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V Nagarajan: No authoritative permission required for joint investment in India
February 10, 2019
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Exclusive to The Gulf Today

I am planning to invest in a project with my brother residing in India. Does it require permission from the authorities?  Can I gift the property to him at a later date?  Please clarify. Umesh, Sharjah.
You can invest in joint name with your brother in India except in agricultural land, plantation property and farmhouse. There is no need to obtain permission from any authorities provided the funds from abroad are remitted by inward remittance or the investment is made out of funds held in NRE account maintained in accordance with the provisions of FEMA.   

Gifting your share in the property to your brother or any other person who is an Indian citizen is permissible. But in case if you wish to sell the property you may be allowed to repatriate the sale proceeds out of India. The amount to be repatriated cannot be more than the amount received as inward remittance at the time of purchase. 

My father passed away recently and earlier nominated my mother for the property. Unfortunately my mother also died recently without making any Will nor nominated anyone in the family to succeed her. We are two brothers. How do we go about the succession issue? Sharan Gouda, Dubai.
In the absence of any Will, both of you are legally entitled to a share in your mother’s property.  You can file a suit for letters of administration before the Civil Court towards administering the property and later on to divide the same between the two brothers.

I booked a commercial space of 100 sqft on the ground floor with a developer in Pune and paid substantial money but it is almost two years now. There is no progress at the site and on repeated persuasion the developer has returned a partial amount. What is the remedy available under the law now? Rajesh Bhatnagar, Abu Dhabi.
It is necessary for you to investigate whether your builder has taken any permission from the appropriate authorities. If not, you may be entitled to file a criminal case against the builder for criminal breach of trust. In any case you are entitled to a refund with interest. It is better to ascertain the entire issue and ascertain the root cause for the inordinate delay in delivery before plunging into any action against the developer. 
At a time when the real estate sector is gradually recovering from a plethora of reforms, the Union budget for FY20 announcements came in handy for the sector to gear up for a turnaround in development. Taking into account a tax payer availing full benefit of Rs1.5 lakh available as a deduction, a gross income of upto Rs.6.5 lakh may not attract any tax at all. In other words, the government is putting more income in the hands of consumer for spending. 
For home owners of second house, who were subjected to notional rent though no rent was received, the concept of notional rent has been done away with from next fiscal (starting April 1, 2019). It is a double bonanza for people with home loan on the second house. 
Now the benefit of capital gains under section 54 of the Income Tax Act to Rs 20 million from investment in one residential house to two residential houses. The indexation benefits are available. However, this option can be exercised once in a lifetime. 
It should be noted that the long-term capital gain from sale of residential property will become tax free if the sale proceeds are also invested in a small or medium enterprise in the manufacturing sector. The duration is six months from the date of transfer of assets within which investment can be made anytime. 
Tax Holiday benefits under section 80-IBA on profits of affordable housing projects with housing units upto 60 sqm carpet area is proposed to be extended for all projects approved on or before March 31, 2020 as against the earlier norm of projects approved on or before March 31, 2019.
Moreover, developers can get exemption from unsold inventory for two years after the completion of the projects as against the existing norm of one year.  This will help them not to pay tax on notional rent on their unsold inventory after one year of completion of residential projects.

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The author is a business analyst
covering Indian property markets

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