Whilst it is entirely possible for an NRI to inherit property in India (even agricultural land), the process of doing this is not so straightforward, and is often time consuming.

What Is An NRI?

First and foremost, you should gain a better understanding of what an NRI really is. What does it stand for? Well, the term NRI means a non-resident Indian. It is an Indian citizen who currently holds an Indian passport.  They may also have temporarily immigrated to another country for a period of six months or more for work, education, residence or other reasons.  If you do not fit into this category, you will not have to worry about going through additional steps to sell your inherited property. However, if you are classified as an NRI, you will have to jump through several more hoops before moving forward.

So, what hoops do you need to jump through? You’ll find out below.

Transfer the Title into your Name

If an NRI inherits a piece of property in India the very first thing you must do it get the title transferred into your name. It doesn’t matter if you are going to sell the property or keep it, you are going to have to get the title transferred into your name.

This is accomplished through a process that is known as mutation of revenue records. You will need a copy of the will to complete this process. However, acquiring the original will might be a little tough since you are located in a different country. You might be able to have a friend send you the original document or you can get a succession certificate from the local courthouse.

A succession certificate might also be necessary for the event that the will can’t be found.

Gather Documents and Get Them In Order

Once you have finally accomplished to get the title of the property transferred in your name, you will now be ready to start putting together other documents. These other documents will be required in order to legally sell the property and there will be quite a few of them. So, what documents do you need and why do you need them?

Original Purchase Agreement – The original purchase agreement is nothing more than the title of the property. By now you probably already have possession of this document and it should now be listed in your name. This document just basically shows that you are the legal owner of the property and you have the legal right to do whatever you want with the land.

Original Share Certificate – Unfortunately, you might not always be inheriting a home on a piece of property. For example, the property may be like a condo in the United States. In this situation, you are going to need what is known as an original share certificate. These documents are issued to each member of the society by the co-operative housing society. In the event that this document cannot be placed, you will have to go through the society to get a copy. This basically just states that you are the owner of said property.

No Objection Certification – If you have inherited an apartment or condo you are going to need to acquire another piece of documentation. This piece of documentation is known as a no objection certification and it is issued by the member of the society that owns the apartment complex. It basically just states that they are okay with you selling the unit.

PAN Number – As an NRI you are going to be required to get a PAN Number if the transaction is valued at more than Rs 50,000. This value is going to be less than what you would ask for any property in India, so you can pretty much guarantee that you are going to have to acquire this number.

Form Sixty – If you are unable to produce a PAN number you might be required to fill out what is known as form sixty. This form will be submitted with a registrar and it just verifies that you made the transaction and the amount that the transaction was valued at.

Acquiring A Lawyer Certification – Unfortunately, there might be certain situations when you aren’t able to produce or procure some of the above-mentioned documents. Maybe the originals are missing or you just can’t get into the country to gain access to them. This is where a lawyer’s certification can come in handy. The lawyer can help get what is known as a lawyer’s certificate. It just states that you are the legal owner of the property.

Power Of Attorney

Before trying to sell your property, you need to understand that you may not want to return to India, or may not be able to return, in order to arrange all of the necessary paperwork. If this is the case, you’re going to need someone in the country who will be willing to handle the transaction for you. Giving them a power of attorney is a good idea. Just remember that you don’t have to give them a full power of attorney. That will not be necessary for this process. However, it might be the best way to go for your situation. If you do not want to give full power of attorney, you can easily give an Admit Power Of Attorney.

In this type of situation, the NRI is allowed to remain outside of the country and their Admit PoA will take care of everything. If you select a full power of attorney, you’ll actually need to return to the country to sign the power of attorney document, which will be drafted in India.  Again, it is important to choose an attorney who is going to be trustworthy and reliable. The process of selling the property can vary significantly from one case to the next, and the complexity of the papers and documents will vary from property to property, and situation to situation.

Agricultural Land

You should also understand that NRIs might not be able to sell specific types of land. For instance, you might not be able to sell agriculture land to just anyone. This type of land can only be sold to Indian residents. With this in mind, you should figure out precisely what type of land you own and who you can sell it to. Then, you’ll be able to start working through the process of unloading the land.

Knowing The Taxes

Before doing anything else, you need to make sure that you’re aware of the tax repercussions. Selling property in India can be pretty expensive in terms of taxes. If you’re selling an immovable property and you’ve held it for 3 years, you’re going to be taxed at a rate of 20.6%. This is yet another complication for NRIs. To ensure that you get it right, it is best to make sure that the buyer is going to deduct the tax at source. Otherwise, you’ll have a big headache on your hands. Make sure that your long-term capital gains are taxed property.

As an NRI who is receiving long-term capital gains, you will not receive the basic exemption of Rs 200,000. Therefore, everything is going to be taxed, and therefore it is recommended to hire a tax consultant to advise you on all issues relating to NRI taxes on the sale of the property.

Chose A Sales Method

Once you get the necessary documents in order, you will need to determine which sales method is best for you. There are several ways for the NRI to sell inherited property in India. One of these methods involves handling the process on your own.

Of course, you must have some knowledge of the market to ensure a smooth transaction, which as an NRI you probably do not possess. So, your best option is to hire a real estate agent to oversee the process for you. There is a long list of Indian real estate agents that will gladly handle the transaction of the sale, but there will be costs involved, by way of commission payable to the agent upon a successful sale.

Depending on the real estate agency, the buyer may be required to up to a five percent of the sales’ consideration. The money is split evenly between the buying agent and the listing agent. So, if at all possible it will be in your best interest to handle the process yourself.

The benefits of hiring a real estate agency are they will do everything for you, plus, they will protect the NRI from being underpaid and potential fraudsters. The real estate agent also verifies the identity of the interested buyer to determine if they are legitimate or not. If this process is overlooked, you could be dealing with a fraudster and not even know it.

Completion of The Transaction

The completion of the transaction, also known as the process of the sale, is divided into several steps, including identifying the sale value, managing structure of the transaction, issuing an Admit Power of Attorney (POA) and  then dealing with any outstanding tax liabilities of the NRI.

At this point, an Admit POA is issued to the person representing the property owner, in this case, it is the NRI.

In India, “immovable property” sold after three years of purchase faces a 20.6 percent tax. In most cases, the buyer will deduct this amount at the source.

Work With An Attorney

There is absolutely no doubt that selling inherited property as an NRI can be very difficult, and the legal issues regarding the property in India may be complex. In fact, the process might seem impossible sometimes. Just remember that it is not. As long as you take the right steps, you’ll be able to unload the property and make a good amount of money. If you’re unable to understand those laws and need assistance along the way, you should not hesitate to hire an attorney. This is one of the best ways to get the assistance that you need so you can sell the property and make some money.

Just remember that the attorney’s fees and be pretty steep. Nevertheless, their assistance will be well worth it in the long run.

Find A Real Estate Agent

Once you’ve decided that you are going to sell your inherited property in India, you’ll want to go ahead and team up with a real estate agent. An agent is going to make a big difference. After all, selling property in any country is going to be tough. With the assistance of a real estate agent, you won’t have to worry about so much about your inherited property in India, you’ll be able to sit back and relax while the agent does everything for you. There will be some fees involved, but you shouldn’t have to pay for anything until the agent has actually finalized the sale of the property in India.

With that being said, you really risk nothing by working with a real estate agent. Be sure to find someone who you can trust. Otherwise, you’re going to miss out and you might not be able to get the right price for your home. Thankfully, India is full of plenty of amazing real estate agents and they’ll be happy to help NRIs just like you.

Conclusion

If you’re an NRI who has inherited property in India, you need to realize that it can be a lengthy and stressful process. Nevertheless, the process is not impossible, provided you seek professional advice, in the form of a reputable real estate agent and legal adviser.  Provided