RBI Allows Residents for Joint Holding of Property Outside India !

Reserve Bank of India has modified the Foreign Exchange Management (Acquisition and Transfer of Immovable Property outside India) Regulations, 2015 vide notification dated 21.1.2106 in Gazette of India . Now spouse who is resident in India can be joint holder of property bought by his/her spouse resident outside India . Similarly, company can also acquire the property outside India if certain conditions are fulfilled. Therefore, with the new regulation effective now, following persons are allowed to acquire the immovable property outside India without approval of RBI :

(a) by way of gift or inheritance from a person who acquired property in following circumstances

(i) out of foreign exchanged when he was outside India(section 6(4) of FEMA)

(ii) Got property as gift & inheritance from a person who was not citizen of India or 

(iii) Got property as gift & inheritance from a person who acquired  by a person  resident  in India  on or before  8th July 1947 and continued  to be held by him with the permission of the Reserve Bank.

(b) by way of purchase out of foreign exchange held in Resident Foreign Currency (RFC) account maintained in accordance with the Foreign Exchange Management (Foreign Currency accounts by a person resident in India) Regulations, 2015;

(c) jointly with a relative who is a person resident outside India (Non Resident Indian ), provided there is no outflow of funds from India;

(d) A person resident in India may acquire immovable property outside India, by way of inheritance or gift from a person resident in India who has acquired such property in accordance with the foreign exchange provisions in force at the time of such acquisition.

(e) A company incorporated in India having overseas offices, may acquire immovable property outside India for its business and for residential purposes of its staff, in accordance with the direction issued by the Reserve Bank of India from time to time.

(f) By taking approval from Reserve Bank of India

RBI’s Notification on Foreign Exchange Management (Acquisition and Transfer of Immovable Property outside India) Regulations, 2015

RESERVE BANK OF INDIA (Foreign Exchange Department) CENTRAL OFFICE NOTIFICATION
Mumbai , the 21st January 21, 2016

No. FEMA 7(R)/2015—RB

Foreign Exchange Management (Acquisition and Transfer of Immovable Property outside India) Regulations, 2015

G.S.R. 95(E).—In exercise of the powers conferred by clause (h) of sub-section (3) of Section 6, sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), and in supersession of Notification No. FEMA 7/2000-RB dated May 3, 2000, as amended from time to time, the Reserve Bank hereby makes the following regulations relating to acquisition and transfer of immovable property outside India, namely :-

1. Short title and commencement:-

(i) These regulations may be called the Foreign Exchange Management (Acquisition and transfer of immovable property outside India) Regulations, 2015.

( ii) They shall come into force from the date of their publication in the Official Gazette.

2. Definitions:-

In these regulations, unless the context requires otherwise, –

( i) ‘Act’ means the Foreign Exchange Management Act, 1999 (42 of 1999);

(ii) The words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act.

3. Restriction on acquisition or transfer of immovable property outside India:-

Save as otherwise provided in the Act or in these regulations, no person resident in India shall acquire or transfer any immovable property situated outside India without general or special permission of the Reserve Bank.

4. Exemptions:-

Nothing contained in these regulations shall apply to the property –

(a) held by a person resident in India who is a national of a foreign state;
(b) acquired by a person resident in India on or before 8th July 1947 and continued to be held by him with the permission of the Reserve Bank.

5. Acquisition and Transfer of Immovable Property outside India:-

(1) A person resident in India may acquire immovable property outside India, –

(a) by way of gift or inheritance from a person referred to in sub-section (4) of Section 6 of the Act, or referred to in clause (b) of regulation 4;

(b) by way of purchase out of foreign exchange held in Resident Foreign Currency (RFC) account maintained in accordance with the Foreign Exchange Management (Foreign Currency accounts by a person resident in India) Regulations, 2015;

(c) jointly with a relative who is a person resident outside India, provided there is no outflow of funds from India;

(2) A person resident in India may acquire immovable property outside India, by way of inheritance or gift from a person resident in India who has acquired such property in accordance with the foreign exchange provisions in force at the time of such acquisition.

(3) A company incorporated in India having overseas offices, may acquire immovable property outside India for its business and for residential purposes of its staff, in accordance with the direction issued by the Reserve Bank of India from time to time.

Explanation:

For the purposes of these regulations, ‘relative’ in relation to an individual means husband, wife, brother or sister or any lineal ascendant or descendant of that individual.

[F. No. 1/31/EM/2016] B. P. KANUNGO, Principal Chief General Manager