Legalities of NRI property ownership in India

nri property laws in india

As the Indian real estate environment has become very conducive for NRI investors yet again, there are some questions or points those to be cleared for better decision. These points may be useful for NRI Real Estate Investment in Commercial or Residential Property. Here is some guideline for NRI Investment from Legal aspect.

Can an NRI use a Will for property in India to someone else — either another NRI or a resident Indian?

An NRI can inherit any immovable property in India, whether it is residential or commercial — and even agricultural land or a farmhouse (which they are otherwise not entitled to purchase).

An NRI is also free to inherit property from another NRI or resident of India. However, the RBI’s permission is necessary if the property is inherited by a citizen of a foreign state and is a resident outside India.

Can a property be gifted, and what are the statutory charges levied on a gifted property?

An NRI can gift residential and commercial property to a person residing in India, or another NRI. However, if the property is agricultural land, plantation property or a farmhouse, it can only be gifted to a citizen of India residing in India.

Gifts received from relatives (as defined under the Income Tax Act) are not taxed — but at the time of registration, one has to pay the prevalent stamp duty and registration charges. Relatives include a spouse, brother or sister, brother or sister of the spouse, brother or sister of either of the parents and any lineal ascendant or descendant of self or spouse. If the gift is received on the occasion of marriage or from a registered trust, it is exempt from tax.

Some NRIs are more interested in investing in Indian real estate via companies they have formed on foreign soil, or they may work for a foreign company that is interested in establishing a footprint in India.

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