I am an overseas citizen with OCI (overseas citizenship of India) card. For the past few years, I have been living in India for tax purposes. I want to transfer money from my overseas accounts to buy a property in India. However, I want to buy it in the name of my son who is also a foreign citizen with OCI card, but lives abroad. Can I do that though the money will be used for the same from my bank account in India. If my son is unable to travel to India, he will give me a power of attorney (POA) which will be verified at the Indian consular office in the city where he lives.
— Name withheld on request
Even though you are a foreign citizen holding an OCI card, assuming you are resident in India for the required number of days, you will be entitled to be a tax resident in India. In addition, depending on your intention, you would also qualify as a resident for the purpose of FEMA (Foreign Exchange Management Act).
If your son was living similarly, you would be allowed to buy immovable property in India in your son’s name. This could even be done through a separate POA given in your favor to purchase the proposed property in your son’s name. Further, this transaction will only be treated as a benami transaction under beami laws since the source of payment is established. However, since your son is a non-resident, this transaction would not be permitted under FEMA where you are making a payment for acquiring property in his name.
Alternatively, you can gift the money to your son and let him get it in his name or you can get the immovable property in India first in your name and gift it to your son later that. Both are FEMA approved transactions.
Harshal Bhuta is a partner at PR Bhuta & Co Chartered Accountants
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Updated: 21 November 2023, 12:00 AM IST
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