These are a set of queries raised by ET Wealth readers, which have been answered by our panel of experts.
I am a foreign citizen and an only son. My mother wants to make me the joint owner in a property that belongs to her. Is this permitted in India considering that I now have a foreign citizenship?
Raj Lakhotia Managing Partner, LABH & Associates: As a foreign citizen, you can become a joint owner of a property in India depending primarily on whether you hold an Overseas Citizen of India (OCI) card. OCI cardholders can jointly own residential or commercial property in India that is received as a gift from a close relative, including a mother. However, agricultural land, farmhouses, and plantation property are excluded.
If you do not hold an OCI card, you would generally require prior approval from the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA) regulations. Alternatively, your mother could consider writing a will in your favour, which remains the simplest and legally the most secure option regardless of your citizenship status. Consulting a FEMA-compliant property lawyer before proceeding is strongly advised.
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My son is an OCI card holder. We want to buy a property in Bengaluru. Should this be bought in his name or should we buy jointly with him, so that he can sell it later?
Vikash Jain Co-founder, Share Samadhan: An Overseas Citizen of India (OCI) cardholder can legally purchase residential property in India in own name. For the smoothest exit, it is recommended that your son buys the property solely in his name, using funds from a Non-Resident External (NRE) account or through direct foreign remittance. This creates a clear foreign investment trail, allowing him to repatriate the original investment amount without the restrictions often associated with local Indian funds.
While joint ownership with a resident Indian is possible for administrative ease, it can complicate the repatriation process. If the resident co-owner contributes to the payment, that portion of the sale proceeds becomes subject to the USD 1 million annual repatriation limit. When he eventually sells the property, he can repatriate the sale proceeds for up to two residential properties. Once taxes are settled and a chartered accountant provides the necessary Form 15CA and Form 15CB, he can freely remit the proceeds back to the US.
Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away. Email ID: etwealth@timesgroup.com
