power of Attorney

• A health care power of attorney gives your agent authority to make medical decisions for you if you are unconscious, mentally incompetent, or otherwise unable to make decisions on your own.

Durable Power of Attorney

• Suppose you become mentally incompetent due to illness or accident while you have a power of attorney in effect.
• To safeguard against any problems, you can sign a durable power of attorney.
• This is simply a general, special, or health care POA that has a durability provision to keep the current power of attorney in effect.
• You might also sign a durable power of attorney to prepare for the possibility that you may become mentally incompetent due to illness or injury.
• Specify in the power of attorney that it cannot go into effect until a doctor certifies you as mentally incompetent.
• You may name a specific doctor who you wish to determine your competency, or require that two licensed physicians agree on your mental state.

PRECAUTIONS,

• If possible Avoid to give a General Power of Attorney.
• Give only Special Power of Attorney and clearly state what the person who is getting the POA can do or undertake on your behalf.
• Check the wordings of the Power of Attorney document carefully and understand the consequences.
• Give POA only to someone who is honestly willing and able to perform the mentioned services for you.
• Power of attorney cannot be given to someone to commit an illegal act.

Requirements of Valid Power of Attorney

• The person giving and the person receiving the Power of Attorney must be competent. Minors and other persons disqualified by law cannot grant a Power of Attorney.
• POA should be given for legal purposes.
• POA must be duly stamped, notarized or registered or adjudicated, as the case may be.
• Power of Attorney executed abroad have to be certified by an Indian Consulate Officer.
• Registration of POA is compulsory in cases of ‘Special Power of Attorney’ that authorizes the holder of the Power of Attorney to present for registration, a document executed by the person giving the POA.
• Power of Attorney given abroad have to be authenticated by an Indian Consulate official or a Notary. It should be stamped or adjudicated, within three months after receipt in India

ASC NRI Legal support,

 

• Cases presented to the court.
• File declaratory suit

A person resident outside India who is a citizen of India (NRI) can acquire by way of purchase, any immovable property in India other than agricultural land/plantation/farm house. He can transfer any immovable property other than agricultural or plantation property or farm house to:

• A person resident outside India who is a citizen of India or
• A person of Indian origin resident of India or
• A person resident in India.

He may transfer agricultural land/plantation property/farm house acquired by way of inheritance, only to Indian citizens permanently residing in India.

Payment for acquisition of property can be made out of:

1.funds received in India through normal banking channels by way of inward remittance from any place of India or

2. Funds held in any non-resident account maintained in accordance with the provisions of the Foreign Exchange Management Act, 1999 and the regulations made by Reserve Bank of India from time to time.

Such payment cannot be made either by traveller’s cheque or by foreign currency notes or by other mode than those specially mentioned above. A person resident outside India who is a person of Indian Origin (PIO) can acquire any immovable property in India other than agricultural land / farm house / plantation property:-

1. By way of purchase out of funds received by way of inward remittance through normal banking channels or by debit to his NRE/ FCNR(B)/ NRO account.
2. By way of gift from a person resident in India or a NRI or a PIO. By way of inheritance from any a person resident in India or a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force or FEMA regulations at the time of acquisition of the property.

A PIO may transfer any immoveable property other than agricultural land / Plantation property / farm house in India,

1.  By way of sale to a person resident in India.
2.  By way of gift to a person resident in India or a Non resident Indian or a PIO.

A PIO may transfer agricultural land / Plantation property / farm house in India by way of sale or gift to person resident in India who is a citizen of India.

Acquisition of immovable property for carrying on a permitted activity- A branch, office or other place of business (excluding a liaison office) in India of a foreign company established with requisite approvals wherever necessary, is eligible to acquire immovable property in India which is necessary for or incidental to carrying on such activity provided that all applicable laws, rules, regulations or directions in force are duly complied with. The entity/concerned person is required to file a declaration in the form IPI with Reserve Bank, within ninety days from the date of such acquisition. The non-resident is eligible to transfer by way of mortgage the said immovable property to an AD Bank as a security for any borrowing.

Repatriation of sale proceeds- In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by NRI/PIO, the authorized dealer will allow repatriation of sale proceeds outside India provided,

1. The immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the FEMA Regulations.
2. The amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through normal currency equivalent as on the date of payment, of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property.
3. In the case if residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

In the case of sale of immovable property purchased out of Rupee funds, Ads may allow the facility of repatriation of funds out of balances held by NRIs/PIOs in their Non-resident Rupees (NRO) accounts upto US$ 1 million per financial year subject to production of undertaking by remitter and a certificate from the Chartered Accountant in the formats prescribed by the CBDT.

WHO CAN PURCHASE IMMOVABLE PROPERTY IN INDIA

Under the general permission available, the following categories can freely purchase immovable property in India. Non-Resident Indian (NRI) that is citizen of India resident outside India, Person of Indian Origin (PIO) – that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who At any time, held Indian passport, or Who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). The general permission however, covers only purchase of residential and commercial property and not for purchase of agricultural land/plantation property/farm house in India.

The Real Estate India provides following NRI services for those who would like to Invest/ buy a property in India as NRI rules and regulations. Determining your budgets, requirement, and suitable location. We as advocates help and advising in identifying the appropriate location. Understanding your budgets and getting you pre-approved through Foreign Banks as per your choice of bank.

BUY PROPERTY IN INDIA

An NRI or Person of Indian Origin (PIO) can own both residential as well as commercial properties in India and there is no restriction on the number of properties you can buy. However, you cannot purchase any agricultural land, farm house and plantation property. You can have ownership of such property only if they’ve been gifted or inherited.

In case of buying an under-construction property, must ask developer for a power of attorney favoring them. A PoA can be given to execute any contracts, deeds, mortgage, lease or sell.

All kind of authority given through PoA must investigate properly by a professional lawyer.

PRECAUTIONS,

• To get the papers verified by a lawyer before going ahead.
• To check the title papers of the property, especially if it is inherited or jointly held, and take a bank release in case it was at any point of time under mortgage.
• To take a no dues certificate from the seller at the time of purchase to ensure there is no water, electricity or any other pending bills with the authorities.
• For new constructions, land title should be clear and the builder should have taken all approvals and permits from the civic authorities in terms of construction.

HOW TO DO FUNDING,

According to RBI norms, a financial institution can fund maximum of 80% of the value of property. Rest has to come from the NRI’s personal resources. By following ways,

• Indian financial institutions give rupee loans (only graduate NRIs can avail home loans in India).
• NRIs can use is to get funding overseas where interest rates are lower

Since all transactions must happen through the banking channel, repayment has to be done by inward remittances. You can directly get the money remitted from NRO/NRE account in India or issue post-dated cheques or Electronic Clearance Service (ECS) from your NRE, NRO or Foreign Currency Non Resident (FCNR) account.

SELL PROPERTY IN INDIA

As per FEMA rules-

An NRI can sell residential or commercial property in India. But NRI can sell agricultural or plantation land or a farmhouse only to a person who is resident in India and a citizen. However, property owner are allowed to gift them to another NRI or the person of Indian origin.

Account in which sales proceeds be credited,

There are two scenarios that may arise here: 

1. Sale of property purchased by a resident Indian, in such cases the sale proceeds would have to be credited in the Non Resident Ordinary (NRO) Account.
2. Sale of property purchased by a non-resident Indian , If the property was purchased out of rupee resources, that is, income earned in rupees, or the home loan is repaid by a relative who is a resident of India, the amount must be credited in the NRO account.

It must be noted that an NRI cannot repatriate proceeds of more than two properties.

THERE ARE SOME SPECIFIC RBI GUIDELINES ON THE REPATRIATION OF SALE PROCEEDS,

Repatriation of sale proceeds of immovable property

1. Immovable property acquired by way of purchase
   1. A person referred to in sub-section (5) of Section 6 of the Foreign Exchange Management Act, or his successor shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section.
   2. In the event of sale of immovable property other than agricultural land / farm house / plantation property in India by a person resident outside India who is a citizen of India or a person of Indian origin, the Authorised Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely:
      • The immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations;
      • The amount to be repatriated does not exceed:
        1. The amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels, or
        2. The amount paid out of funds held in Foreign Currency Non-Resident Account, or
        3. The foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; and
      • In the case of residential property, the repatriation of sale proceeds is restricted to maximum two such properties.
2. Immovable property acquired by way of inheritance/ legacy/ out of Rupee funds
   1. A Non-Resident Indian (NRI) / Person of Indian Origin (PIO) may remit an amount, not exceeding US $ 1,000,000 (US Dollar One million only) per financial year out of the balances held in NRO accounts / sale proceeds of assets by way of purchase / the assets in India acquired by him by way of inheritance / legacy/ out of Rupee funds. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 (US Dollar One million only) in any financial year requires prior permission of the Reserve Bank.
   2. In cases of deed of settlement made by either of his parent or a close relative (as defined in Section 6 of the Companies Act, 1956) and the settlement taking effect on the death of the settler, the original deed of settlement and a tax clearance / No objection certificate from the Income-Tax Authority should be produced for the remittance.
   3. Where the remittance as above is made in more than one installment, the remittance of all such installments shall be made through the same Authorised Dealer.

Tax deduction

If a property is held for 3 years, it is treated as long-term capital gains and taxed at 20%. if property is held for shorter than 3 years, it is treated as Short term capital gains, there would be a 20% TDS for NRIs on sale of property,

ASC NRI Legal support,

• Identification of buyer/seller.
• Identification of a suitable property as per the requirements of the client.
• Ensuring that all documents are properly executed and delivered.
• Preparing & evaluating all the documents necessary to complete a transaction efficiently & correctly.
• Establishing title to the property.
• Negotiating, drafting and reviewing sale and purchase agreements.
• Representation before various authorities (Registrar, Courts etc.)
• Repatriation advice and any other advice.

The Family Law Act 1975 determines how to divide property in the event of separation of a married or de facto couple. The courts will consider the general principles of family law when reviewing a property settlement dispute, focusing on the parties’ financial contributions, non-financial contributions, and future requirements.

Important Steps for property valuation

1. If parties agree on the value of the property
   • If two parties in a property settlement disputes agree with the value of the property, the court will accept the agreed valuation. It is the best case scenario when seeking orders from the court. parties can come to an agreed valuation of the property by consulting the market and looking at similar houses in the same location to determine value. Each party may also seek further advice from real estate agents in the form of appraisals.
2. If parties cannot agree on the value of the property
   • If the parties cannot come to an agreed value of the property, they may seek the advice of a valuer. The court will then require the valuer to provide a sworn valuation in the form of an affidavit, which the parties can file in court.
     The party seeking the valuer’s advice must pay for their services. Alternatively, they can come to an agreement with the other party so that they can split the costs equally. Although there is no set rule, the court may also make an order to divide the costs of the valuer evenly between the parties.
3. If parties cannot agree on a valuer

• Sometimes parties may not agree on which valuer to engage for the property valuation. In this case, The parties can either,
  • Apply for an appointment of a valuer through an independent institution
  • Request that the court appoints a valuer.
  • Engage separate valuers. The valuers will need to attend a conference before any hearing in the court and prepare a report as to the issues discussed. The court will use this report to examine any issues that remain in disagreement.
  • Allow the court to decide on the value of the property after both parties provide evidence, including reports from valuers if available.

Things to be kept in mind during settlements-

• Proper legal advice is mandatory for resolving issues in a fair manner
• To hire a legal representative who can assist in preparing a comprehensive report on the assets along with an evaluation of each asset at the current prevailing market price.
• All legal advice including the property valuation in India should be taken into account at the time of divorce as the court orders the financial settlement only during the divorce process.
• Each income disparity should be reflected in the division.
• If these factors are not adequately considered at that time, then it will probably be too late to rectify, and legal rights will never be restored.

What is Adoption?

Adoption is the process through which a child becomes the lawful child of his adoptive parents. He will have all the rights, privileges, and responsibility of a biological child.

In India the adoption procedure is governed by various statutes and guidelines provided by the Central government. These statues and guidelines have extensive provisions covering precise and clear definition of adoption, who can be adopted, who can adopt to the rights of the adopted child and other related provisions.

The laws of adoption are Guardian and Wards Act, 1890, The Hindu Adoptions and Maintenance Act, Guidelines Governing Adoption of Children, 2015, Juvenile Justice (Care and Protection of Children) Act, 2015.

Requirements for Perspective Adoptive Parents (PAPs):

• Up to 2 children in the home are allowed to adopt healthy children. Families with 3 or more children will be required to adopt from the special needs category.
• PAP(s) must be at least 25 years older than the child they are adopting.
• Individual PAP age should be no more than 55 years.

Married Couples:

• Married couples must be married for at least two years and have a stable marital relationship.
• To adopt a child up until 4 years of age, the combined maximum composite age of the adoptive parents should be less than 90 years at the time of registration with CARA.
• To adopt a child 4 and up until 8 years of age, the combined maximum composite age of the adoptive parents should be less than 100 years at the time of registration with CARA.
• To adopt a child 8 and up until 18 years of age, the combined maximum composite age of the adoptive parents should be less than 110 years at the time of registration with CARA. NOTE: USCIS limits the age of an adopted child who can be immigrated to the US to less than 16 years of age. USCIS will allow children 16, 17 and up to 18 years of age if that child is a biological sibling and part of a sibling group (with younger siblings) that is being adopted together at the same time.

Single Persons:

• Singles should be less than 45 years at the time of registration with CARA to adopt a child up until 4 years of age.
• Singles should be less than 50 years at the time of registration with CARA to adopt a child 4 and up until 8 years of age.
• Singles should be less than 55 years at the time of registration with CARA to adopt a child 8 and up until 18 years of age. NOTE: USCIS limits the age of an adopted child who can be immigrated to the US to less than 16 years of age. USCIS will allow children 16, 17 and up to 18 years of age if that child is a biological sibling and part of a sibling group (with younger siblings) that is being adopted together at the same time.
• Un-married or single men may not adopt a girl child.

What is CARA?

Central Adoption Resource Authority (CARA) is a statutory body of Ministry of Women & Child Development, Government of India. It functions as the nodal body for adoption of Indian children and is mandated to monitor and regulate in-country and inter-country adoptions. CARA is designated as the Central Authority to deal with inter-country adoptions in accordance with the provisions of the Hague Convention on Inter-country Adoption, 1993, ratified by Government of India in 2003.  CARA primarily deals with adoption of orphan, abandoned and surrendered children through its associated /recognised adoption agencies

Contact Details:-

Address: Central Adoption Resource Authority, Ministry of Women & Child Development, West Block 8, Wing 2, 2nd Floor, R.K. Puram, New Delhi-110066 (India)
Telephone Numbers: +91-11-26180194
E-mail: [email protected]
Website: http://www.cara.nic.in/Index.aspx

Legal procedure

• The specialized agency shall then file an adoption petition in the court having jurisdiction within 7 days of the acceptance.
• The Court shall then hold the in-camera proceedings and dispose the case within 2 months.
• The court provides for a certified copy of adoption and the same shall be forwarded by the adoption agency within 10 days.
• After receipt of the order, the prospective adoptive parent becomes the legal parents of the child.
• Constant follow up is required by the specialized adoption agency.

ASC NRI Legal Support,

Process involves several compliances, Court process, and Approvals,

• Cases involving adopting a child from a relative in India under the various rules and laws applicable.
• Cases involving adopting a child directly from the biological parents under the Hindu Adoptions Act.
• Cases involving adopting a child in India from directly natural biological parents or a child welfare agency or an Orphanage

Steps involved in Inter-Country Adoptions

• Adoption Ceremony Registration of Adoption Deed
• Home Study Report / Approval
• Court Decree / Order
• Issuance of the Passport of the Child
• Birth Certificate of the Child
• No Objection Certificate or Letter from the CARA

Capital Gain-

Any profit or gain that arises from the sale of a ‘capital asset’ is a capital gain. This gain or profit is charged to tax in the year in which the transfer of the capital asset takes place.
Capital gains are not applicable when an asset is inherited because there is no sale, only a transfer. However, if this asset is sold by the person who inherits it, capital gains tax will be applicable. The Income Tax Act has specifically exempted assets received as gifts by way of an inheritance or will.

Capital Asset- Land, building, house property, vehicles, patents, trademarks, leasehold rights, machinery, and jewelry.

Capital Gains Tax-

• Short-term capital asset – An asset which is held for not more than 36 months or less is a short-term capital asset.
• Long-term capital asset – An asset that is held for more than 36 months is a long-term capital asset.

Capital Gains Tax in India:

In India, the long-term capital gains on stocks and equity mutual funds are not taxed. But, the short term gains will be taxed at 15 percent. In case of debt mutual funds, both short and long term capital gains are taxed. The short-term capital gain on debt mutual fund is added to the income and taxed as per the individual’s Income Tax Slab and the long-term capital gains on debt mutual funds are taxed at 20 percent with indexation and 10 percent without indexation. Indexation is adjusting the purchase value for inflation. The indexation increases the purchase cost and lowers the gain. The taxpayer can avail the capital gains statement from CAMS Online and Karvy.

Tax on Short-Term and Long-Term Capital Gains

• Tax on long-term capital gain: Long-term capital gain is taxable at 20% + surcharge and education cess.
• Tax on short-term capital gain when securities transaction tax is not applicable: If securities transaction tax is not applicable, the short-term capital gain is added to your income tax return and the taxpayer is taxed according to his income tax slab.
• Tax on short-term capital gain if securities transaction tax is applicable: If securities transaction tax is applicable, the short-term capital gain is taxable at the rate of 15% +surcharge and education cess.

• An NRI / PIO may purchase property in India by remitting funds into India from his bank account abroad or from funds held in his NRE / FCNR (B) / NRO account held with a local bank. Suppose you don’t have enough money, nothing prevents you from taking a home loan readily offered by various banks in India.
• Similarly, in case of a sale, the amount may first be credited into any of your accounts in India and the proceeds may later be repatriated abroad.
• Repatriation may be by way of inward remittance or by debit to NRE/FCNR (B) account. But there is a cap on how much you can send back. If you had purchased the property for, say, $1,25,000 (Rs 50 lakh, approximately) through a dollar remittance or through your FCNR(B)/NRE account, you can repatriate only so much, although you might have sold the property for Rs. 75 lakh.
• You could have also credited the sales proceeds to your NRO account. If so, the amount to be taken overseas cannot exceed $1 million per calendar year. (Normally, the balance in NRO account is not repatriable. Repatriation of sales proceeds of immovable property is allowed on an ad hoc basis). The remittance from the NRO account was previously subject to a lock in period of 10 years. The RBI has now removed this restriction.
• The proceeds of property received by way of gift can be credited only to the NRO account. Hence, repatriation of the same will come under the $1-million limit.

Subject to the production of documentary evidence in support of inheritance and tax clearance certificate/no objection certificate from the Income-Tax authority, sales proceeds (up to a maximum of $1 million per calendar year) of property acquired by way of inheritance can be taken overseas. In case this property has been inherited from an NRI or a PIO, along with documentary evidence and no objection certificate, prior approval of the RBI may be necessary.

Repatriation of Sale Proceeds

• An NRI/ PIO may repatriate the sale proceeds of immovable property in India:
• If the property was acquired out of foreign exchange sources i.e., remitted through normal banking channels/ by debit to NRE/ FCNR (B) account the amount to be repatriated should not exceed the amount paid for the property.
• Repatriation of sale proceeds of a residential property purchased by NRI/ PIO out of foreign exchange is restricted to not more than two such properties. Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to USD one million, per financial year.
• If the property was acquired out of Rupee sources, NRI or PIO may remit an amount upto USD one million, per financial year, out of the balance held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to all necessary tax compliance.
• In the case of sale of immovable property purchased out of Rupee funds, Ads may allow the facility of repatriation of funds out of balances held by NRIs/PIO in their Non-resident Rupee (NRO) accounts up to US$ 1 million per financial year subject to production of undertaking by remitter and a certificate from the Chartered Accountant in the formats prescribed by the CBDT.