Immovable properties & portfolio invt

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Immovable properties & portfolio invt

  1. 1. CITC – Seminar on Taxation & FEMA aspects of NRIs Presented by: Mr. Paresh P. Shah P.P. Shah & Associates Chartered Accountants Email: paresh@bom3.vsnl.net.in
  2. 2. Overview of Presentation Acquisition and Transfer of Immovable Properties Acquisition and Transfer of Immovable Properties in India Acquisition and Transfer of Immovable Properties outside India Investment in Real Estate Developments by NRIs Investment in Real Estate Developments by Foreigners Portfolio investments by NRIs, in securities of Indian company
  3. 3. Acquisition & Transfer of Immovable Properties in India NRIs/PIOs – Definition PIOs differently defined under regulations 20 & 21 Prohibitions Acquisition & Transfer of agricultural/ plantation/ farm house Acquisition & Transfer of other properties Acquisition & Transfer by way of sale/ gift/ inheritance distinguished Contd…
  4. 4. Definition of NRI – FEMA 5 NRI Who is citizen of India Whose spouse is a citizen of India Who held Indian Passport at any time Whose father, grand father, mother or grand mother was citizen of India Whose spouse held Indian Passport or whose spouse’s parents or grand parents were citizen of India
  5. 5. Definition of PIO – FEMA 5 PIO Who is citizen of India Whose spouse is a citizen of India Who held Indian Passport at any time Whose father, grand father, mother or grand mother was citizen of India Whose spouse held Indian Passport or whose spouse’s parents or grand parents were citizen of India
  6. 6. Definition of PIO – FEMA 21 PIO Who is citizen of India Whose spouse is a citizen of India Who held Indian Passport at any time Whose father, grand father, mother or grand mother was citizen of India Whose spouse held Indian Passport or whose spouse’s parents or grand parents were citizen of India
  7. 7. Regulated Activities - Comprehensive inheritance from PROI/PRII 4(c) No Note 1 Agricultural Land Sale to PRII Gift to NRIs, PIOs & PRII 4(d) 4(f) Gift, sale & inheritance to NRIs, PIOs & PRII Other Land Mentioned only in case of acquisition & not in case of transfer specifically referred for transfer Inheritance Sale & gift to PRII who is Indian Citizen-No inheritance 4(e) Sale, gift & inheritance to PRII only 3(b) Note 2 Agricultural Land Transfer 5(a) Purchase Inheritance Gift from NRIs, PIOs & PRII 4(a) 4(c) 4(b) Yes 3(a) Other Land In case of Branch office or other place of business, Form IPI has to be filed with RBI within 90 days Diplomatic offices of Foreign Government 5 Acquire PROI (All) Reg PIOs Reg NRIs Reg
  8. 8. Acquisition & Transfer of Immovable Properties in India…………….. Contd. Acquisition by private companies incorporated outside India having offices in India Housing Loans Repatriation PROI – NRIs & PIOs PROI with office in India Repatriation limited to amount invested Residential & Commercial properties distinguished No Repatriation for Agricultural/plantation/farm house Issues & interpretations
  9. 9. Acquisition & Transfer of Immovable Properties outside India Legal Framework Non-Applicability Permitted Residents & conditions Acquisition & Transfer regulations Acquisition by private companies incorporated in India having offices outside India Housing Loans
  10. 10. Investment in Indian companies in real estate sector Legal framework Definition of NRIs Permitted activities Investment by Foreign companies wholly owned by NRIs NRI & its investments – Meaning distinguished NRI investment under the Government Policy
  11. 11. Portfolio investments by NRIs Legal framework Meaning of Portfolio Investment Portfolio investment under FEMA Designated Authorised Dealer Delivery basis Overall limits of investments 5% of paid up capital or 5% of each series of convertible debentures for each NRI 10 % of paid up capital or 5% of each series of convertible debentures for all NRIs together Upto 24% of paid up value by special resolution Contd…
  12. 12. Portfolio investments by NRIs… Transfer of shares rule & Portfolio investment Regulation 9 & 10 of Notification 20 Circular No. 16 dt. 4 th Oct.’04 Form TS1 Issue of shares under IPO Repatriation of Capital & Profits Credit to NRE a/c – Each credit & procedure Remittance vs. credit to NRE a/c Issues
  13. 13. Thank You
  14. 14. Permitted Activities Development of serviced plots and construction of built up residential premises Investment in real estate covering construction of residential and commercial premises including business centers and offices Development of townships City and regional level urban infrastructure facilities, including both roads and bridges Investment in manufacture of building materials, which is also open to FDI Investment in participatory ventures in activities mentioned above Investment in housing finance institutions, which is also, open to FDI as an NBFC.Notification FEMA 20/2000 – RB dt.3 rd May 2000.

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