Transfer of
Immovable Property Outside India by Resident Indians,
New Rules Notified
[RBI
Circular No. 43 dated 4th February 2016]
Sub: Foreign
Exchange Management (Acquisition and Transfer of Immovable Property outside
India) Regulations, 2015.
Attention of Authorised Dealers (ADs)
is invited to A.D.(M.A. Series)
Circular No. 11 dated May 16, 2000 in
terms of which ADs were advised of various Rules, Regulations, Notifications/
Directions issued under the Foreign Exchange Management Act, 1999 (hereinafter
referred to as the Act). On a review it is felt necessary to revise the
regulations issued under the Foreign Exchange Management (Acquisition and
Transfer of Immovable Property outside India) Regulations, 2000, as amended
from time to time. Accordingly, in consultation with the Government of India,
the said regulations have been repealed and replaced by the Foreign Exchange
Management (Acquisition and Transfer of Immovable Property outside India)
Regulations, 2015.
2. In
terms of these Regulations, acquisition or transfer of any immovable property
outside India by a person resident in India would require prior approval of
Reserve Bank except in the following cases:
a) Property
held outside India by a foreign citizen resident in India;
b) Property
acquired by a person on or before 8th July, 1947 and held with the permission
of Reserve Bank;
c) Property
acquired by way of gift or inheritance from:
i.
persons
referred to in (b) above;
ii.
persons
referred to in section 6(4) of the Act;
d) Property
purchased out of funds held in Resident Foreign Currency (RFC) account held in
accordance with the Foreign Exchange Management (Foreign Currency Accounts by a
person resident in India) Regulations, 2015;
e) Property
acquired jointly with a relative who is a person resident outside India
provided there is no outflow of funds from India;
f) Property
acquired by way of inheritance or gift from a person resident in India who
acquired such property in accordance with the foreign exchange provisions in
force at the time of such acquisition
3. An
Indian company having overseas offices may acquire immovable property outside
India for its business and residential purposes provided total remittances do
not exceed the following limits prescribed for initial and recurring expenses,
respectively:
a) 15
per cent of the average annual sales/ income or turnover of the Indian entity
during the last two financial years or up to 25 per cent of the net worth,
whichever is higher;
b) 10
per cent of the average annual sales/ income or turnover during the last two
financial years.
4. For
the purpose of these regulations, 'relative' in relation to an individual means
husband, wife, brother or sister or any lineal ascendant or descendant of that
individual.
5. The
new regulations have been notified vide Notification
No. FEMA 7(R)/2015-RB dated January 21, 2016 c.f.
G.S.R. No. 95(E) dated January 21, 2016 and shall come into force with effect
from January 21, 2016. The Master
Direction No. 12 of 2015-16 (Acquisition
and Transfer of Immovable Property under Foreign Exchange Management Act, 1999)
has been updated accordingly to incorporate the above changes.
6. AD
Category- I banks may bring the contents of the circular to the notice of their
constituents concerned.
7. The
directions contained in this circular have been issued under Sections 10(4) and
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions/ approvals, if any, required under any other law.