1. What are the norms for Indian citizen resident outside India to acquire and transfer property in India?
A person resident outside India who is a citizen of India may acquire any immovable property in India other than agricultural/plantation/farm house, and transfer any immovable property in India to a person resident in India, transfer any immovable property other than agricultural or plantation property or farmhouse to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.
 

2. Norms for a Person of Indian Origin to acquire and transfer property in India!
A person of Indian origin resident outside India may acquire any immovable property other than agricultural/ farm house/ plantation property in India by purchase, from out of funds received in India by way of inward remittance from any place outside India or funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act; acquire any immovable property in India other than agricultural land / farm house /plantation property by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India; acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India; transfer any immovable property in India other than agricultural land/farm house/plantation property, by way of sale to a person resident in India; transfer agricultural land/farm house/ plantation property in India, by way of gift or sale to a person resident in India who is a citizen of India; transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian Origin resident outside India.

3. Acquistion of  immovable property for carrying on a permitted activity by a  person resident outside India!
A person resident outside India who has established in India in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, a branch, office or other place of business for carrying on in India any activity, excluding a iaison office, may acquire any immovable property in India, which is necessary for or incidental to carrying on such activity; Provided that all applicable laws, rules, regulations or directions for the time being in force are duly complied with; and ii) the person files with the Reserve Bank a declaration in the form IPI annexed to these regulations, not later than ninety days from the date of such acquisition;  transfer by way of mortgage to an authorised  dealer as a security for any borrowing, the immovable property acquired in pursuance of clause (a).

4. Repatriation of Sale proceeds of immovable property!
A person referred to in sub-section (5) of Section 6 of the Act, or his successor shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property referred to in that sub-section; In the event of sale of immovable property other than agricultural land/farm house /plantation property in India by a person resident outside India who is a citizen of India or a person of Indian unauthorised dealer may allow repatriation of proceeds outside India, provided the following conditions are satisfied, namely: the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations; the sale takes place after three years from the date of acquisition of such immovable property or from the date of payment of final instalment of consideration for its acquisition, whichever is later; and the amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through
normal banking channels or out of funds held in Foreign Currency Non-Resident Account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; in the ease of residential property,

the repatriation of sale proceeds is restricted to not more than two such properties. A significant development is that repatriation of sale proceeds of immovable property, acquired even out of rupee funds is available now subject to the condition that the property should have been held for a minimum period of 10 years. There is no lock-in period in respect of immovable property acquired by way of inheritance/legacy.

For repatriation, NRIs can approach the authorised dealers of foreign exchange without the need of going through RBI now. The repatriation in the case of residential properties is restricted to not more than two such properties. Even the rental income arising out of investment in real estate can be repatriated every year. In fact authorised dealers may allow NRIs/PIOs the facilities of repatriation of funds out of balances held in their NRO accounts upto US$1 million per calendar year, including sale proceeds of immovable property, subject to production of an undertaking by the remitter and a certificate by a chartered accountant in the formats prescribed by the CBDT.

5. Withhold tax rate!
Following are the withholding tax rate as per Finance Act 2004 for FY 2004-05 :
   • Rental/ business income - 30% + applicable surcharge
   • Short term capital gains - 30%+ applicable surcharge
   • Long term capital gains - 20% + applicable surcharge
   • Surcharge is 10% for individuals if taxable income exceeds Rs.8.5 lacs, else no surcharge
The tax laws may vary in future on account of amendments, modifications, etc.