Can I buy property on behalf of my NRI son?
—Name withheld on request Though you are a foreign citizen having OCI card, assuming that you have been residing in India for the requisite number of days, you will be eligible to become a tax resident in India. Further, depending upon your intention, you would also qualify as resident for the purpose of Fema (Foreign Exchange Management Act). Had your son been a resident similarly, you would have been allowed to purchase an immovable property in India in the name of your son.
This would have been possible even through a specific POA given in your favour for the intended property to be purchased in the name of your son. Further, this transaction would also not be treated as a benami transaction under the benami 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 the payment for acquisition of property in his name.
Alternatively, you may gift the money to your son and let him acquire in his name or you may first acquire the immovable property in India in your name and thereafter gift it to your son. Both are permissible transactions under Fema. Harshal Bhuta is partner at P.R. Bhuta & Co. Chartered AccountantsMilestone Alert!
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