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[FAQ] Can an NRI sell inherited property?
Can an NRI sell inherited property?

In case the property (irrespective of its nature) was acquired or inherited by you (the overseas Indian or NRI) when you were a resident of India, you can sell or build on the property without the approval of the Reserve Bank of India. However, if you wish to sell it, you must be a resident […]
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Let me just share with you whatever information I have regarding this topic, this can also help others who are in a similar dillema but I cannot gurantee this is an answer to all your questions.

The sale and purchase of property by NRIs is regulated under the FEMA (Foreign Exchange Management Act) 1999. The necessary regulatory framework and instructions are issued by the Reserve Bank of India. The FEMA also empowers the RBI to frame necessary regulations for the sale and purchase of property by NRIs. Though it might not be feasible to cover the each and every aspect in this post. I will try to cover all the important points that an NRI should know. 

Rules for repatriation of sale proceeds of property sold in India.

If the property was purchased while you were a resident of India, then the sale proceeds must be credited to the NRO account. You can repatriate up to USD 1 million per calendar year from your NRO Account (including all other capital transactions), provided you have paid all taxes due.
Now, if the property was purchased while you were a non-resident, you can repatriate the proceeds outside India provided that you fulfill certain conditions:
1. You should have purchased the property in accordance with the foreign exchange laws prevalent at the time you bought the property
2. The amount to be repatriated will follow these limits:
a. If you purchased by remitting foreign exchange to India through normal banking channels, then the repatriation cannot exceed the amount that you remitted.
b. If you purchased using funds in the Foreign Currency Non Resident (FCNR) Account, then the repatriation cannot exceed the amount paid through this account.
c. If you purchased using funds lying in your Non Resident External (NRE) Account, then the repatriation cannot exceed the foreign exchange equivalent, as on date of purchase, of the amount paid through NRE Account.
d. If you purchased a property by taking a home loan, then repatriation cannot exceed the amount of loan repayment that has been done using foreign inward remittances or debit to NRE/FCNR Accounts.
e. If you purchased the property using balance in your NRO account, then the sale proceeds must be credited to your NRO account and you can repatriate to the extent of USD 1 million (including all other capital account transactions).

Documents NRIs Need While Selling Property

2.PAN Card
3.Tax Returns
4.Address Proof - An NRI has to give documents in support of his address in India as well as abroad. 
5.Sale Deed - A legal document, sale deed is an agreement executed by an NRI while purchasing an under-construction property in India.
6.Allotment Letter
7.Documents From The Society
8.Approved Building Plan & Occupation Certificate
9.Encumbrance Certificate - An encumbrance certificate is necessary to assure the buyer that the land or the property has no dues to any legal authority. This is important in the case of a house, an apartment or even land.

This is some information I procured online : Steps for NRIs to sell property in India.

For expats, selling a property in India from abroad is a challenging process, especially if they left the country years back. There are rules for an NRI in selling his/her inherited property in India and it requires legal help. Here is the step wise procedure on how NRIs can sell their inherited land or property legally without any litigation:

The process is quite similar for residential Indians and non residential Indians except for the latter have tax implications and repatriation policies.

1.Title Transfer for Inherited Property
If the property is inherited, then the title should be changed to the seller’s name by the process of mutation of revenue records. This transfer requires a will or a succession certificate. If one cannot procure a copy of the will, then the local court can issue a succession certificate. With this certificate, one can apply for a title change in the mutation of revenue records office.

This procedure is time consuming and it is advisable to have them changed earlier.

2. Checklist of Documents Required for Selling
It is necessary to procure all the documents required for selling the property in India. Some of the documents include:

The title deed or mother deed of the property
No objection certificate to show the clearance of litigation and debts.
Occupation certificate issued by the municipal corporation
Plan approval/sanction certificate
Cooperative share certificate if the property is a part of a society building
Lawyer certificate, if any of the original documents were lost
Apart from these documents, the seller should have a PAN card number to sell properties that involve big amount transfers. The NRI can apply PAN to sell the properties or he/she can submit form 60 at the registrar office for the same.

3. Finding a Right Brokerage Firm
If there are no close friends or relatives to trust with the transaction, it is wise to consult a brokerage firm to assist in the selling process. However, if the seller has realty market sense and people to support then he/she can go ahead with the selling process on their own.

The brokerage firm can help you in suggesting the market situation, finding suitable buyers, price trends and risks involved. They can assist in fixing the selling price, applying for PAN and attorney service to obtain legal documents and tax implications. Although they provide end-to-end solutions, brokerage in India has no legal license and it could be troublesome if the brokerage fee is not fixed properly. It is advisable to find the right brokerage firm and fix the fee before initiating the selling process.

4.Sales Registration
It is essential to grant the power of attorney for the transaction to a PoA holder. There is no need to grant a complete power of attorney; instead the seller can give ‘Admit PoA’ rights to the PoA holder who will merely represent the owner in the registrar office. According to this, the seller should duly sign all the documents and the PoA holder will represent him in the sale registration.

However, issuing the PoA process differs from time to time and each firm will have a different process. Once the registration is complete, the seller should also concentrate on the tax implications

5.Focus on Tax and Repatriation Issues
The NRIs have long term capital gains if the property was sold after 3+ years of purchase, the tax for which comes to 20.6%. Further, the basic exemption of Rs. 2 lakh is not applicable for NRIs. There are other tax exemptions available for the NRIs while selling the property.

The sale money can be repatriated through official dealers but it should not be more than US $1 million per year. If the property is inherited from one NRI to another NRI, then you need to get a special permission from the Reserve Bank of India. However, the brokerage firms will guide you through this process.


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