Sell a property in India
For expats, sell a property in India from abroad is a challenging process, especially when they leave the country for years. There are rules for an NRI selling inherited property in India, and it requires legal assistance. Here is the step-by-step procedure on how NRIs can sell their inherited property or land legally without any legal dispute:
The process is quite similar to residential Indians and non-residential Indians except the latter have fiscal implications and repatriation policies.
Title transfer for inherited property
If it is a inherited property, the title should be changed to the seller’s name by the process of mutating the revenue records. This transfer requires a will or a successor certificate. If a copy of the will cannot be obtained, the court may issue a succession certification. With this certificate, you can apply for a title change in the mutation of the sales account bureaus.
This procedure is time-consuming, and it is advisable to have changed it earlier.
Checklist of documents needed for sales
It is necessary to procure all documents for the sale of the property in India. Some of the documents are:
- Title deed or mother deed of property
- No objections certificate concerning the clearance of legal disputes and debts.
- Occupation certificate issued by the municipal corporation
- Plan approval / Sanction Certificate
- Cooperative share certificate, if ownership is part of a social building
- Attestation certificate, if one of the original documents has been lost
Apart from these papers, the seller should have a PAN card number to sell properties that include large transfers. The NRI can apply PAN to sell the properties, or he/she can submit Form 60 to the Registrar office for the same.
Find a real brokerage firm
If there are no close friends or relatives who trust with the transaction, it is advisable to consult a brokerage firm to assist in the sales process. However, if the seller’s real estate market is meaningful and supports people, then he/she can go with the sales process on their own.
The brokerage firm can help you find the market situation, the search for suitable buyers, price development and risks involved. You can assist in fixing the selling price, requesting PAN and lawyer service to obtain legal documents and tax effects. Although they provide end-to-end solutions, Brokerage does not have a legal license in India, and it could be annoying if the intermediation fee is not properly fixed. It is advisable to find the right brokerage company and fix the fee before the sales process begins.
It is essential to authorize a power of attorney for the transaction to a PoA owner. A power of attorney is not required; instead, the seller can give “Admit PoA” rights to the PoA holder, who represents only the owner in the Registrar Office. Afterward, the seller should duly sign all the documents and the holder of the PoA shall represent him in the sales register.
However, the output of 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 focus on the tax implications
Focus on tax and repatriation problems
The NRIs have long-term capital gains when the property has been sold after 3+ years of purchase, with the tax rising to 20.6%. Furthermore, the basic freedom of Rs.2 lakh is not applicable to NRIs. There are other tax exemptions for the NRIs during the sale of the property.
The sales money can be repatriated by official dealers, but it should not be more than US $ 1 million per year. If the property is inherited from an NRI to another NRI, then you must get special permission from the Reserve Bank of India. However, the brokerage firms will guide you through this process.