Sunday, February 7, 2016
Acquisition and Transfer of Immovable Property outside India
Acquisition or transfer of any immovable property outside India by a person resident in India would require prior approval of RBI except in the following cases:
a) Property held outside India by a foreign citizen resident in India;
b) Property acquired by a person on or before 8th July, 1947 and held with the permission of RBI;
c) Property acquired by way of gift or inheritance from:
i. persons referred to in (b) above;
ii. persons referred to in section 6(4) of the Act;
d) Property purchased out of funds held in Resident Foreign Currency (RFC) account;
e) Property acquired jointly with a relative who is a person resident outside India provided there is no outflow of funds from India;
f) Property acquired by way of inheritance or gift from a person resident in India who acquired such property in accordance with the foreign exchange provisions in force at the time of such acquisition
An Indian company having overseas offices may acquire immovable property outside India for its business and residential purposes provided total remittances do not exceed the following limits prescribed for initial and recurring expenses, respectively:
a) 15 per cent of the average annual sales/ income or turnover of the Indian entity during the last two financial years or up to 25 per cent of the net worth, whichever is higher;
b) 10 per cent of the average annual sales/ income or turnover during the last two financial years.
For the purpose of these regulations, 'relative' means husband, wife, brother or sister or any of his/her lineal ascendant or descendant.
The new regulations shall come into force with effect from January 21, 2016.
Based on RBI Circular dt 04/02/16. Please visit www.rbi.org.in for any further clarification if required….. Poppy