Now Reading: NRIs can inherit agricultural land but cannot sell to NRIs
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NRIs can inherit agricultural land but cannot sell to NRIs
Non-resident Indians can inherit agricultural land in India but are restricted to selling it only to an Indian resident, according to rules under the Foreign Exchange Management Act. While NRIs are prohibited…
Non-resident Indians can inherit agricultural land in India but are restricted to selling it only to an Indian resident, according to rules under the Foreign Exchange Management Act. While NRIs are prohibited from purchasing agricultural land, inheritance is permitted from parents or family members, either through a will or succession laws.
On inheriting a property, an NRI does not pay tax, but any rental income from the property is taxable. When selling an inherited property, NRIs can repatriate up to $1 million per financial year without prior RBI approval if the property was acquired through inheritance from an Indian resident. Repatriation above this limit requires explicit RBI permission.
For residential properties, the sale proceeds of up to two properties can be repatriated. NRIs must submit Forms 15CA and 15CB, prepared by a chartered accountant, to complete the repatriation process.
Indian Opinion Analysis
The key constraint for NRIs inheriting agricultural land is the restricted sale pool: only Indian residents can buy it, which can limit the market and affect pricing. Under FEMA regulations, the distinction between ancestral and self-acquired property also determines whether succession laws or a will governs the transfer. For those looking to repatriate proceeds, the $1 million annual ceiling without RBI approval is a binding limit, and exceeding it requires a separate approval process. The next practical step for an NRI inheriting such land is to verify the property's classification and ensure all FEMA compliance is met before initiating any sale or fund transfer.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
