Transfer of property, a vital part of property management for NRI, is the responsibility of the state government where the property is situated. As a result, executing an NRI property transfer differs across India because each state has different statutes, regulations, and taxes that govern such transfers. This blog will cover the best ways to transfer properties for NRIs in India.
Who is an NRI?
A Non-Resident Indian is an Indian citizen who has not resided in India's legal territory for more than 182 days in the previous fiscal year.
Technically, any person who has voluntarily left India with the sole intention of immigrating to another country to seek employment or to conduct business or work in that country. An NRI is someone who has been planning to leave India and live in another country for an undetermined period.
Different Methods Used in India for Transferring Property
The Transfer of Property Act, 1882 governs the legal practice of transferring property in India. This act contains several special provisions highlighting the conditions and rules of property transfers, an integral part of the property management for NRI in India. The fundamental concept says that an NRI can transfer their property to any individual, company, or organization/association. And the property can be immovable or movable. However, every property transaction in property management for NRIs, such as buying, selling, carving interest, etc., is governed by state and central governments.
However, the following are a few methods by which an NRI can transfer any property in India:
Transferring property titles/ownership can be achieved in two ways:
When an involuntary transfer of property occurs during property management for NRI, the court typically seizes the individual's property and; transfers it to someone without regard for the former owner's discretion. When this type of transfer occurs, the joint family or ancestral property assets may be affected.
In the case of a voluntary transfer of property or property titles, the property owner would pass on their property to whomever they choose. The owner can transfer such property in the following ways in property management for NRI:
What types of property can NRIs transfer in India?
Property management for NRI is like any other Indian resident or citizen who has the right to transfer any immovable property in India, whether residential or commercial. An NRI may transfer property to family members or relatives. According to the Indian Succession Act of 1925, NRIs may also have the right to request a share of their ancestral properties from their family members or relatives. If an NRI cannot travel, they can appoint a Power of Attorney to act on their behalf in transferring their property.
Various Types of Property Transfers in India
According to the Transfer of Property Act of 1882, property management for NRI includes various types of property transfers in India:
A sale or transfer of property always means that the owner is selling the property title for a reasonable fee, as stated in Section 54 of the Transfer of Property Act, 1882. All property rights will get transferred to the person who pays the demanded or negotiated price.
The following are the fundamental aspects of a sale transfer:
The primary modes of sale transfer to consider are as follows:
As per Section 58 of the Transfer of Property Act of 1882, a mortgage is the transfer of an interest in a specific immovable property to attach monetary payments in loans, future debts, or performance of the engagement. In property management for NRI, a mortgage is a transfer of an interest in an immovable property that can be used as security to pay all your debts. It is necessary to identify the specific immovable property due to various specifications of the Registrations Act, 1908.
According to Section 118 of the Transfer of Property Act of 1882, when two people collaboratively agree to exchange one property for ownership of another thing or property, even if both properties are money. These types of transactions are known as "exchange under the act." Although it appears that one can exchange only immovable properties under this act, movable goods are exchangeable too.
According to Section 122 of the Transfer of Property Act, 1882, when a property owner hands over a title to someone voluntarily without anything in return, such as the price paid or anything at the owner's discretion, it is considered a gift transfer. The donor is the former owner of the property, and the donee is the person who receives the property as a gift.
Property management for NRIs includes certain conditions when transferring property as a gift. For example, a gift becomes void if a donee is offered something and dies before accepting it. If an immovable property is gifted to a minor, the minor's legal guardian is supposed to assume the property title until the same reaches the legal age.
According to Section 105 of the Transfer of Property Act of 1882, a lease is technically an immovable property with transferable rights for a specific period for a paid or promised price. And one can renew it regularly. A lease is a contract that clearly defines the terms under which the involved party agrees to rent out a property that the transferor legally owns for a specified period.
Section 53 of the Indian Easements Act of 1882 states that anyone possessing a license has the right to do or continue to do whatever they want with immovable property. Without it, the activity or usage of that property is illegal. Thus, a license is a crucial part of the property management for NRIs because it allows permission or authorization to remain or use the immovable property without being considered trespassing or illegal.
Ways through which NRIs can transfer property in India
In India, different methods exist in property management for NRI when transferring ownership of immovable real estate property. The six most common ways to transfer property ownership in India are as follows:
Through a legally valid will
Anyone can acquire their desired rightful property through inheritance or a simple legal will. If the person dies without leaving it, the land or property will be transferred to the legit legal heirs as defined by Indian succession laws.
Inherit property through natural succession under Indian Laws
According to Indian inheritance laws, the beneficiaries of inheritance can acquire their desired property only after the death of the person from whom they are inheriting the property, not before. However, the testator can change the details anytime after the will gets registered.
By deed of relinquishment or discharge
In property management for NRI, if there are multiple owners of any property or assets, one co-parent can transfer their share of the property in the name of the other co-parent using the relinquishment or discharge deed. The co-parent can do it with or without thinking about it. The amount of money exchanged is entirely up to the person transferring the property to the other co-parent.
Partition deeds to settle disputes between parties
A partition deed helps property co-parents when a court orders the local revenue authority to intervene if problems arise between the involved parties.
A gift can range from movable property such as cash, check, shares, jewelry, utility goods, etc., to immovable property such as a house, land, building, etc. It will be a capital asset for the person who receives property as a gift.
In India, the most preferred property management for NRI is transferring property in the execution of sale deeds.
Documents Required for NRI Property Transfer in India
In property management for NRI, the documents required for transferring Indian property will vary depending on the method. And as previously stated, these requirements will vary by state. Depending on your circumstances, you may be required to provide the following documents when transferring property in India:
How PropertyAngel can help you
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