• OCI sending money to parent to buy agri land and once inherited repatriation after selling 3 years

I am an OCI. Can I send money to my mother (age 72) who is Indian citizen living in India now so that she can buy agricultural land and when she passes away I will inherit the agricultural land? I am one of her 3 children. My other two brothers live in India as Indian Citizens.
I know that there are risks in the sense that brothers could create issue and the land inheritance to me can be held up due to that reason. But lets say that brothers don't create issue and agree that I should be legal inherited owner of the agricultural land for which I paid the money, in this case do you see any issues? 
So the land becomes inherited by me as an OCI and as long as I keep it for more than 3 years, I read that there is no short term or long term capital gain tax on agricultural land so if I sell it another Indian Citizen, then I can repatriate the money via NRO account, as long as limit of $1 million per year, Tax form are filled etc..
Is it correct I will not have to pay capital gain tax on the inherited agri land? and there is no TSD (tax at source deduction) for inherited agri land.
What issues do you see here? Do lot of OCI/NRI people do this ? Thanks for your answers.
Asked 6 years ago in Property Law
Religion: Hindu

8 answers received in 1 day.

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9 Answers

Is your mother an agriculturist?

 

in many states in India only agrultirst can but agricultural land 

 

3) your mother can execute will bequeathing land to you in her will 

 

4) will should be attested by 2 witnesses 

 

5) you can sell land after mutation of land in your name and repatriate sale proceeds 

 

6) it woukd be better to apply for probate of mother will to avoid legal complications in future 

 

7) the period of your mother holding would be considered for determining  capital gains . If mother has held land for over 2 years you can in inheriting land sell it 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

You may do the same. Also ask your name to execute a will in your name so that no issue is created after the demise of your mother.

also since the mother is not having any source of income and you are providing the money, it will be difficult for other legal heirs to stake a claim on the property.

Regards

Anilesh Tewari
Advocate, New Delhi
18103 Answers
377 Consultations

1. See firstly you need a registered will from mother so that there is no dispute between you and brothers in future.

2. There is no capital gain tax on the agriculture land it has to be sold to the resident Indian. TDS is not applicable.

3. See there is no substantial increase in prizes of agriculture land so many people don't do this as long as they want farm or participate in agriculture after returning from foreign country. 

 

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

First of all in case any any objection raised by the Income Tax Department regarding the income of your mother the purchase of this benami property will be exposed this is one risk now as per Income Tax Department is carefully watching these kinds of transactions

Another case if everything goes well after the inheritance the disposal of property will definitely attract capital gain tax on its sale consideration the repetition of the amount of consideration will definitely be dealt as per the RBI regulations.

If your mother have sufficient in income to purchase the property then she can make a will in your favour to transfer the property after her demise

Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

You can do that after taking NOC from your brothers that they will not claim the same. Yes you will incur capital gain tax too only if you sell the said land

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

An agricultural land can be purchased in the name of your mother but there are some states where you have to be an agriculturalist in order buy land or else you have to give an application to the collector and he will decide whether you can buy land or not.

Also all other issues you mentioned are ok and there is no problem.

Regards 

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

Dear Client,

OCI is not permitted to hold agriculture land in India, even if your inheritance not disputed by brothers, you will have to sell/gift/surrender it.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

1. You shall have to be a citizen of India for buying landed property in India though you can inherit the same from your deceased parents.

 

2. You can send mnoney to your mother who can do whatever she wiashes to do with the said money including purchase of agricultural land but you cabn not straigntway claim that you are sending the said money for her buying agricultural land to be inherioted by only you. 

 

3. She can buy the said property and execute a will bequeathing the said agricultural land to you and thereafter you can own the said land after taking probate of the said will.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

You can send the money to your mother, she can purchase agricultural land, but unfortunately she cannot buy agricultural land on your name because you are a NRI.

In case of her intestate death then all the legal heirs shall be entitled to an equal share in her property.

Hence she may bequeath the property to you by a Will and she can mention that the funds for purchase of this agricultural property was sent by you hence she is bequeathing the property to your name alone.

 

 

Even if your brothers do not create any problem for your inheritance of the agricultural land, they may have to execute a registered release deed relinquishing their rights in the property in your favor at that time.

 

 

For a NRI selling the property even if it is a inherited agricultural property, appropriate TDS may be deducted, however if you are sure that there is no TDS for agricultural property to NRI also then you may proceed.

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

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