Rules for Transfer of Immovable Property in India

Immovable property transfer occurs as a big issue sometimes. Sometimes confusions make it more complex. Here’s the clear view of property transfer rules.

Immovable property can be transferred by sale or by gift or through mortgage.

NRI, PIO, Foreign national must have to follow some rules while selling immovable property in India. NRI can sell property to a resident in India or to an NRI or to a PIO in India, whereas a PIO can sell property to a resident in India, NRI or to a PIO. Incase PIO wants to sell property to a PIO, the prior approval of Reserve Bank in required. Foreign national of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan can sell property in India to the resident of India, NRI or PIO. But in every case prior approval of Reserve Bank is required.

NRI and PIO may sell agricultural land, plantation property or farm house to a person resident in India who is a citizen of India. Foreign national of non-Indian origin resident outside India would need prior approval of Reserve Bank to sell agricultural land, plantation property, farm house in India.

Immovable property can also be transferred by gift. NRI, IPO may gift his residential or commercial property to a resident of India or to an NRI or to PIO. Foreign national of non-Indian origin needs prior approval of Reserve bank to do the same.NRI, PIO can gift agricultural land, plantation property or farm house in India to the resident citizen of India. Foreign national of non-Indian origin needs prior approval of Reserve Bank for doing the same.

Immovable property can also be transferred through mortgage. NRI, PIO can mortgage to an authorized dealer or housing finance institution in India without the approval of Reserve Bank and can mortgage to a party abroad with prior approval of Reserve Bank. A foreign national of non-Indian origin can mortgage only with prior approval of Reserve Bank. A foreign company which has established a Branch Office or other place of business in accordance with FERA/FEMA regulations has general permission to mortgage the property with an authorized dealer in India.

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