As a law firm, we would like to provide our informed opinion with regards to Section 2(j) of the Real Estate (Regulation and Development) Act, 2016 which defines “non-resident Indian” as an individual who is a citizen of India or a person of Indian origin and holds a passport issued by any other country. The significance of this definition cannot be overstated, especially in light of the growing number of Non Resident Indians (NRIs) engaging in real estate transactions within India.
The term ‘Non-Resident Indian’ has been central to several legal issues involving property rights and repatriation laws in India. This is primarily due to the fact that NRIs fall under different categories based on their status as citizens or persons of Indian origin residing outside India. Given these complexities, it is important for NRIs and property developers alike to understand how Section 2(j) affects them.
One provision closely linked with NRI investment in real estate pertains to the right-to-property guaranteed under Article 300A of the Constitution. This article ensures that every person has the right to acquire, hold and dispose off property within India. However, complications arise when NRI buyers face issues such as title defects or encumbrances created after they purchased land/property from resident sellers within India.
In this context, case laws can provide us valuable insights into how courts have interpreted various provisions affecting NRI investors. One such case was Kewal Krishan Chopra v Union Of India & Ors which highlighted how NRIs were not entitled to claim exemption from payment of taxes during repatriation proceedings if their income arose solely from investments made abroad instead of business carried out in foreign countries. Similarly another landmark case Mohmad Yusuff Abba Sayeed v State Of Gujarat And Ors established how NRIs were eligible only for relief against double taxation while claiming tax refunds from foreign governments.
Moreover, recent amendments to the Foreign Exchange Management Act, 1999 (FEMA) have extended provisions concerning NRI investments in real estate. For instance, Reserve Bank of India has permitted NRIs to purchase immovable property or properties from resident Indians through inheritance or otherwise as a gift, without any prior approval from RBI. Similarly, an amendment in FEMA Regulations allows NRIs to make remittance towards payment for residential accommodation up to $1 million within India.
In conclusion, Section 2(j) of the Real Estate (Regulation And Development) Act is crucial for understanding how Non-Resident Indians are defined and categorized under Indian law with regards to their rights in acquiring and holding property within India. Therefore we advise NRI clients seeking legal support on such matters should ensure that they engage experienced lawyers with adequate knowledge of relevant laws such as FEMA regulations and case precedents which greatly influence judicial opinions on these issues.