Permission required from income tax or rbi by a nri for sale of property situated in india
sureshkumargoyal
(Querist) 14 April 2015
This query is : Resolved
A NRI now living in USA owning a plot of land in Kolkata and now he wants to sell the plot and I am the prospective buyer of the plot. Is any permission from any IT or RBI authorities required by him or by us before registration of the plot.
What will be our liabilities regarding purchase of the land from a NRI.
Jayaraj Poojari
(Expert) 15 April 2015
An NRI is allowed to transfer property owned in India to an Indian Resident. It is an allowable transaction. The sale proceeds has to take place only through an "Authorized person" (bank dealing with Foreign exchange). Since it is a Capital Account transaction, the seller is required to furnish to RBI a declaration relevant to the transaction.
From the buyers side, you have to follow the same formalities similar to any other property registration. Further, you need to note that any immovable property transaction exceeding Rs. 20,000/- should either be through Cheque or electronic transfer as per the IT Act. The Seller will be subject to Tax as per the provisions of the Income Tax Act.
Vineet
(Expert) 05 May 2015
There is no issues in so far as RBI is concerned, but you will have to deduct withholding tax on the capital gain arising to NRI u/s 195 of the Act. Please ask NRI to approach tax office and obtain a certificate for tax to be deducted on the consideration.
