Foreign owned property in Goa, (part Two)

Noni

Hi,

Letter from Directorate of Enforcement (Foreign Exchange Management Act) Government of India.
Subject:- [B]Enquiries in respect of purchase of property by you under the provisions of the Foreign Exchange Management Act. l999 Reg.

The undersigned is conducting an investigation on the above subject in respect of your purchase in India.

It is seen that a Deed of Sale in this regard was executed on 7.7.2005 before the Sub-Registrar in Goa State.

It is further seen that you are a British National and presently residing at the above address in this regard you may please provide/furnish the following information/documents to the undersigned.

1. Complete Authenticated Copy of your passport including that of any additional blooklet in legible form.
2. Also mention total period of stay in India year-wise from financial year 2001-2002, 2002-2003,2003-2004 and 2004-2005
3. Authenticated copy(ies) of permits granted to you to reside in India from time to time.
4. Updated transcripts of all Bank Accoun(s) maintained by you
individually/jointly or severally in India.
5. Total consideration amount paid for purchase of the above-said property and mode of payment (Cash amount/Cheque amount)
6. Authenticated copy of the sale deed in respect of the above property.
7. Similar information, in respect of other property purchased by you in India.
8. Please state exactly the purpose of your residing in India and furnish supporting papers as may be necessary.
9. Please state complete details of your profession/businees/service in India and abovroad, such as name and address of Organisation along with documentary evidence.
The above information/documents are requisitioned under Section 37 of the Foreign Exchange Management Act, 1999 and may please be furnished withing 15 days from the receipt of this letter.
Yours faithfully
Assistant Director by Speedy Post

p.s. what this does not make clear is that you have to photocopy all your passbook and pink book even the empty pages.
We had to make up three files. One for the Advocate, One for ourselves and one for the Assistant Director.
Photocopying passbook, deeds etc. for each file took best part of a day.
The above was sent in as requested above 5 months ago but to date we have not received anything back from the Enforcement Dept.

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Nick-H

Quite apart from the work involved, I don't like the sound of question 8 --- although its relevence to the FEMA regulations is obvious.

and may please be furnished within 15 days makes me giggle. Except that I wouldn't be giggling at all if I had the letter...

capt_mahajan

What they are doing is collecting all passport, visa, financial and property information from foreigners, and, if you have any irregularities anywhere, they can then prosecute or not based on information the 'defendant' has given them. (and which will be that much harder to refute)

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When I look up, I see people cashing in. I don't see heaven, or saints or angels. I see people cashing in on every decent impulse and human tragedy. -Heller, Catch-22

Noni

When you leaving the country in a matter of weeks, it is better to do as they ask and get an Advocate!! especially if you have nothing to hide

mal ishus

hi there noni i don't think the cap't was having a dig at you he was only saying the goverment are gathering as much info as they can to try to beat you with,and making you do all the work and the running,head's they win tail's you lose

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crvlvr

I sm curious how the govt, as ineffective as they are in India, finds out about these sales to foreigners. Sales are recorded by the local govt, FEMA is enforced at a national govt, that has to work with the state govt to get to the local govt.. .

cyberhippie

Maybe because there's political will. As wrong as much of this is on the part of foriegners I also think there are people with an agenda keeping the whole thing on the boil so to speak!!

Nick-H

I don't know, but I suspect that it works something like...

FEMA is enforced by the Reserve Bank of India. The RBI, although being a national organisation, has a presence in every state (it certainly does here in Chennai, so I'm extrapolating ---on the basis of one--- somewhat ) and those individual state offices keep an eye on what is going on.

Must be some mechanism to enforce the regulations? Surely? Maybe?

crvlvr

Unless some documents were sent to the RBI during proerty purchase, I think it is almost impossible for the central govt to know if non Indian have purchased property in India. Ofcourse, if the foreigner has converted a large amount of currency into rupees under the pretext of purchasing property, then the RBI would be aware of it. (And if they were they should not have allowed the currency to be converted) If they do not i.e. if the sale is completed with Indian rupees, then I cannot fathom how the RBI will be aware of it. Now, they could have asked the local registrar's office to go through all property registrations and report back with the "suspicious ones". Howver, even if they make the request, the registrar's office will probably ignore it.

Would be great if Noni could explain how the payment for the sale was made

capt_mahajan

No, wasn't having a dig, and the rest of that understanding is correct.

There has always been a lot of sharing information between all these bodies, including income tax. Not just for foreigners.

This is because even for resident Indians, income and capital gains tax laws, FERA/FEMA laws, wealth and gift tax laws, plus laws which permit the state to buy the property if the declared value is considered too low... plus many more, have been in effect for decades. All requiring such cross department cooperation.

All State and Central Government bodies can be swiftly efficient when they want to be.

TDK

My head is spinning a bit with info overload right now (probably why i wouldn't make a good lawyer)
Anyway its great to hear so many intelligent and helpful views on this topic. Incase anyone's interested i found an useful site today: www.clearblogs.com/commercial

Whilst alot of the info is only relevant to NRIs/PIOs, if you scroll down to 'Few tips/advice for foreigners to buy property in India' there are some good points made such as the importance of arranging a Will through a Lawyer in India (if you own a property in India) + looking into (or checking with an accountant) the taxation laws (which effect rental income and Cap Gains). Also a good point was made that if buying off plan, its a very good idea to get some sort of written agreement with your developer/builder about their guaranteed level of service (including after sales service)and the frequency of updates on building progress/ photos emailed over during each major building stage and response time to your queries. This is something i sure wish i'd done as i get practically zero after- sales service from my developer!

Obviously all the above applies to foreigners who have already reserved a property or are buying a property through the 5 year rolling lease strategy, as i certainly wouldn't personally attempt to buy a freehold property in India in the current climate (as a foreigner).Anyway hope this helps - TDK

Noni

Hi, I paid for my property via electronic transfer from my Bank Account in the UK to the developers account in Goa. Had to furnish the Directorate with a copy of the transfer Keep all the relevant documents. I think the information has come from the Registra's Office.
If we have anything to fear, God help the people who have done it illegally or who have been unable to register their properties. Has been rumoured that they were starting checking from 2005 Registered Deeds and working backwards.
Oh Well! at least the booze is cheap enough to deaded the pain of the Authorities whilst we are out there.

Noni

Have made a Will, but I expect that is another 8,500 down the drain and a whole wasted day at the Registra Office. Arrived as directed by 9.30 - left at 4.10!

crvlvr

thank for the clarification. IMHO, the RBI should not have allowed you to convert your currency if their laws do not allow you to purchase property. How can they accept your foreign currency (fully knowing what the purpose was ), convert it to Indian rupees, and then claim what you did was illegal? They were very much part of the "illegal" transaction.

goangoangone

KITLE?

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