A Non Resident Indian (NRI) is an Indian Citizen who resides in India for less than one hundred & eighty two days during the course of the preceding financial year, or who has gone out of India or who stays outside India for the purpose of employment, or carrying on a business there or for any other purpose indicating his intention to stay outside India for an uncertain period.

A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if, he/ she at any time held an Indian passport or he/ she or either of his/ her parents or either any of his/ her grandparents was a citizen of India or he/ she is a spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen.

NRI or a PIO can acquire by way of purchase any immovable property (other than agricultural land/ plantation property / farm house) in India. As per RBI guidelines, NRIs/OCIs are governed by provisions of FEMA 1999 and do not require prior approval of the RBI for acquisition and transfer of immovable property in India, other than agricultural land/farm house/plantation property.

Yes. They can acquire any immovable property (other than agricultural land/ plantation property / farm house) in India by way of gift from a person resident in India or an NRI or a PIO. A PIO may acquire any immovable property in India by way of inheritance from a person resident in India or a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force or FEMA regulations, at the time of acquisition of the property. No approval is required from any agency.

A PIO can make payment for acquisition of immovable property in India (other than agricultural land / farm house / plantation property) by way of purchase out of funds received by inward remittance through normal banking channels or by debit to his NRE / FCNR(B) / NRO account.

At present, NRIs and OCIs are governed by provisions of Foreign Exchange Management Act (FEMA) 1999 and do not require prior approval of RBI for acquisition and transfer of immovable property in India, other than agricultural land, farm house, plantation property," RBI said in a statement.

It depends whether the immovable property has been acquired by way of Purchase or by inheritance.

In case of Property was acquired by way of Purchase

They or their successors shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section. In the event of sale of immovable property other than agricultural land / farm house / plantation property in India by a person resident outside India who is a citizen of India or a person of Indian origin, the Authorised Dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely:

(i) the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations;

(ii) the amount to be repatriated does not exceed:-
•    the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels, or
•    the amount paid out of funds held in Foreign Currency Non-Resident Account, or
•    the foreign currency equivalent (as on the date of payment) of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; and

(iii) in the case of residential property, the repatriation of sale proceeds is restricted to maximum two such properties.

In case of Property was acquired by way of Inheritance

A Non-Resident Indian (NRI) / Person of Indian Origin (PIO) may remit an amount, not exceeding US $ 1,000,000 (US Dollar One million only) per financial year out of the balances held in NRO accounts / sale proceeds of assets by way of purchase / the assets in India acquired by him by way of inheritance / legacy/ out of Rupee funds. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 (US Dollar One million only) in any financial year requires prior permission of the
 

NRIs have to pay tax on the Capital Gains. The tax that is payable on the gains depends on whether it’s a short term or a long term capital gains. When a property is sold, after a period of 2 years from the date it was owned – there is a long term capital gain. In case it held for 2 years or less.

Tax implications for NRIs are also applicable in the case of inheritance. In case the property has been inherited, remember to consider the date of purchase of the original owner for calculating whether it’s a long term or a short term capital gain.

TDS to be deducted on entire Sales Consideration & not on the Capital Gains Portion only (Whether Long Term/Short Term). But at the time of filing of Income Tax Return, Tax is computed on the basis of Cost of Acquisition, Cost Inflation Index (CII), cost of Improvement & Exemptions available. Hence most of the times, Income Tax Refund is given to assessee after filing Income Tax Return in India on the basis of computation of tax in ITR. Tax Payable @20% Plus Surcharge (applicable rates given above in TDS Chart) Plus Cess (@4%).

 

Yes. They can send money abroad from NRO Account after certifying that you have paid taxes on the funds lying in the NRO Account. You can either send the money to your NRE Account and repatriate the money through the NRE Account or do it directly from your NRO Account.