NRIs Can Gift Properties in India to Fellow Non-Residents from Abroad without Returning Home

NRIs in US and Canada Can Gift Kerala House Without Visiting India

Two Non-Resident Indian (NRI) brothers living in the United States and Canada are seeking to transfer a house in Kerala to each other through a gift deed without visiting India. In today's Ask Wallet Wise Query, we decode the procedures required for such transactions, which involve properly executed and attested Power of Attorney documents and registration formalities in India.

The brothers, who are NRIs residing in the US and Canada, want to gift a house in Kerala that was inherited by one of them to the other. To facilitate this transaction without traveling to India, they plan to give Power of Attorney (POA) to their sister's husband to carry out the legal formalities related to the transfer of the property in Kerala.

Procedures for Power of Attorney and Registration

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According to expert advice, any transaction of immovable property in India, including a gift, is required to be registered under the Indian Registration Act after payment of the requisite stamp duty as applicable in the state where the property is situated. In this case, the stamp duty as per the stamp duty law of Kerala will have to be paid.

As per the Foreign Exchange Management Act (FEMA) laws, an NRI can acquire any residential property situated in India from another NRI through gift or purchase without permission from the Reserve Bank of India (RBI) provided the property was acquired by the present owner in accordance with the provisions of FEMA or the erstwhile Foreign Exchange Regulation Act (FERA).

Both the NRIs will have to execute their respective Power of Attorney (POA) in the presence of two witnesses. The signature of the person giving the POA must be attested to by an officer of the Indian embassy in the country of their residence.

POA Execution and Registration Requirements

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The POAs should be drafted on plain paper with photographs of the person executing the POA as well as that of the attorney holder. The attorney holder has to pay stamp duty within 3 months from receipt of the POA in India.

If the POA authorizes selling or registering of property, it must be registered in India as per the Indian Registration Act. Two separate POAs are required to be executed for this purpose. One from the donor and the other from the donee. It is advisable to take help from a lawyer dealing in property matters in the state of Kerala.

Note: The table above highlights the key FEMA provisions and RBI permission requirements for NRIs to acquire residential property in India through gift or purchase.