Can I inherit agricultural land in India?
However, they may acquire such agricultural land through inheritance from a person residing in India. Accordingly, you may inherit an agricultural land. However, an agricultural land in India can only be sold to a person who is a resident in India.
Can a non-resident Indian inherit property in India?
A non-resident Indian (NRI) or person of Indian origin (PIO), can inherit any immovable property in India, whether it is residential or commercial. They can even inherit agricultural land or a farmhouse, which they are otherwise not entitled to acquire by way of purchase. An NRI can inherit the property from anyone including his relatives.
Is inherited property taxable in India?
Under the Income-tax law, the value of any assets received under a Will or by way of inheritance is not taxable in India. However, the income arising from transfer or use of inherited property in India will be taxable in India.
Can NRIs transfer ownership of agricultural land in India?
NRIs are allowed to transfer the ownership of the agricultural land by gift or by sale, but only to a permanent resident of India. In the case of the sale of the inherited agricultural land, there will be tax implications, as well.
What type of property can an NRI inherit?
A non-resident Indian (NRI) or person of Indian origin (PIO), can inherit any immovable property in India, whether it is residential or commercial. They can even inherit agricultural land or a farmhouse, which they are otherwise not entitled to acquire by way of purchase.
How much can an NRI repatriate?
An NRI can repatriate the sale proceeds up to one million dollars every year, without any approval from the RBI, provided taxes in India have been paid for the sale of such property. However, special RBI approval will be needed, if the amount to be remitted exceeds one million.
What is FEMA in India?
Foreign Exchange Management Act (FEMA) is an Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Can an NRI own property in India?
However, if the NRI owned or inherited the property, while he was a resident of India, he can deal with the property the way he wants, by means of sale, rent, transfer or gift. Foreign nationals of non-Indian origin, resident outside India, are not permitted to acquire any immovable property in India, unless such property is acquired by way …
Can a PIO retain ownership of property?
The NRI or PIO can continue to retain the ownership of the property, or dispose it. Even if the NRI decides to dispose of the property, there are certain tax implications for the period during which he retains the ownership of the property. As wealth tax has been abolished in India, the NRI does not have any wealth tax implications, …
Can a PIO inherit property from another NRI?
The NRI or PIO can inherit property in India even from another NRI or PIO, subject to certain conditions. The RBI’s permission is necessary, if the inheritance results in favour of a citizen of a foreign state, who is a resident outside India.
Can a NRI inherit property?
It is important to note that the person from whom the NRI inherits the property, should have acquired the property being bequeathed, in accordance with the provisions of law relating to foreign exchange, prevalent at the relevant time. So, if the property in question was acquired without obtaining permission from the Reserve Bank of India, when the permission was required to be obtained, such property cannot be inherited by the NRI or PIO, without specific permission of the RBI.
Can NRIs buy property in India?
The Reserve Bank of India (RBI) has given general permission to NRIs to acquire property in India. However, it does not mean that NRIs can buy any type of property. NRIs can only purchase commercial and residential properties in India.
Can NRIs transfer land to a permanent resident?
NRIs are allowed to transfer the ownership of the agricultural land by gift or by sale, but only to a permanent resident of India. In the case of the sale of the inherited agricultural land, there will be tax implications, as well.
Can NRIs inherit land?
NRIs can inherit agricultural land, farmland, farmhouses, and/or plantations in India from a resident of India only.
Can NRIs acquire land in India?
The answer to this, too, is no. NRIs cannot acquire agricultural land in India even by gift. While other types of properties can be acquired by the way of gift, this is not so for agricultural land.
Can inherited land be converted to commercial land?
Can the inherited agricultural land be converted to commercial or residential land? NRIs can get the conversion done to commercial or residential land after inheriting agricultural land in India. However, converting agricultural land to commercial or residential land is, in itself, a lengthy and time-consuming process.
Can NRIs buy farmland?
Regarding agricultural land, NRIs are NOT allowed to purchase agricultural land, farmland, farmhouses, or plantations in India.
Do NRIs have to pay taxes on land?
While NRIs don’t have to pay any tax on the inheritance of agricultural land, it will need to be paid on the sale. Capital gains tax is levied on the sale proceeds in such transactions. The earnings from such sales can only be remitted abroad after the payment of the due taxes.
How much can I remit from an NRO account?
The proceeds from the property needs to be deposited in the NRO Account of the NRI. The maximum amount that can be remitted from an NRO Account is US$ 1 million. The process of repatriation is the same done for outward remittances involving the forms 15CA and 15CB. In addition to these, other documents like will, legal heir certificate, death certificate (in case of inheritance), and sale agreement (in case of sale)
Is there capital gains tax on agricultural land?
The taxation on sale of agricultural land is different for rural and urban areas. Rural agricultural lands are not capital assets therefore no capital gains tax is applicable whereas in case of urban agricultural land capital gains tax is applicable.
Can an NRI give a farmland?
An NRI can only give such properties to a Resident India as gifts. In easy terms:
Can an NRI inherit land?
Inheritance of Agricultural Land for NRI. NRIs as well as OCIs can’ t directly buy agricultural land, plantation property, or a farmhouse in India but they can inherit it from a Resident Indian. An NRI can even inherit such properties from other NRIs subject to certain regulations such as special permissions from RBI.
Can an NRI gift land to an Indian?
NRI to Resident Indian gift of property. Yes; Can be gifted. NRI to NRI gift of property. No; Can’t be gifted. Gift of Agricultural Land to NRI and vice versa. Note: Property in the above table refers to agricultural land, plantation property and farmhouses. Also, consider the Benami Act while gifting properties.
Can an NRI buy a house in the name of another person?
An NRI can’t buy a property in the name of another person unless that person is a spouse, brother, sister or lineal ascendant or descendant. Buying a property in the name of someone else is considered illegal under the Benami Act.
Can NRIs give money outside India?
NRIs can sell an inherited property or gift the same and remit the money outside India. However, NRIs can give an inherited property as a gift only to an Indian resident or to another NRI/ Persons of Indian Origin (PIO) (apart from agricultural land).
How much LTCG can be reinvested in two houses in India?
Effective FY20, LTCG can be reinvested in two residential houses in India if it doesn’t exceed ₹ 2 crore. The option to reinvest LTCG in two residential houses in India is available only once in a lifetime.
Can NRIs own land in India?
Under the exchange control law, NRIs cannot own an agricultural land in India. However, they may acquire such agricultural land through inheritance from a person residing in India. Accordingly, you may inherit an agricultural land. However, an agricultural land in India can only be sold to a person who is a resident in India.
Is LTCG tax exempt?
LTCG can be claimed as tax-exempt if it is reinvested in India in specified bonds or one residential house in India (to be either purchased within one year before or two years after or constructed within three years of the transfer of the property).
Is immovable property taxable in India?
If you intend to sell the immovable property, it will be taxable in India in the year of sale. Any immovable property held for a period of more than 24 months is classified as a long-term capital asset (LTCA). For inherited property, the holding period will be calculated from the date of acquisition by the original owner …
Is rental income taxable in India?
Also, what will be tax implication of rental income received? —Ravi Singh. Under the Income-tax law, the value of any assets received under a Will or by way of inheritance is not taxable in India. However, the income arising from transfer or use of inherited property in India will be taxable in India. If you intend to let out the property, rental …
Is LTCG taxable?
Long-term capital gain (LTCG) is taxable at 20% (plus applicable surcharge and health and education cess). Short-term capital gains is taxable at applicable slab rates (plus applicable surcharge and health and education cess) without any indexation for cost of acquisition or cost of improvement. LTCG can be claimed as tax-exempt if it is reinvested …
Who should have acquired the same property?
However, the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange law in force or FEMA regulations, applicable at the time of acquisition of the property.
Can a non-resident Indian inherit property in India?
Yes, a Non Resident Indian (NRI), Person of Indian origin (PIO) or even a foreign national of non-Indian origin can inherit and hold property in India. This includes residential and commercial property, agricultural, plantation and farm land.
Is a house inherited in India tax exempt?
Further, the house property inherited or purchased in India may be considered as exempt under Section 5 of the Wealth Tax Act provided that’s the only house he owns in India.
Can a PIO sell to another PIO?
In case a PIO wants to sell to another PIO, he will need to get prior approval from RBI. An NRI holding agricultural land, plantation land or farm house may sell these properties only to a person resident in India and who is a citizen of India.
Is there income tax on inherited property?
No income tax is payable at the time of inheriting the property.
Do you have to pay wealth tax on a residential property?
If you own only one residential house, you do not have to pay wealth tax. So after inheritance, if this is the only property that you own, you do not have to pay wealth tax on it. The question arises as to whether this includes global properties. For instance, if an NRI owns a property in the US and inherits one in India, …
Can an NRI sell inherited property?
An NRI can sell inherited property to a person resident in India, an NRI or a PIO. A PIO can sell property in India to a person resident in India or an NRI. In case a PIO wants to sell to another PIO, he will need to get prior approval from RBI.
Can Non Residents (NRIs, OCIs, PIOs, Other Foreign Citizens) Buy or Sell Agricultrue Property In India?
Lot of Non-residents (NRIs, Foreign Citizens) wish to buy an agriculture land, plantation propery or farm house in India. However, this is important to understand that as per Foreign Exchange Management Act 1999 (FEMA) there are restrictions on acquiring a property in India which is of the nature of Agriculture, Plantation or Farm House.
What Are The Agriculture Type Properties Restricted Under FEMA?
Foreign Exchange Management (Non-Debt) Instrument Rules, 2019, provide restrictions in relation to following kind of agriculture properties:
Whether Migrating NRIs Can Hold Agriculture Property In India?
Yes. Indians, leaving abroad for employment or otherwise, can hold the Agriculture property in India if that property was acquired by them when they were Resident in India. They can also sell or transfer this property to a person who is resident in India.
What If Non-Resident Acquire An Agriculture Property By Way of Inheritance?
Non-residents, who are NRIs or OCI Card holders, can acquire an Agriculture property in India by way of inheritance. This inheritance can be done from a person who is resident in India.
Can Non-resident Transfer The Agriculture Property?
A non-resident, who is NRI or OCI card holder, can transfer an Agriculture property in India. However, the NRI or OCI need to ensure that transfer is made to a person who is resident of India. Agriculture property cannot be transferred to a non-resident without prior permission of Reserve Bank of India (RBI).
Whether Gift Is Permissible For NRIs In Relation To Agriculture Property?
NRIs, OCIs, Other Non-residents are not allowed take gift of an Agriculture/Plantation/Farmhouse property, which is situated in India. However, NRIs/OCIs can gift an agriculture property to a person resident in India (if the property was acquired by them as per applicable provisions of foreign exchange laws).
Whether There Are Specific Blanket Restrictions In Relation To Any Specific Country?
Yes. Restriction is there for a person who is Citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong or Macau or Democratic People’s Republic of Korea (DPRK).
How can NRIs transfer their property?
NRIs can transfer the property to other NRIs by making a Will during their lifetime. Upon the demise of the NRI, the relevant shares in the properties are distributed amongst the legal heirs according to the Will.
What is the Indian Succession Act?
The Indian Succession Act seeks to consolidate all Indian Laws relating to succession. It applies to succession of property whether there is a will or not. Further Inheritance laws apply depending on the religion, such as Hindu, Muslims, Jains, Sikhs and Buddhists.
What happens if an NRI dies without a will?
without a Will, then the inheritance process may become more complicated. In this case, the property passes by inheritance as per the personal law of the deceased. This procedure requires several documents including the death certificate of the relative, birth certificate, purchase deed, registration documents, bank documents, etc. in order to prove a rightful claim to the property in question.
Types of Properties That Can Be Inherited in India, by NRIs
Tax Incidence at The Time of Inheritance of The Property
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As Estate Duty was abolished long back, there is no tax incidence at the time of inheritance. So, neither the representative of the deceased, nor the inheritor, have to pay any tax at the incidence of inheritance. In case the same property is transferred by the person during his lifetime by way of a gift and the value of the property exceeds Rs 50,000, the recipient has to include the market va…
Taxation on Continued Ownership of Inherited Property
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The NRI or PIO can continue to retain the ownership of the property, or dispose it. Even if the NRI decides to dispose of the property, there are certain tax implications for the period during which he retains the ownership of the property. As wealth tax has been abolished in India, the NRI does not have any wealth tax implications, for being the owner of the immovable property. See also: L…
Taxation Incidence at The Time of Sale Or Gift of The Property
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An NRI can either gift away the inherited property or sell the same and remit the money outside India. There are certain restrictions on gifting of the property by an NRI. The NRI can gift the inherited property, only to a person who is resident in India or an NRI or PIO. He cannot gift the property to a person who is neither of these. In case of gift to a non-relative, the recipient will ha…
Capital Gains on Property Inherited by An Nri
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In case the property is sold by the NRI, the person who buys the property will have to deduct income tax under Section 195 of the Income Tax Act, on the taxable amount of capital gains at the rates applicable. The NRI has the options to either pay the tax on such long-term capital gains at 20 per cent, or avail of the tax benefits under Section 54 and 54F, by investing in a new reside…
Repatriation of The Sale Proceeds of The Inherited Property
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An NRI can repatriate the sale proceeds up to one million dollars every year, without any approval from the RBI, provided taxes in India have been paid for the sale of such property. However, special RBI approval will be needed, if the amount to be remitted exceeds one million. (The author is a tax and investment expert, with 35 years’ experience)