Do you want to Sell property in India ?
30 Jun 2022
Published in: Member News
Can an Non-resident Indian buy/Sell Property in india?
It’s challenging to manage a house property, especially when you are not around. As an NRI, you might have stayed abroad for many years and are now contemplating selling your house property in India. While finding a buyer back home is an enormous task, the greater challenge is also to be on top of tax-related matters. Tax and regulations relating to the selling of house property in India are different for NRIs as compared to that of an Indian resident. An NRI can only sell residential or commercial property in India to a person residing in India or to an NRI or a PIO (Person of Indian Origin).Under general permission, an NRI can sell his agricultural land/plantation property/farm house in India only to a person who is a resident of India and is an Indian citizen. An NRI can also transfer his/her residential or commercial property to an authorised dealer or housing finance institution in India through mortgage. An NRI should not transfer by way of mortgage their residential and commercial property in India to a party abroad. For this purpose prior approval of the Reserve Bank of India (RBI) is required. Documents Required For Transaction of Sale by NRI: 1. Passport: An NRI, who want to sell a property in India, should hold a passport; not necessarily an Indian passport. This will serve as the identity proof of the person, involved in the transaction. For an Overseas Citizen of India (OCI) and a Person of Indian Origin (PIO), a passport serves the same purpose. 2. PAN Card: A number of NRIs do not pay taxes in India, as their income is taxable in the countries they stay. However, experts believe NRIs should apply for a PAN (Permanent Account Number) card here when they intend to sell a property in India, as it will be required to apply for a tax exemption certificate as after the sale of the property. PAN numbers are given out to NRIs with a foreign communication address to select countries. 3. Power of Attorney: For those NRIs who can’t be physically present in India to sell property, NRIs have an option to give Power of attorney to their friends, relatives or any authorised Estate agent and allow them (legally) to complete the transaction on your behalf. They will be signing agreements and other official documents on your behalf. The POA can be general or specific about the rights your representative can exercise. 4. Tax Returns: If an NRI has been holding a property for a certain period and earning money from it (by renting it out, etc.), the transaction becomes taxable. In that case, tax returns for the whole property-ownership period should also be kept ready. 5. Address Proof: An NRI has to give documents in support of his address in India as well as abroad. This may include a ration card, telephone or electricity bills, life insurance policy statements, etc. Same set of papers are also required as the proof of residence abroad. 6. Sale Deed: A key document needed in the process is the sale deed, also a primary proof of ownership. A legal document, sale deed is an agreement executed by an NRI while selling property in India. 7. Allotment Letter: A letter of allotment (from a society, a builder or any relevant authority) bestows the property to the said person who holds it. 8. Documents from The Society: For an apartment in a particular society, a letter from the apartment/society is needed for a go-ahead to the sales process. This document states the seller has no outstanding payments to the society. A copy of membership of the society is also important to establish ownership of the property. 9. Approved Building Plan & Occupation Certificate: While a copy of an approved building plan is necessary for selling a property, an occupation certificate is a proof that the apartment has been occupied and is also given out by the builder or the building society. 10. Encumbrance Certificate: An encumbrance certificate is necessary to assure the buyer that the land or the property has no dues to any legal authority. This is important in the case of a house, an apartment or even land.
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