• Selling agricultural land by NRI, outside of Kapurthalla (Punjab)

1. Is a clearance certificate under Income tax Act, 1961 needed by the NRI seller of agricultural land . NRI has never ever rented the land nor received income. The land has been in possession of NRI since 1970. No taxes are liable on agricultural land ? it is outside the 8 mile zone. 
2. what scams should I look out for as a NRI seller. 
3. How do I export funds from sale of land to UK
4. Patwari wants large sum of money (12 Lakh) for introducing a seller , should I pay him or should it be the buyer? or both of us? Should Patwari be asking for a commission?
Asked 7 days ago in Property Law
Religion: Sikh

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10 Answers

No need to pay Patwardhan any money 

 

2) if you do t have any buyer you may need services of broker to find seller .he will charge you one percent brokerage 

 

3) buyer May not agree to pay  any brokerage charges 

 

4) As per RBI, NRIs/ PIOs are allowed to repatriate an amount up to USD one million, per financial year (April-March). This amount includes sale proceeds of assets acquired by way of inheritance or settlement.

 

5) you should execute sale deed only when full consideration is received by you by demand draft or NEFT transfer 

Ajay Sethi
Advocate, Mumbai
88369 Answers
6226 Consultations

5.0 on 5.0

 

Contact a local lawyer 

 

dont accept any money by cash 

 

sell land only by registered sale deed 

 

4) If the property is agricultural land it is exempt from capital gains tax and income tax if the same is situated in rural area.
But if the property is situated in non-rural area, it is not exempt from income tax or capital gain tax.

 

5)NRI need to open a NRO account and transfer all the sale proceeds to that account. After paying the local tax the Tax clearance certificate is required to remit up to one million US dollars, and they can even pay more with the prior permission of RBI.

 

 

Ajay Sethi
Advocate, Mumbai
88369 Answers
6226 Consultations

5.0 on 5.0

No tax is leviable (income tax/capital gain tax) on agricultural rural land. Taking advantage of your absence locally, buyer will hard bargain the  price. That is the  only thing you need to take care of.

Ravi Shinde
Advocate, Hyderabad
2816 Answers
42 Consultations

5.0 on 5.0

NRIs can sell agricultural land, plantation property, or farmhouse property provided the buyer is a citizen of India and resides in India

Foreign national of non-Indian origin resident outside India would need prior approval of Reserve Bank to sell agricultural land/plantation property/ farm house in India.

. If the NRIs have purchased such lands with permission from RBI, they require approval from RBI to complete a sale transaction.

The sales proceeds can be remitted to an NRO account.

 Patwari is expecting bribe for no reason. If he is insisting on any commission you can give a complaint against him with the DVAC

T Kalaiselvan
Advocate, Vellore
78530 Answers
1554 Consultations

5.0 on 5.0

The NRI seller has to get a clearance certificate from RBI as per the rules for selling agricultural land in India.

The documents pertaining to the property are to be scrutinised and a proper legal opinion should be obtained with regard to the title and other related issues from a local advocate. 

Due diligence to be taken before purchasing the agricultural property from a NRI. 

T Kalaiselvan
Advocate, Vellore
78530 Answers
1554 Consultations

5.0 on 5.0

Dear Client,

List Of Documents that an NRI requires to sell a property.

Passport

An NRI, who want to sell a property in India, should hold a passport; not necessarily an Indian passport. This will serve as the identity proof of the person, involved in the transaction.

For an Overseas Citizen of India (OCI) and a Person of Indian Origin (PIO), a passport serves the same purpose.

PAN Card

A number of NRIs do not pay taxes in India, as their income is taxable in the countries they stay. However, experts believe NRIs should apply for a PAN (Permanent Account Number) card here when they intend to buy a property in India, as it will be required to apply for a tax exemption certificate as after the sale of the property. PAN numbers are given out to NRIs with a foreign communication address to select countries.

Tax Returns

If an NRI has been holding a property for a certain period and earning money from it (by renting it out, etc), the transaction becomes taxable. In that case, tax returns for the whole property-ownership period should also be kept ready.

Address Proof

An NRI has to give documents in support of his address in India as well as abroad. This may include a ration card, telephone or electricity bills, life insurance policy statements, etc. Same set of papers are also required as the proof of residence abroad.

Sale Deed

A key document needed in the process is the sale deed, also a primary proof of ownership. A legal document, sale deed is an agreement executed by an NRI while purchasing an under-construction property in India.

Allotment Letter

A letter of allotment (from a society, a builder or any relevant authority) bestows the property to the said person who holds it.

Documents From The Society

For an apartment in a particular society, a letter from the apartment/society is needed for a go-ahead to the sales process. This document states the seller has no outstanding payments to the society. A copy of membership of the society is also important to establish ownership of the property.

Approved Building Plan & Occupation Certificate

While a copy of an approved building plan is necessary for selling a property, an occupation certificate is a proof that the apartment has been occupied and is also given out by the builder or the building society.

Encumbrance Certificate

An encumbrance certificate is necessary to assure the buyer that the land or the property has no dues to any legal authority. This is important in the case of a house, an apartment or even land.

Apart from these documents, it would also help if an NRI can provide documents of property tax receipts over the years. A guarded buyer may ask for it.

In case an NRI is unable to produce any one the above documents, he/she may go for a lawyer certificate that proves the ownership of the property. A lawyer would carry out a title search and produce a report on the property. Though this certificate is also admissible for a sale, an original document is necessary to get a sale done quickly.

 

Thank You.

Anik Miu
Advocate, Bangalore
5001 Answers
53 Consultations

4.9 on 5.0

Don’t accept any deposit 

 

ask him to arrange funds then you will sell property to him by registered sale deed 

 

best is DD or NEFT into NRO account 

Ajay Sethi
Advocate, Mumbai
88369 Answers
6226 Consultations

5.0 on 5.0

It is not normal that a buyer would deposit the entire sale consideration amount first and then get the sale deed registered later.

What is the reason that the buyer is demanding this arrangement||?

The possibilities of such suspected scams cannot be ruled out hence it would be advisable to be cautious while dealing with such people.

The safest mode of transaction is any transaction which eventfully creates a legally valid evidence

 

T Kalaiselvan
Advocate, Vellore
78530 Answers
1554 Consultations

5.0 on 5.0

Dear Client,

The chain starting with title deed which validates that the seller is the true owner of the property to sale deed, encumbrance certificate, property tax receipts, among other things.

The owner may have given a power of attorney to a third party to deal with the property. It is important to check if the power of attorney holder has entered into any arrangement with any third party.

Once a home purchase deal is finalized between a buyer and a seller, a formal process is initiated to conclude it legally. This starts with the buyer paying the seller a small portion of the transaction value, to show his genuine intentions. This payment, in Indian real estate parlance, is commonly known as the ‘token amount’.

Since the buyer pays this money to show his genuine interest in the property, this amount is also referred to as the ‘advance deposit’ or ‘earnest deposit’.

The interest you earn on an NRO Account is taxable at 30%, deductible at source.

If your finances include your income earned in India and you want an account to manage it within India, an NRO Account is an ideal option.

 

Thank You.

Anik Miu
Advocate, Bangalore
5001 Answers
53 Consultations

4.9 on 5.0

It's not normal. Before registration and possession total amount must be paid

Prashant Nayak
Advocate, Mumbai
27579 Answers
88 Consultations

4.4 on 5.0

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