PIO Repatriation of sale proceeds of property

#1 Feb 11th, 2010, 11:50
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#1
Can anyone advise plse, I am not generally stupid (well not very!!) but the following answer on SBI, FEma rules does not make sense to me at all. To sum up : I am PIO if i sell my property can I repatriate full amount back to Uk including the 'profit' (ie over and above what i paid initially for the property... less taxes of course which i believe to be 20% capitol gains payable here)

I have read and re read this and it appears to contradict itself...(theres a surprise ) on the one hand it states I can take up to 1 million US dollars and in another sentence that only original investement (ie purchase price can be repatriated??) I paid by sending stirling from Canara bank in London direct to the builders canara account in Goa via Mumbai of course.

Is there anyone out there that can fathom out what procedure i have to follow and what i can legally repatriate etc if so very grateful for replies...

I have to say i feel a little embarrassed/awkward posting this, knowing how so many of you on this site are unfortunate in not being able to sell, let alone repatriate your funds. My heart goes out to you all. 'There but for the grace of God' ....what can i say
Indian Girl




QUOTE IV Repatriation of sale proceeds of residential / commercial property purchased by NRI / PIO

Q.22. Can NRI / PIO repatriate the sale proceeds of immovable property? If so, what are the terms?

A.22. NRI / PIO may repatriate the sale proceeds of immovable property in India

(a) If the property was acquired out of foreign exchange tsources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account
The amount to be repatriated should not exceed the amount paid for the property:
1. in foreign exchange received through normal banking channel or
2. by debit to NRE account(foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.

Repatriation of sale proceeds of residential property purchased by NRI / PIO out of foreign exchange is restricted to not more than two such properties.
Capital gains, if any, may be credited to the NRO account from where the NRI/PIO may repatriate an amount up to USD one million, per financial year, as discussed below.

(b) If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
#2 Feb 11th, 2010, 11:55
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#2
ooops
Last edited by Indiangirl; Feb 11th, 2010 at 11:57.. Reason: double entry of post ...sorry
#3 Feb 11th, 2010, 12:06
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#3
the quote of relevant provisions provided by you in the post about repatriation of sales proceeds of immovable property in India by NRI/PIO is correct and latest as per mster cirulars issued by RBI.

you need to approach to AD for remittances. any remittance above the limits prescribed will be a violation of FEMA.
its me mak!!!
#4 Feb 11th, 2010, 12:22
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Well, I am not an expert but here but some things which you need to think are
a) How are you planning to take the sale proceeds. Is it all in Cheque/demand draft or part Cheque part Cash
b) If you are taking proceeds through a Cheque. which account you would be depositing the cheque. An account with an Indian bank which is either an NRE/NRO/FCNR account.

I am reposting the entire text.The text talks about how the purchase was made. Point one applies if you made purchase by paying direct foreign exchange. Point two applies if you made purchase using locally generated Ruppee funds. Point three if you got property by inhertitance. Point four if you boght property by loan.

Legally it seems point one applies in your case as you have deposited foreign exchange in either the Resident or a NRE account of builder.in that scenario you can LEGALLY repartiate foreign exchange equivalent of the purchase price.


The facility to remit the sale proceeds of immovable property is not available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
The following conditions apply for repatriation of immovable property:

1) Immovable property acquired through foreign exchange:
Acquisition should be in accordance with the existing Foreign exchange laws;
The purchase price is met out of Foreign Exchange Inward Remittance or NRE / FCNR (B) account;
Repatriation is restricted to a maximum of two properties in the case of residential properties. Such restrictions do not apply to commercial or industrial properties.
The amount of repatriation is restricted to the foreign exchange equivalent of the purchase price.
2) Immovable property acquired through local funds: NRIs/PIOs are allowed to repatriate funds held in their NRO account up to US $1 million per financial year. The limit includes sale proceeds of immovable property also.

3) Immovable property acquired through inheritance / settlement and legacy: If a property is acquired by way of inheritance / settlement or legacy, there is no lock-in-period with respect to the holding period for the property. The sale proceeds will be credited to the NRO account and thereafter in view of the permitted remittance up to US$ 1 million per financial year, the sale proceeds can be repatriated. However, note that remittance of assets acquired through "settlement" is available only on the demise of the settler.
4 )Immovable property acquired by raising a loan in India: NRI/PIO acquires immovable property through a loan obtained from authorised dealers or housing finance institutions in India approved by National Housing Bank. The loan is raised for the purchase of residential accommodation and is subsequently repaid by remitting funds from abroad or by debiting NRE/FCNR accounts. Then the authorised dealers can allow repatriation of the sale proceeds of the residential accommodation to the extent of such loan's repaid by them out of foreign inward remittances received through normal banking channels or by debiting NRE/FCNR accounts.
#5 Feb 11th, 2010, 12:25
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#5
hi mlele yes thanks...but I realise that the quote is correct and latest/up to date as i looked it up in 1st place... my query is I cannot make sense of it!! it appears contradictory... to me at least... on the one hand saying i can tale up to $1000000 on the other only the original price paid...i know it refers to HOW one has paid but it isnt clear (to me)
Indian Girl
#6 Feb 11th, 2010, 16:55
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#6
if you have purcahsed the property from the foreign exchange remitted to india, then you are allowed to take that back. this is specific limit for property moeny

USD 1M per year is general limit available to NRI/PIO for remittance of money from his account to outside india. This may incidently include property money.

so both limits are different.

you may choose to discuss this with your auhtorized dealer (bank) before doing any transaction or if you need a contact of practicing company secretary from GOA i can provide the same to you. who will be able to guide and take you thorugh the remittance and other process.
#7 Feb 11th, 2010, 17:03
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#7
many thanks for the above help, so in effect i am unable to repatriate my 'profits' back to the UK? only the funds i brought in initially to purchase the property as it cost back then. so what happens about that I wonder as it will be of little use to me here in India once we have left and will be a substantial sum of money.
Indian Girl
Last edited by Indiangirl; Feb 11th, 2010 at 17:06.. Reason: spelling error
#8 Feb 11th, 2010, 18:08
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mmlele speaks of two things.

One is the ability to repatriate cash that came from abroad in the first place.

One is the ability to take, in general, money out of India.

Hopefully, I have understood this correctly, and hopefully the combination will allow you not to be separated from your cash.
~
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#9 Feb 12th, 2010, 15:59
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#9
yes that's it. and second limit is yearly limit.

caution: don't do anyting on this advise, because this is based on info you have given and without looking at any documents. take proper advise before you do anyting. ( a standard disclaimer from any consultant) (by profession i am a company secretary in practice)
#10 Feb 12th, 2010, 17:26
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#10
thanks guys
Indian Girl

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