The word "person reside outside India" has been defined under Section 2(w) of Foreign Exchange Management Act (FEMA), 1999 as "a person who is not resident in India".
A person reside outside India refers to
1) Non Resident Indian
2) Person of Indian Origin (PIO)
3) A foreign national of non - Indian origin
Generally, a non-citizen cannot buy buy or acquire agricultural land or a farm land. But a non-citizen can buy or acquire a farm land with a prior approval from the Reserve Bank of India (RBI).
As per the Foreign Exchange Management Act, 1999, a foreign citizen who is a resident of India, can purchase and sell immovable properties including farm land without the prior approval from Reserve Bank of India.
A foreign citizen who is not a resident of India requires a prior approval from RBI to make any purchase of any immovable property including purchase of farm or agricultural land.
But, the citizens of 8 countries such as Pakistan, Bangladesh, China, Iran, Nepal, Afghanistan, Bhutan and Sri Lanka are subject to certain restrictions on buying the immovable properties in India.
That is, they can acquire for residential accommodation on lease only for a period of 5 years.
A property can be acquired by 3 ways such as
1) By way of purchase
2) By way of gift
3) By way of inheritance
1) Acquisition by way of purchase:
A non-citizen cannot acquire farm land by way of purchase in India.
2) Acquisition by way of Gift:
A non-citizen cannot acquire a farm land by way of Gift in India.
3) Acquisition by way of Inheritance:
A non-citizen can acquire a farm land in india by way of inheritance provided two conditions should be satisfied such as:
1) Prior approval from Reserve Bank of India (RBi).
2) The bequeathor must acquired the farmland in accordance with the Foreign Exchange Regulation Act (FERA), 1973 or Foreign Exchange Management Act (FEMA), 1999.
Section 6(5) of the Foreign Exchange Management Act (FEMA),1956 states that a person reside outside india may own, hold or transfer any immovable property situated in india if such property was owned by the person who was the resident in india.
Resultantly, a non-citizen
1) cannot purchase the farm land in India
2) cannot receive the farm land as a gift in India
3) cannot acquire the farm land in India without an approval of Reserve Bank of India(RBI).
4) RBI provide approval only for the residential accommodation on lease, for a period of 5 years not more than that.
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