Acquisition/Transfer of Immovable property under FEMA are subject to the applicable tax laws in India

RBI has issued RBI/2014–15/307 A.P. (DIR Series) Cir­cu­lar No. 38 on Novem­ber 20, 2014 regard­ing Acquisition/Transfer of Immov­able prop­er­ty under FEMA and clar­i­fied that Acquisition/Transfer of Immov­able prop­er­ty under FEMA are sub­ject to the applic­a­ble tax laws in India.

Atten­tion of Autho­rised Deal­ers in For­eign Exchange is invit­ed to For­eign Exchange Man­age­ment (Acqui­si­tion and Trans­fer of immov­able prop­er­ty in India) Reg­u­la­tions, 2000 noti­fied vide Noti­fi­ca­tion No. FEMA 21 /2000-RB dat­ed 3rd May 2000 as amend­ed from time to time.

2. It has been observed that doubts per­sist in the mem­bers of pub­lic regard­ing require­ment of pay­ment of tax­es while under­tak­ing prop­er­ty trans­ac­tions under these regulations.

3. In this con­nec­tion, it is clar­i­fied that trans­ac­tions involv­ing acqui­si­tion of immov­able prop­er­ty under these reg­u­la­tions shall be sub­ject to the applic­a­ble tax laws in India.

4. Reserve Bank has since amend­ed the Prin­ci­pal Reg­u­la­tions through the For­eign Exchange Man­age­ment (Acqui­si­tion and Trans­fer of immov­able prop­er­ty in India) (Amend­ment) Reg­u­la­tions, 2014 noti­fied vide Noti­fi­ca­tion No. FEMA.321/2014-RB dat­ed Sep­tem­ber 26, 2014 c.f. G.S.R. No. 733(E) dat­ed Octo­ber 17, 2014.

5. Autho­rised Deal­ers may bring the con­tent of this cir­cu­lar to the notice of their con­stituents concerned.

6. The direc­tions con­tained in this cir­cu­lar have been issued under Sec­tion 10(4) and 11(1) of the

For­eign Exchange Man­age­ment Act (FEMA), 1999 (42 of 1999) and are with­out prej­u­dice to permissions/approvals, if any, required under any oth­er law.

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