Namitha Shah (Student) 01 December 2010

Can one NRI sell land in India to another NRI?

I give below the facts relating to one of my client for seeking your guidance.

1. Mrs. A an Indian original, citizen of Canada, residing at Canada is having piece of land near Baroda. The land is acquired through inheritance from her father. Herein after called owner of land or seller of land.

2. Mr. B. an Indian original, citizen of USA, residing in US wants to purchase said land herein after called as buyer of land.

3. Mrs. A & Mr. B does not have any income in India. They do not have PAN

4. Mrs. A & Mr. B wants to register the sale deed with the sub register Baroda.

5. The valuation as per the Govt. rules for assessment of stamp duty is about Rs. 14.01 Crores.

Query

Can this deal be executed without bringing sale consideration in India? As both the parties are residing outside India, they wish to settle monetary consideration out of India.

What will be the legal procedure to complete this deal?

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3 Replies

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE ) 01 December 2010

you can do it but you have to still pay indian IT.

1 Like

A V Vishal (Advocate) 01 December 2010

Can this deal be executed without bringing sale consideration in India? As both the parties are residing outside India, they wish to settle monetary consideration out of India.

Ans. Yes, they can settle monetary consideration out of India, but since the income arises on the sale of land situated in India it is considered as Indian income and taxable as capital gains.

What will be the legal procedure to complete this deal?

If the vendors or vendees cannot attend personally for the purpose of registration, they have to execute a SPA in favour of their relative/friend to carry out the deed.

Since the value of the transaction is high, the SR may not allow and refuse to register the property since the vendor/vendee do not hold valid PAN. So you may require to apply for the PAN.

The SPA needs to be adjudicated before the DR under whose jurisdiction the vendor lives by paying the requisite stamp duty.

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SACHIN AGARWAL (ADVOCATE) 11 December 2010

Agreed with Mr. Vishal.