Q.1176 Questions on Repatriation of sale proceeds of property

Question: Hi I came across your website NRI Information for Non-Residents Worldwide. NRI FAQ & Tips when researching the topic of repatriation of money from India to USA. I have 2 questions and would appreciate if you can provide me an answer or point to reading materials that I can browse. 1. At your website, under REPATRIATION OF SALE PROCEEDS OF PROPERTY SOLD IN INDIA, it states "The amount that can be repatriated will be up to the amount submitted in foreign exchange through normal banking channels when the property was purchased." Does this mean that if an NRI invests 100$ in residential real estate in India & sells it for 150$, he can only repatriate his 100$ back ? What happens to the 50$ profit ? Can that too be repatriated ? You mention depositing sales proceeds in NRO accounts for eventual repatriation. Is this how profits are repatriated ? 2. My father, who is an India citizen, bought property in my name. At that time, I was already an NRI. Is this considered a Gift or an inheritance ? I do not have any documents claiming that it was a gift. And it is not an inheritance. I have held the property for more than 10 years now Thanking you Answer: Regarding your questions: Source of funds used to purchase property may effect repatriation of sale proceeds. Eventually the full $150 could be repatriated. Questions such as: o Where the funds came from to purchase the property [from within India or from abroad] o How long property was held before being sold If property was purchased from funds in India then repatriation of a maximum of one million US Dollars is allowed: 1. On production of approved documentation that the property sold was held by the NRI/PIO for at least 10 years OR 2. In case the property sold was held for less than 10 years then the cumulative period of holding the property and retention of the sale proceeds of the property in NRO account is not less than 10 years. o Clarification example: In case you are selling a property purchased with Rupee funds from within India, after holding property for 7 years. Then you need to keep the sale proceeds in an NRO account for 3 years to complete the 10 year holding period. After the 10 year period is satisfied you can repatriate. o The 10 year holding period would not apply if property was purchased with funds sent from abroad. Regards to your question of gift or inheritance. Generally a gift would be made during a persons lifetime. On the other hand when a person passes away, then assets are generally transfered by way of inheritance.
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Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
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Q.1176 Questions on

Repatriation of sale proceeds of

property

Question: Hi I came across your website NRI Information for Non-Residents Worldwide. NRI FAQ & Tips when researching the topic of repatriation of money from India to USA. I have 2 questions and would appreciate if you can provide me an answer or point to reading materials that I can browse. 1. At your website, under REPATRIATION OF SALE PROCEEDS OF PROPERTY SOLD IN INDIA, it states "The amount that can be repatriated will be up to the amount submitted in foreign exchange through normal banking channels when the property was purchased." Does this mean that if an NRI invests 100$ in residential real estate in India & sells it for 150$, he can only repatriate his 100$ back ? What happens to the 50$ profit ? Can that too be repatriated ? You mention depositing sales proceeds in NRO accounts for eventual repatriation. Is this how profits are repatriated ? 2. My father, who is an India citizen, bought property in my name. At that time, I was already an NRI. Is this considered a Gift or an inheritance ? I do not have any documents claiming that it was a gift. And it is not an inheritance. I have held the property for more than 10 years now Thanking you Answer: Regarding your questions: Source of funds used to purchase property may effect repatriation of sale proceeds. Eventually the full $150 could be repatriated. Questions such as: o Where the funds came from to purchase the property [from within India or from abroad] o How long property was held before being sold If property was purchased from funds in India then repatriation of a maximum of one million US Dollars is allowed: 1. On production of approved documentation that the property sold was held by the NRI/PIO for at least 10 years OR 2. In case the property sold was held for less than 10 years then the cumulative period of holding the property and retention of the sale proceeds of the property in NRO account is not less than 10 years. o Clarification example: In case you are selling a property purchased with Rupee funds from within India, after holding property for 7 years. Then you need to keep the sale proceeds in an NRO account for 3 years to complete the 10 year holding period. After the 10 year period is satisfied you can repatriate. o The 10 year holding period would not apply if property was purchased with funds sent from abroad. Regards to your question of gift or inheritance. Generally a gift would be made during a persons lifetime. On the other hand when a person passes away, then assets are generally transfered by way of inheritance.
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