NRIs, PIOs may purchase immovable property in India

Q. My grandparents, who have passed away, owned 30 acres of land in Kerala. The property is still in the name of my grandfather. My parents and I are now citizens of the US. Do I still have the rights to inherit the land? What is the procedure? My father was their only son.

Expert Comment: For the purpose of answering this query, we are assuming that your grandparents were persons resident in India. We are further assuming that your father is alive as of date and that you and your father, while being US citizens, qualify as persons of Indian origin.

As per the Foreign Exchange Management Act, 1999 and the regulations framed thereunder, the following persons can acquire immovable property in India by way of inheritance from a person who was resident in India:

* Non-resident Indian (NRI);

* Persons of Indian origin (PIO);

* A foreign national of non-Indian origin;

Assuming your grandparents were persons resident in India and acquired the property in question while residents in India, your father being a PIO is entitled to inherit immovable property in India.

If your grandfather had drawn up a will, the property will devolve in accordance with the bequests made vide the will. It would be advisable to obtain a probate of the will from a court of competent jurisdiction.

If the said land was not bequeathed to your father under a will and your grandfather died intestate (without having made a will), the property will devolve in accordance with the laws of succession that governed your grandfather at the time of his demise. In such a case, it would be advisable to obtain letters of administration for the right to administer your grandfather’s property from a court of competent jurisdiction. Once either the probate or letters of administration have been obtained, the revenue records must be updated to reflect the name of your father as the owner of the land.

However, note that there are certain restrictions on NRIs, PIOs and foreign nationals of non-Indian origin acquiring immovable property (other than by way of inheritance). Here are highlighting certain restrictions applicable to PIOs.

* NRIs and PIOs may purchase immovable property in India, except agricultural land/plantation property/farm house.

* An NRI or PIO may sell agricultural land/plantation property/farm house only to a person resident in India who is a citizen of India.

* Similarly, an NRI or PIO may acquire any immovable property (other than agricultural land/plantation property/farm house) in India by way of gift from a person resident in India or an NRI or a PIO.

* An NRI/PIO can gift agricultural land/plantation property/farm house in India only to a person resident in India who is a citizen of India.

Therefore, if your father inherits the land in question from your grandfather, he may not be able to transfer it to you during his lifetime without prior approval from the Reserve Bank of India (RBI).

Further, there are certain restrictions on persons resident outside India and their successors (which would include PIOs) with respect to repatriation outside India of the sale proceeds of any immovable property inherited. Such repatriation cannot be done without the prior permission of RBI. Therefore, even if your father were to sell the land in question to a person resident in India who is a citizen of India, he would need the prior permission of RBI before repatriating the sale proceeds outside India.