RBI nod required for foreigners to inherit property in India
For obtaining the approval, an application along with documents needs to be submitted.
Q. My daughter is a non-resident Indian (NRI). What happens to the money in her foreign CURRENCY non-resident (FCNR) account when she comes back to India? How long can one enjoy the benefits of being an NRI and will the interest that she gets be taxable?
Expert Comment: The FCNR deposit of an NRI who returns to India for permanent settlement may be allowed to be continued till maturity at the contracted rate of interest, if desired, but as a resident account. Interest income from resident deposit account will be taxable in India irrespective of her tax status in India.
The other option available to a returning Indian is of opening a resident foreign CURRENCY (RFC) account with an authorized dealer and transferring the balances held in FCNR accounts. An RFC account can be maintained in the form of current, savings or term deposit accounts. An RFC account is free from all restrictions regarding utilization of foreign currency balances including any restriction on investment in any form outside India. Interest on RFC account is not liable to tax if she is either a non-resident or a resident but not ordinary resident for tax purposes. The tax status on returning to India would depend on the number of days she stays in India during the financial year. She will be a tax-resident of India if she is in India for 182 days or more or have been in India for 365 days or more in the preceding four years, she is in India for 60 days or more during the year.
If having fulfilled any of the above conditions, she has been a non-resident in India in nine out of 10 previous years or has been in India for 729 days or less in seven previous years preceding the year, she will be considered as a resident but not ordinary resident.
Q. I am an NRI residing in Singapore and my wife is a Chinese citizen. Is it possible for me to make her the nominee of the land that I own in India?
Expert Comment: For a Chinese citizen to acquire any immovable property in India, prior approval of the Reserve Bank of India (RBI) is required. As an NRI, you can nominate your wife who is a Chinese citizen for the land that you own in India. However, prior to it being transferred in her name, she would need to take approval of RBI. For obtaining the approval of RBI, she would need to file an application along with documents regarding the legal ownership of the property, nomination documents transferring the property and proof of her identity