How NRIs can sell inherited property in India
The first thing you must do is to transfer the title of the property in your name.
Many non-resident Indians (NRIs) inherit property in India. But few know how to get it transferred in their names and how to sell it, if they desire so. Selling inherited property can be quite challenging, especially if you have left India many years ago and are not familiar with the procedure.
We outline the entire process, beginning from the time you inherit the property. We will look at what documents you need, how you can arrive at the sale value and how to complete the sale transaction.
Transferring in your name
When you inherit property, the first thing you must do is to transfer the title of the property in your name. One can do this by a process called “mutation of revenue records”. You would need either a copy of the will; in the absence of a will, you will need a succession certificate issued by the local court.
Once you have transferred the title of the inherited property, you need to put together all the papers that are needed in order to sell the property. Here’s a list:
Original purchase agreement: Title document or agreement of property.
SHARE certificate in co-operative society: A co-operative housing society normally issues a share certificate to each member. If the certificate is misplaced, you can apply for a duplicate certificate from the society. The process is not at all complicated and it takes only a few weeks to get the duplicate certificate.
Society’s no-objection certificate: This confirms that members of the society do not have any objections to the sale of the apartment. This also confirms that the seller has no default/outstanding payments to be made to the society as of date.
Copy of occupation certificate: This is issued by the concerned authority such as a municipal corporation. You can get this document from the co-operative housing society or the developer.
Title certificate from a law firm: In case the originals have been misplaced, you must approach a law firm, which would help you with a certificate to prove that you are indeed the rightful owner of the property.
Permanent Account Number (PAN) card: If you don’t have a PAN, you can apply for it online through NSDL’s website.
Identifying sales procedure
First, you need to decide whether you want to do it yourself or use the services of a professional company or firm. The real estate space in India is unregulated and property rates vary vastly even within a particular area. There is no licence for BROKERS and the entire process can be cumbersome if one is not familiar with the market. Many times, arriving at the right value of property becomes a tricky issue. This is where professional agency comes handy. These firms usually charge a percentage of the sales consideration as fees and provide end-to-end solutions, including identifying a buyer, conducting due diligence, handling legal and tax issues and so on.
For the sale process to be successful, one needs to understand and go through certain specific steps. You have to understand the structure. In India, a part of the value of a property is unaccoutned during transactions. NRIs usually do not want to deal with such scenarios and this is where professional consultants do justice in helping attain the right profile of buyers.
Second, you have to deal with a power of attorney (PoA). You should not give complete power of attorney for all property related matters to someone in India; admit PoA is the solution. You won’t need to travel to India for registration of property in favour of the buyer.
Lastly, there is the issue of taxation. When you sell property in India, the buyer has to ensure tax is deducted at source. You don’t need to bother how this aspect will be managed. You can file income-tax returns and seek refund of tax for excess deducted by the buyer after taking into consideration indexation benefit that is provided to you, the seller. If you sell property that is held for less than three years, taxation is at the highest taxable rate in India.