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CS Executive · Setting Up of Business, Industrial and Labour Laws · Setting up of Business outside India and Issues Relating thereto

Arjun, resident in India, inherited a flat in Dubai from his uncle, who was resident outside India. Under Section 6 of FEMA, what is the position of Arjun holding the flat?

Arjun may hold, own, transfer or invest in the Dubai flat. Section 6(4) of FEMA allows a resident in India to do so for foreign property inherited from a person resident outside India, so no approval or surrender is needed.

  1. AHe may hold, own, transfer or invest in it, as it was inherited from a person resident outside IndiaCorrect
  2. BHe must surrender it to the Reserve Bank within thirty days
  3. CHe may hold it but cannot transfer it
  4. DHe needs Central Government approval to hold it

Explanation

Section 6(4) permits a resident in India to hold, own, transfer or invest in foreign immovable property if acquired or held when resident outside India, or inherited from a person resident outside India. The flat was inherited from a non-resident, so no surrender or approval is required.

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