Your relative can legally gift her inherited 1/4 share of the residential property in India, and no RBI approval is required since she inherited it from an Indian resident. The transaction is valid under Section 6(5) of FEMA, 1999 and Rule 30(2) of the FEM (Non-Debt Instruments) Rules, 2019, which specifically allow a foreign citizen to own and transfer inherited property to a resident Indian.
Here’s a clear, step-by-step outline of how to complete the process:
Your relative can prepare a gift deed stating that she inherited the property from her father, an Indian resident at the time of death, and that she wishes to voluntarily gift her 1/4 share to the donee (a resident Indian). The deed should mention that the transfer is made out of love and affection and without monetary consideration.
Since she resides abroad, she can authorize a trusted representative in India to execute and register the gift deed on her behalf. For this, she needs to execute a Special Power of Attorney (POA). The POA should specify the property details, empower the attorney to sign and register the gift deed, and include the names of both the donor and the donee. The POA must be signed before a Notary Public or Indian Consulate in the country where she resides, and then sent to India. Once received, it must be adjudicated (stamped) at the District Registrar’s Office within three months of arrival, as required by Indian law.
After the POA is adjudicated, the attorney can sign and present the gift deed for registration before the Sub-Registrar in India. Both the attorney (representing your relative) and the donee must appear in person with two witnesses for registration. The usual stamp duty and registration fees will apply based on the property’s market value and location.
For the transaction, the following documents will be required:
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Passport copy of the donor (your relative) showing her current nationality.
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Proof of foreign residence (utility bill or ID).
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Legal heir or succession certificate confirming her inheritance share.
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The father’s death certificate and the title documents of the property.
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The notarized and adjudicated Power of Attorney.
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PAN card and Aadhaar of the donee.
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Proof of payment for stamp duty and registration fee.
The donee must ensure all payments, including stamp duty and registration charges, are made through Indian banking channels. It’s also advisable to attach a brief FEMA declaration within the gift deed, stating that the donor inherited the property from an Indian resident and that the transfer is permissible under FEMA and Rule 30(2) of the NDI Rules.
No separate or additional RBI approval is required in this case. The RBI’s own clarification confirms that such gifts are permitted when the property was acquired through inheritance. Once the registration is completed, the donee becomes the legal owner of your relative’s 1/4 share, and the transaction stands fully compliant with FEMA and registration laws.
In short, she can execute the gift through a Power of Attorney attested abroad and adjudicated in India, provide supporting documents showing her inheritance, and register the deed before the Sub-Registrar. This process is sufficient and fully legal without any further RBI permission.