An NRI cannot buy agricultural land in the name of another person unless that person is a spouse, brother, sister, or lineal ascendant or descendant. It will be considered a Benami transaction which is illegal. (please consult a good lawyer as our knowledge is limited in this) An NRI gives money to a friend or a son-in-law.
Can an NRI buy agricultural land in India?
Under Fema and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, NRIs are not permitted to purchase an agricultural land or plantation property or farmhouse in India I am an Indian resident and own some agricultural land. I included my son’s name in the deed for my agricultural land.
Do NRIs pay tax on inheritance of agricultural 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.
Can NRIs and OCIS sell agricultural land?
NRIs and OCIs can sell agricultural land, plantation property, or a farmhouse only to a Resident Indian. For the lands purchased with permissions from RBI, special approvals are required to complete sale transactions.
Can a US citizen buy agricultural land in India?
However, one may seek special permission from the Reserve Bank of India, which may be granted only after the consideration of various factors. Therefore, to answer your query, your son, now being a US citizen, may not be able to acquire or purchase agricultural land in India under the automatic route.
What is NRI money?
An NRI gives money to a friend or a son-in-law. This person uses the money to buy land, and the gains from that land are passed to the NRI. This is a Benami transaction, and the persons involved in it are punishable by law. Land transactions can be tricky. The rules are different in different states. It might be difficult to have updated …
Is agricultural land a capital asset?
Rural agricultural land is not a capital asset hence capital gains tax is not applicable. However, if the agricultural land is defined as urban agricultural land, it is chargeable under capital gains tax.
Can an OCI give land to another NRI?
(but consider Benami act) “But an NRI or OCI cannot gift such property to another NRI.
Can an NRI inherit land?
An NRI or OCI can acquire agricultural land, plantation property, or farmhouse through inheritance from a person residing in India. An NRI can also inherit property from another NRI. But this is subject to certain regulations like RBI’s approval.
Can NRIs buy land in India?
Can NRI Purchase Agricultural Land In India. Under the Foreign Exchange Management Act and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, NRIs and OCIs are not allowed by law to purchase land or plantation property, or farmhouses in India unless they acquire special permission from RBI.
Can an NRI buy land in the name of another person?
An NRI cannot buy agricultural land in the name of another person unless that person is a spouse, brother, sister, or lineal ascendant or descendant. It will be considered a Benami transaction which is illegal. (please consult a good lawyer as our knowledge is limited in this)
Is land transaction difficult?
Land transactions can be tricky. The rules are different in different states. It might be difficult to have updated information as an NRI or OCI who is not always present in India. You have to research and understand factors like the legitimacy of land, compliances to be followed, etc. at the time of a property purchase and understand …
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 farmland?
NRIs can inherit agricultural land, farmland, farmhouses, and/or plantations in India from a resident of India only. If NRIs inherit agricultural land from a non-resident of India, the approval of the RBI is necessary. Also, the owner of the agricultural land should have been a citizen of India while buying or inheriting the property.
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.
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 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 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 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 …