Property law in India and its relevance for NRIs

Property law in India and its relevance for NRIs

Property law in India is a vast subject. It is a study under various statutes like The Transfer of Property Act, The Indian Contract Act, Registration Act, Indian Stamp Act, RERA, Land Acquisition laws, etc. Apart from these, for NRIs, special rules and regulations are provided under FEMA by RBI.

Property can be moveable, immovable, tangible or intangible.

There are various property-related activities like an investment in a property through sale and purchase, renting out a property, registration of property documents, updating revenue records and municipal records, exchange and transfer of ownership of property, etc.

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Many top lawyers, including property lawyers and property management companies, offer services to deal with such activities. There are property lawyers in India, assisting in property-related documentation and transactions and settling legal disputes if the need arises.

Property law in India covers a lot of areas. Some of the everyday activities relate to:

  • Under property law in India, real estate investment is a significant area. It has been an attractive option for NRIs and serves the dual purpose of maintaining a connection with roots and profit-making. NRIs are permitted to invest in residential and commercial properties just like any other resident Indian. But for agriculture and plantation, the requirements are different. For promoting the buying and selling of the real estate, the Government provides different loan options through banks and other financial institutions. NRIs have to be aware of the regulations made by RBI under FEMA for the sale and purchase of the real estate, payment as well as repatriation of sale proceeds.
  • For the purchase of property by NRI, money is remitted through proper banking channels. Funds maintained in NRE/NRO/FCNR accounts can also be used. A loan facility is available to buy a house and banks transfer the amount directly to the seller or developer’s account.
  • Intangible property like shares, bonds, and intellectual property rights like patents, copyrights, etc. are also a part of property law in India. NRIs can invest in Mutual funds, Government Securities, Bonds, Equity and Hybrid Funds, etc. Investment in Mutual Funds offers higher returns as compared to investment in Fixed Deposits but is subject to market risk. Mutual Funds Investment is regulated by SEBI (Securities Exchange Board of India).
  • Other property matters concerning NRIs like title search, especially in case of agricultural properties, transfer of ownership in case of inherited properties, settling the issues related to distribution or partition of joint properties or ancestral properties, etc., all come under the purview of property law in India. 
  • Most property-related transactions can be done by NRIs either by personally visiting India or through a power of attorney.

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We have top lawyers, property lawyers, and property management companies taking care of such investments/property matters for NRIs.

The relevance of property law in India for NRIs

The property market in India offers unlimited investment opportunities for NRIs. All investments made in India should abide by the respective laws. There is no doubt that property law in India is relevant for NRIs. Ignorance of the law is no excuse. It is vital to protect and safeguard the huge amount of investments which NRIs make. There has to be clarity of rights and government policies. NRIs need to remain updated on property law in India.

For any investment in property by NRIs, property laws, TDS rules, and tax implications go hand in hand. NRIs must be aware of the tax implications of all the property transactions they wish to undertake. Rules and regulations under FEMA have to be followed. It is imperative to comply with all the legal formalities to avoid any dispute later on.

Property Management Companies help NRIs to manage their property in India while staying in their native place.

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NRIs face many questions when it comes to property-related transactions in India. Some of the most common queries are:

Experts in the legal and financial field, including property lawyers, are available to assist NRIs in understanding the property law in India and helping them sail through the process.

Property law in India for daughters

Property law in India for daughters

The property laws for daughters and sons were different until the Hindu Succession Act, 1956, but were amended in 2005. Earlier, the sons had complete power over the father’s property. Daughters enjoyed the property right only till they got married. After marriage, a daughter was considered a part of her husband’s family.

Hindu Undivided Family (HUF)

Under the Hindu law, a HUF is a group including more than one person, all lineal descendants of a common predecessor/ancestor. The term HUF is supposed to apply to by people of Hindu, Jain, Buddhist, or Sikh faith. Currently, the laws keep the daughters in consideration and take care of their interests too.

Laws favouring daughters in their fathers’ properties:

Daughters’ rights in Hindu Succession Act, 2005

  • Earlier when a daughter got married, she discontinued being part of her father’s HUF which was seen by many as curtailing women’s property rights.
  • On 9/9/2005, the Hindu Succession Act, 1956, which governs the transference of property among Hindus, was altered.
  • According to the above Act, every daughter, whether married or unmarried, is now considered a member of her father’s HUF. She can even be appointed as ‘karta’/manager of father’s HUF property.
  • The amendment now provides for such laws that give daughters the same rights, duties, disabilities and liabilities that were earlier limited to sons.
  • However, a daughter can avail the benefits granted by the amendment only if her father passed away after 9/9 2005.
  • Moreover, the daughter is eligible to be a co-sharer mainly if the father and the daughter were alive on 9/9/ 2005.
  • Equal right to be coparceners
  • A coparcenary includes the eldest member of a family and three generations.
  • Earlier, it was said to include a son, father, a grandfather, and a great-grandfather.
  • Now women of the family can be a coparcener as well.
  • The coparceners obtain a right by birth over the coparcenary property.
  • A member of the coparcenary can further sell his /her share in the coparcenary to a third party.
  • A coparcener can file a suit asking partition of the coparcenary property but not a member.
  • Thus, a daughter, as a coparcener, can now demand the partition of her father’s property/business/house.

Muslim Law

Quranic laws of inheritance are extraordinarily specific. As per Muslim Law, daughters have right to maintenance and shelter in their parent’s house till they get married. Under Muslim law, both Sunni and Shia, a daughter is entitled to succeed to the property of the parents, yet there are customs and statutes, the operation of which excludes a daughter from inheritance. Such customs and statutes are treated as valid and daughters as non-existent at the time of opening of the succession.

Christian Law

According to Christian Law, a daughter inherits equally irrespective of the fact whether she has siblings or not. She also has the complete right to the personal property upon attaining majority.