Pujari Sharma, a person resident outside India, has invested in four residential immovable properties under construction in Kolkata. Each property…
CA Intermediate · Corporate and Other Laws · MTP · January 2026
Pujari Sharma, a person resident outside India, has invested in four residential immovable properties under construction in Kolkata. Each property is negotiated at 2 crore, with the companies owned by builders. This amount is to be paid in two instalments as 60% on immediate basis on booking and the balance on possession of the properties. The above transaction is done by the companies owned by builders through two brokers from USA on commission basis. Pujari Sharma as per the terms and conditions remitted 60% of the amount of all four immovable properties directly to the company. Answer the following explaining the provisions of the Foreign Exchange Management Act (FEMA), 1999: (i) Whether investment by Pujari Sharma and payment of commission on this transaction is permissible?
Suggested Answer and Working Notes:
The investment in immovable properties in India by Pujari Sharma, a resident outside India, is a Capital Account Transaction which is permissible as per Schedule II of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 which permits Acquisition and Transfer of Immovable Property in India by a Person Resident Outside India. According to Schedule III to Foreign Exchange Management (Current Account Transactions) Rules, 2000, remittances by persons other than individuals shall require prior approval of the Reserve Bank of India if Commission, per transaction, to agents abroad for sale of residential flats or commercial plots in India exceeds USD 25,000 or five percent of the inward remittance whichever is more. As per the facts of the question and mentioned provisions, the following are the answers to the questions asked: (i) Yes, the investment by Pujari Sharma and payment of commission on this transaction is permissible.
Topics: The Foreign Exchange Management Act, 1999
Related Questions in this Topic
- 14. Which of the following statements is/are correct with respect to the effect of repeal of an enactment under Section ...
- 12. Radiant Pharma Limited is a public company. Three of its major shareholders Mr. Kabir, Ms. Leela, and Sunrise Holdin...
- Ms. Rashida Qureshi is an Indian national. The following events occurred in sequence: 5th April, 2025: Ms. Rashida dep...
- Apex Green Energy LLP, engaged in the business of manufacturing solar-powered equipment, has been facing severe liquidit...
- Indian real estate market has long been a cornerstone of nation's economic growth attracting not only local demand but i...