Foreign direct investment
LAWYER ASSOCIATES
(Querist) 31 December 2017
This query is : Resolved
An indian origin australian citizen send remittence to his mother in India from australia via banking channels. Mother purchased agriculture land through that money. Officer says that is FDI in buying agriulture land.
Question:- Whether FDI is allowed in buying agriculture land. Is there is contradiction of law. Please suggest with relevant provisions of law (FDI)?
Vijay Raj Mahajan
(Expert) 31 December 2017
FDI by foreigner for buying agricultural land in India is prohibited but it's open for Indian citizen to buy it. Indian lady can buy agricultural land in India, although she has been financed by her son who may be a foreigner sending her foreign currency. Why the Indian lady declared she's buying agricultural land from foreign funding, she should have purchased the agricultural land from her bank account in normal manner.
Another way out is buying non-agricultural land first by the Indian lady, sell it after sometime and then purchase agricultural land if that is the ultimate desire.
Vijay Raj Mahajan
(Expert) 31 December 2017
FDI by foreigner for buying agricultural land in India is prohibited but it's open for Indian citizen to buy it. Indian lady can buy agricultural land in India, although she has been financed by her son who may be a foreigner sending her foreign currency. Why the Indian lady declared she's buying agricultural land from foreign funding, she should have purchased the agricultural land from her bank account in normal manner.
Another way out is buying non-agricultural land first by the Indian lady, sell it after sometime and then purchase agricultural land if that is the ultimate desire.
Dr J C Vashista
(Expert) 01 January 2018
Anonymous author should disclose his identity, you are not "lawyer associate"
There is restriction on purchase of land from the funds remitted by son working abroad.
LAWYER ASSOCIATES
(Querist) 01 January 2018
Dr. J C Vashista, Pls throw light on the provision which restrict an Indian mother to buy agriculture land with the remitance from his son in abroad.
Vijay Raj Mahajan
(Expert) 01 January 2018
FEMA(Permissible Capital Account Transactions) Regulations, 2000 Rule 4(b) Prohibits, person resident outside India to make investment in India, in any form in agricultural or plantation activities. Schedule II further provides Investment in India by a person resident outside India, that is to say, deposits between a person resident in India and a person resident outside India. Foreign currency account in India of a person resident outside India.
What is important here is that when a simple resident of India goes for purchasing any agricultural land no one other than, maybe, Income Tax department will question her, but once she declares that she's buying agricultural land from her son's fund who is not resident of India the prohibition to buy the agricultural land will come in play. This what I told in my reply above, why the lady declared about the finances coming from Australia through her son resident in that country, she could have simply gone and purchased the land without disclosing this fact.
R.Ramachandran
(Expert) 01 January 2018
@LAWYER ASSOCIATES: Pl. indicate the mother purchased the agricultural land in whose name?
Ms.Usha Kapoor
(Expert) 02 January 2018
c.An NRI can through his registered gift deed transfer his money to his mother or brother or of the relatives specified in the Income Tax Act 1961 to buy Agricultural land or farm land or plantation property. i His FDI can be invested by them in their names or his name by seeking permission from RBI in purchasing Agricultural lands etc. IN other words —Arundhati Nai
There is no income tax implication on purchase of immovable property. However, under the exchange control law, an NRI is permitted to purchase immovable property in India other than agricultural land or plantation property or farm house. However, possibility of seeking a specific approval from the Reserve Bank of India (RBI) to purchase agricultural land may be explored. Your mother who stays in India and is a resident in India may buy the agricultural land in her name from her own funds or from the funds gifted by you.
LAWYER ASSOCIATES
(Querist) 02 January 2018
Appreciable effort of Mr. Vijay Raj Mahajan Ji, According to exact interpretation of provisions, NRI son does not invested money, He has gifted money to his mother, Than mother invested money in buying agriculture land in her name. Mother is taking care of land and controling the land.
According to my understanding and language of provisions, we are not at fault because NRI has not purchased land in his name.
What is your expert and exact opinion?
Ms.Usha Kapoor
(Expert) 02 January 2018
With RBI permission NRI can purchase even Agricultural land, Plantation of land etc?
Ms.Usha Kapoor
(Expert) 02 January 2018
With the permission of RBI even An NRI can purchase Agricultural land and plantation or farm louse etc.in his name.Explore the possibility of seeking permission from RBI and buy Agricultural land etc in your name in India.
Vijay Raj Mahajan
(Expert) 02 January 2018
Yes there is no contravention of FEMA law and rules under it.
R.Ramachandran
(Expert) 02 January 2018
In the fact situation of the instant case, I entirely agree with the views of Mr. Vijay Raj Mahajan.
