Gifting A Mohali Property From Abroad: Who Can Receive It Under India's Foreign Exchange Rules विदेश से मोहाली की संपत्ति गिफ़्ट करना: भारत के विदेशी मुद्रा नियमों में इसे कौन ले सकता है ਵਿਦੇਸ਼ ਤੋਂ ਮੋਹਾਲੀ ਦੀ ਜਾਇਦਾਦ ਦਾ ਤੋਹਫ਼ਾ: ਭਾਰਤ ਦੇ ਵਿਦੇਸ਼ੀ ਮੁਦਰਾ ਨਿਯਮਾਂ ਤਹਿਤ ਇਹ ਕੌਣ ਲੈ ਸਕਦਾ ਹੈ

Many families with a house or plot in Mohali have one member living in Canada or Britain who owns it on paper. A common plan is for that owner to hand the property to a brother in Mohali or to a grandchild who has just moved to Toronto. A resident owner giving a flat to a resident sister deals only with the gift deed and the sub-registrar. An owner who lives abroad has a second set of rules to clear first. Those rules sit in India's foreign exchange law, and they decide who is allowed to receive the gift at all.

This piece explains how those rules sort the people an owner abroad might want to give a Mohali property to. It also explains how they sit alongside Punjab's own stamp duty concession for family gifts, which answers a different question.

The rule that governs the gift

The foreign exchange rules for property bought or held by Indians abroad are in the Foreign Exchange Management Non-debt Instruments Rules of two thousand and nineteen. Chapter nine of those rules deals with immovable property. Rule twenty four sets out what a non-resident Indian, or NRI, and an Overseas Citizen of India cardholder, or OCI, may do with property in India.

Two clauses of that rule matter for a gift made by an owner abroad. Clause d says an NRI or OCI may "transfer any immovable property in India to a person resident in India". Clause e says an NRI or OCI may "transfer any immovable property other than agricultural land or farm house or plantation property to an NRI or an OCI".

A third clause looks at the same gift from the other side. Clause b lets an NRI or OCI "acquire any immovable property in India other than agricultural land or farm house or plantation property by way of gift" from a giver who lives in India or abroad, but only where the giver "in any case is a relative" as the Companies Act of two thousand and thirteen defines that word.

A gift to someone who lives in India

The simplest case is a gift to a person who lives in India. Clause d covers it, and it carries no relative test and no exclusion for farmland. On the rule's wording, an owner in Canada may give a Mohali flat to a resident nephew or a resident friend. The same clause covers a gift of agricultural land on the edge of Mohali to a resident.

The foreign exchange rules therefore add little to a gift that stays inside India. The deed and its registration are where the work lies.

A gift to someone who also lives abroad

The picture changes when the person receiving the gift also lives outside India. That person is acquiring property in India as a non-resident, so clause b applies to them. Clause b allows a gift only between relatives as the Companies Act defines them.

The Companies Act list is narrow. Section two of that Act counts husband and wife as relatives, along with members of one Hindu undivided family. It leaves the remaining relationships to the rules. Rule four of the Companies rules on definitions then lists father, mother, son, son's wife, daughter, daughter's husband, brother and sister, with stepfathers, stepmothers, stepsons, stepbrothers and stepsisters included.

Several close family members fall outside that list. A grandchild is not on it. Nephews and nieces are missing too, and so are cousins. A stepdaughter is not named either, though a stepson is. On the plain wording, an owner in Britain cannot give a Mohali flat to a grandson who is also a non-resident by relying on clause b alone.

Clause b and clause e also carry the farm exclusion. A non-resident relative cannot receive farmland or a farm house by gift, and plantation property is excluded too. Those categories can pass to a person abroad only by inheritance, which earlier pieces on this site cover.

A gift to a foreign citizen without an OCI card

Rule twenty four speaks only of NRIs and OCI cardholders. A daughter in America who holds an American passport but no OCI card is neither. The rule gives no route for her to receive a gift of Mohali property. The Reserve Bank's Master Direction on acquisition and transfer of immovable property treats other foreign citizens as needing its prior approval to acquire property in India. That point rests on the direction and was not tested against a Reserve Bank decision for this piece.

Where Punjab's stamp duty concession fits

The gift deed itself is a Punjab matter. Stamp duty on a gift of land or a house is charged under the Indian Stamp Act as Punjab applies it. Punjab gives a concession on stamp duty for certain gifts between close family members. The list of family members it covers is set by Punjab's own orders, and those orders have been revised over the years.

Two separate questions therefore arise on the same gift, and they are answered by different rules. Punjab's stamp rules decide how much duty is charged on the deed. The Companies Act list in the foreign exchange rules decides whether a non-resident may receive the property at all.

The two do not have to line up. A relative who qualifies for Punjab's concession may still fall outside the Companies Act list, and the concession on the deed does nothing to open a route under the foreign exchange rules. The question of who may receive comes first. The question of what the deed costs follows it.

The sub-registrar can confirm the current list of family members covered by the concession before the deed is drawn up. The sub-registrar applies the Punjab text in force on the day of registration.

How the deed is made when the donor is abroad

Indian law sets a strict form for any gift of immovable property. Section one hundred and twenty three of the Transfer of Property Act requires that the transfer be "effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses". Section one hundred and twenty two adds a condition of acceptance during the lifetime of the donor, while the donor can still give.

An owner abroad has two ways to sign. The first is to sign the gift deed personally overseas and send it to Mohali for registration. The rules on deeds signed outside India then apply, and an earlier piece on this site describes them. The second is to sign a power of attorney that lets an agent in India sign on the owner's behalf. A gift is a serious step, and the power has to cover it clearly.

Registration takes place at the sub-registrar's office for the area where the property lies.

A GMADA plot or flat as a gift

Many Mohali properties were allotted by GMADA, and some are still held on allotment terms. A gift of such a property needs GMADA to record the new owner as well as the sub-registrar. GMADA's transfer rules are separate from the foreign exchange rules. They apply whether the donor lives in Mohali or abroad. A property still held under a letter of intent or an allotment letter may need GMADA's permission before any transfer, and that check comes before the gift deed.

What the rules leave open

The foreign exchange rules say who may receive a gift. They say little about the paperwork a bank or a sub-registrar may ask an owner abroad to show. They also do not cover the income tax side of a gift, which is outside the scope of this piece. Rule twenty four does not say how the relative test is proved. In practice the deed and the identity papers of both sides usually carry the relationship.

The rules also assume the owner abroad acquired the property lawfully in the first place. A gift cannot cure a purchase that broke the foreign exchange rules at the time it was made.

The short answer

An owner living abroad can give a Mohali home or plot to anyone who lives in India. A gift to someone who also lives abroad works only within the Companies Act list of relatives, and never for farmland. Punjab's stamp concession for family gifts is a separate matter, so a lower duty on the deed says nothing about whether the gift is allowed.

Related reading

- A Mohali sale deed signed abroad: how the Registration Act treats a deed executed outside India
- Inheriting a Mohali property while living abroad: what India's foreign exchange rules allow

Sources: The sources we use are listed on our Editorial Sources page.

This piece describes the published text of India's foreign exchange rules as they apply to gifts of Mohali property by owners living abroad. Nothing here is legal or tax advice, and any gift turns on its own papers and facts.