Can NRIs acquire or dispose of residential property by way of gift?
An NRI can freely sell or gift his/ her property to another Indian resident or NRI or person of Indian origin. However, there are certain restrictions imposed on repatriation of sale proceeds. In case of investments made from inward remittances or out of NRE account or FCNR account (B), the repatriation of sale proceeds is permitted only upto the amount of initial investment. In case the repatriation is made out of balances held in NRO rupee account (balances include sale proceeds of house property), then an amount of USD one million per calendar year can be repatriated subject to the condition that the property is held for 10 years prior to the date of sale. If the property is not held for 10 years, then the proceeds should be kept in the NRO account/ eligible investments for the balance period. One of the significant restrictions that is placed on repatriation is that the NRI can repatriate the sale proceeds only upto two residential properties. This could dampen the interest of NRIs
