Are you an NRI and inherit a property? Did you buy a home in India and got settled in other country. Are you planning to sell off that home. Here are the details.
Steps for NRIs to Sell a Property in India
For expats, selling a property in India from abroad is a challenging process, especially if they left the country years back. There are rules for an NRI in selling his/her inherited property in India and it requires legal help. Here is the step wise procedure on how NRIs can sell a property (their inherited land or property) legally without any litigation:
The process is quite similar for residential Indians and non residential Indians except for the latter have tax implications and repatriation policies.
1. Title Transfer for Inherited Property
If the property is inherited, then the title should be changed to the seller’s name by the process of mutation of revenue records. This transfer requires a will or a succession certificate. If one cannot procure a copy of the will, then the local court can issue a succession certificate. With this certificate, one can apply for a title change in the mutation of revenue records office.
This procedure is time consuming and it is advisable to have them changed earlier.
2. Checklist of Documents Required for Selling
It is necessary to procure all the documents required for selling the property in India. Some of the documents include:
- The title deed or mother deed of the property
- No objection certificate to show the clearance of litigation and debts.
- Occupation certificate issued by the municipal corporation
- Plan approval/sanction certificate
- Cooperative share certificate if the property is a part of a society building
- Lawyer certificate, if any of the original documents were lost
Apart from these documents, the seller should have a PAN card number to sell properties that involve big amount transfers. The NRI can apply PAN to sell the properties or he/she can submit form 60 at the registrar office for the same.
3. Finding a Right Brokerage Firm
If there are no close friends or relatives to trust with the transaction, it is wise to consult a brokerage firm to assist in the selling process. However, if the seller has realty market sense and people to support then he/she can go ahead with the selling process on their own.
The brokerage firm can help you in suggesting the market situation, finding suitable buyers, price trends and risks involved. They can assist in fixing the selling price, applying for PAN and attorney service to obtain legal documents and tax implications. Although they provide end-to-end solutions, brokerage in India has no legal license and it could be troublesome if the brokerage fee is not fixed properly. It is advisable to find the right brokerage firm and fix the fee before initiating the selling process.
4. Sales Registration
It is essential to grant the power of attorney for the transaction to a PoA holder. There is no need to grant a complete power of attorney; instead the seller can give ‘Admit PoA’ rights to the PoA holder who will merely represent the owner in the registrar office. According to this, the seller should duly sign all the documents and the PoA holder will represent him in the sale registration.
However, issuing the PoA process differs from time to time and each firm will have a different process. Once the registration is complete, the seller should also concentrate on the tax implications.
5. Focus on Tax and Repatriation Issues
The NRIs have long term capital gains if the property was sold after 3+ years of purchase, the tax for which comes to 20.6%. Further, the basic exemption of Rs. 2 lakh is not applicable for NRIs. There are other tax exemptions available for the NRIs while selling the property.
The sale money can be repatriated through official dealers but it should not be more than US $1 million per year. If the property is inherited from one NRI to another NRI, then you need to get a special permission from the Reserve Bank of India. However, the brokerage firms will guide you through this process.
Do opt for a legal help. They act as best resort and pull you out from the property issues.