253. Does OCI Status Help when

Inheriting Property in India?

Q: Dear Mr Chand, Firstly let me appreciate this web-site which I felt is just excellent for us who resides in overseas and your answers are very helpful and clear. I would be grateful if you wouldn’t mind to clarify and give me some insight on the following two questions. I am an Australian Citizen and Passport holder and have recently applied for an OCI 1) While inheriting the proceeds of a property which is in market for sell at Kolkata – India all necessary “no objection” certificates has been signed-off from known relatives and now the next step is to declare and arrange for a succession certificate from all legal heirs with their signatures. In Govt. Stamp Paper my name is highlighted along with other heirs with my occupation as service, religion – Hindu, my married status and currently residing in Sydney, Australia. The Indian Lawyer states that it may be an issue with my details being Sydney, Australia and may take time and money to move forward and I’m saying that being an OCI (which should be ready very soon) it shouldn’t be an issue. Honestly, I want to speak the truth. Therefore, I was wondering if you can throw some light if this can be an issue and delay the process if I highlight “residing in Sydney – Australia” or is it pretty straight forward if I have an OCI 2) Secondly, in the event the property is sold, I will get a share of this property along with other heirs and I want to deposit the proceeds in my NRO account and not bring / transfer it to overseas. I may buy a separate property at a later stage in my name. What would be my tax implications from the proceed (e.g. if 10 Lakhs is my share from the proceed which I deposit in my NRO account in India). Thanking you in anticipation. Regards Rana A. Any person resident outside India, can inherit property in India. Those who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan have to get prior approval from Reserve Bank of India (RBI) for inheriting property in India. Citizens of all other countries do not require RBI approval. Assuming you are an Australian citizen, you can inherit property in India without any problem and the fact that you don't have OCI should make no difference. Your foreign address on the documents should also not be a problem. I suspect the foreign address issue is being used as an excuse to get money from you. Once taxes, such as capital gains are paid you could deposit the sale proceeds into your NRO account and if you prefer even transfer them to Australia. Make sure you accept payment by legal banking methods such as a bank draft and not cash so that the source of the money can be accounted for. Nri,s can have up to one million US Dollars transferred abroad from their NRO accounts if the money is from the sale of property they legally owned. To find out how to calculate capital gains on property and reduce tax in India check out question number 211. How to calculate capital gains on property sold in India. Step by step calculation is shown in answer posted with question 211.