442. Gifting of Plantation in India . . .
Questions: Dear Sir/Madam,
Is it possible for my mother to gift her plantation to me due to her old age and ill health? I am residing in India and in abroad as
well. I have two domiciles and not a registered NRI and all that . I pay my house (registered in my name) tax/electricity in India and
I get the govt bills from them, and also I possess voter's ID. I stay abroad for less than six months in a year.
Would be very greatful if you can give any feedback on this regard.
Best regards,
S. Gowda.
Answer: Under ordinary circumstances, a mother could gift her plantation property to her son provided her son is not classified as a Non-Resident. Despite your claim that you are not a NRI, I do have some doubts. You should seek legal advice to clarify your status. When it comes to deciding whether a person is a resident or non-resident, both the FEMA and RBI rules have to be taken into account. While RBI definition of a resident mostly circles around the 182 day rule, FEMA definition is slightly different. Living in India for more than 182 days is not the only criteria to be considered to become a Resident of India. FEMA also considers the purpose of why a person is leaving India. Suppose a person goes out of India for the purpose of taking employment, he is considered a non- resident from the day he/she leaves India. In your email, you do not mention why you travel abroad and have two domiciles? Additionally, if you claim not to be a NRI, your foreign income may also come under the scanner of the tax department as taxes on worldwide income rule is applicable to resident Indians. Paying house tax in India or utility bills, having a voter’s ID card etc. is not the criteria that makes a person a resident of India. Many NRIs also have houses in India and pay utility bills, NRIs who are Indian citizens may also have voters card’s as they can now even vote from abroad, but they are still considered to be Non Residents and cannot be gifted agricultural/plantation properties. They can of course inherit such property. As I mentioned above you should seek legal advice. You mention that you have two domiciles, let me clarify that under the double tax avoidance agreement between India and many other foreign countries, a person can have only one domicile for taxation purposes. In cases where a person has residences in two countries, here is how tax treaties deal with such situations: Excerpt from DTAA India- Canada used as sample: Residence 1. For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules: o (a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (hereinafter referred to as his centre of vital interests); o (b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; o (c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; o (d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
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442. Gifting of Plantation in India
Questions: Dear Sir/Madam,
Is it possible for my mother to gift her plantation
to me due to her old age and ill health? I am
residing in India and in abroad as well. I have two
domiciles and not a registered NRI and all that . I
pay my house (registered in my name)
tax/electricity in India and I get the govt bills from
them, and also I possess voter's ID. I stay abroad
for less than six months in a year.
Would be very greatful if you can give any
feedback on this regard.
Best regards,
S. Gowda.
Answer: Under ordinary circumstances, a mother could gift her plantation property to her son provided her son is not classified as a Non- Resident. Despite your claim that you are not a NRI, I do have some doubts. You should seek legal advice to clarify your status. When it comes to deciding whether a person is a resident or non-resident, both the FEMA and RBI rules have to be taken into account. While RBI definition of a resident mostly circles around the 182 day rule, FEMA definition is slightly different. Living in India for more than 182 days is not the only criteria to be considered to become a Resident of India. FEMA also considers the purpose of why a person is leaving India. Suppose a person goes out of India for the purpose of taking employment, he is considered a non-resident from the day he/she leaves India. In your email, you do not mention why you travel abroad and have two domiciles? Additionally, if you claim not to be a NRI, your foreign income may also come under the scanner of the tax department as taxes on worldwide income rule is applicable to resident Indians. Paying house tax in India or utility bills, having a voter’s ID card etc. is not the criteria that makes a person a resident of India. Many NRIs also have houses in India and pay utility bills, NRIs who are Indian citizens may also have voters card’s as they can now even vote from abroad, but they are still considered to be Non Residents and cannot be gifted agricultural/plantation properties. They can of course inherit such property. As I mentioned above you should seek legal advice. You mention that you have two domiciles, let me clarify that under the double tax avoidance agreement between India and many other foreign countries, a person can have only one domicile for taxation purposes. In cases where a person has residences in two countries, here is how tax treaties deal with such situations: Excerpt from DTAA India- Canada used as sample: Residence 1. For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules: o (a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (hereinafter referred to as his centre of vital interests); o (b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; o (c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; o (d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
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