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CA Intermediate · Corporate and Other Laws · The Foreign Exchange Management Act, 1999

Anita, a resident in India, inherited immovable property situated in Singapore from her father who was resident outside India. Under FEMA, 1999, what is the correct position about her holding this property?

Anita can freely hold, own, transfer or invest in the Singapore property. FEMA permits a resident in India to hold immovable property abroad that was inherited from a person resident outside India, so no forced sale, government approval or change of residential status is required.

  1. AShe must sell the property within 90 days of inheritance
  2. BShe is not restricted from holding, owning, transferring or investing in the foreign property because she inherited it from a person resident outside IndiaCorrect
  3. CShe may hold it only with the prior approval of the Central Government
  4. DShe may hold it only if she becomes a non-resident

Explanation

FEMA states that a person resident in India may hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if it was acquired, held or owned when the person was resident outside India, or inherited from a person resident outside India. The inheritance from her father fits this, so no sale, approval or change in residence is needed.

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