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CS Executive · Economic, Commercial and Intellectual Property Laws · Overseas Direct Investment

Ramesh moved abroad, became a person resident outside India, and bought a flat in London. He later returned and became a resident in India while still holding the flat. Under section 6 of FEMA, 1999, what is his position about the flat?

Ramesh may hold, own, transfer or invest in the London flat. Section 6(4) permits a resident in India to do so for foreign immovable property acquired or held when he was resident outside India, or inherited from a person resident outside India.

  1. AHe must sell it immediately because a resident cannot hold foreign immovable property
  2. BHe may hold, own, transfer or invest in it, as it was acquired when he was resident outside IndiaCorrect
  3. CHe may hold it only with prior approval of the Adjudicating Authority
  4. DHe may hold it only if it is converted into Indian currency

Explanation

Section 6(4) lets a person resident in India hold, own, transfer or invest in foreign currency, security or immovable property outside India if it was acquired, held or owned while he was resident outside India, or inherited from such a person. The flat meets this test, so no forced sale is needed.

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