Ms. Rose was an Indian citizen who got a job in a software company in USA. She went to USA and stayed there for 12 years. During her stay, she…

(i) Can Ms. Rose purchase the house in USA and continue to retain it even after returning to India? According to section 6 (4) of the Foreign Exchange Management Act, 1999, (the Act) a person resident in India may hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India. Ms. Rose stayed in USA for 12 years, hence she must have become a non-resident for those years. She purchased a house during this time. As per the above provisions, Ms. Rose can rightfully purchase the house in USA and continue to retain it after returning to India. (ii) Can Ms. Rose purchase another house in USA after returning to India? Ms. Rose deposited the amount of rent from the house to her account in USA. Out of that amount she purchased another house in USA after returning to India. Ms. Rose is a person resident in India due to joining an employment in India. As per section 6 (4) (iv) of the Foreign Exchange Management Act, 1999 (FEMA), a person resident in India may freely utilize all their eligible assets abroad as well as income on such assets or sale proceeds thereof received after their return to India for making any payments or to make any fresh investments abroad without approval of Reserve Bank, provided the cost of such investments and/or any subsequent payments therefor are met exclusively out of funds forming part of eligible assets held by her and the transactions is not in contravention to extant FEMA provisions. In view of the above, Ms. Rose can rightfully purchase another house in USA after returning to India.