re-post
TIMES NEWS NETWORK[ SATURDAY, MAY 14, 2005 01:04:40 AM]
MUMBAI: The Reserve Bank of India (RBI) has said that non-resident Indians and
persons of Indian origin can take abroad their share of family property in India
received by way of settlement during the lifetime of the family head. However,
in a
strange move, the RBI has said the remittance will be allowed only upon the
demise
of the settler.
On the face of it, the new norms appear to be a further liberalisation of a
measure
announced by the RBI two years ago, which allowed remittances of $1m per annum
out
of sale of assets arising out of inheritance or legacy.
This remittance was allowed subject to the production of certain documents. The
new
norms by the Reserve Bank allow NRIs to remit overseas funds they receive in
India
as a result of a family head dividing his estates among family members.
According to the RBI, this circular is intended to clarify that settlement is
also a
mode of inheritance from the parent, the only difference being that the property
under settlement passes on to the beneficiary on the death of the owner/parent
without any legal or procedural hassles and helps in avoiding inconvenience and
delay in applying for probate.
�On a review, it has been decided to extend the facility available under
legacy/inheritance to an arrangement under a �settlement� whereby the
property is passed on to the legatees during the lifetime of the owner/parent
who
normally retains a life interest in the property,� RBI said in a circular
issued to all banks and authorised dealers of foreign exchange this week.
The documents required for transferring money abroad include an undertaking by
the
remitter and a certificate by a chartered accountant in the formats prescribed
by
the Central Board of Direct Taxes.
For the purpose of allowing remittance, banks will recognise a deed of
settlement
made either by parents or close relative (as defined in Section 6 of the
Companies
Act, 1956).
The remittance facility would be available only on demise of the settler. The
RBI
has separate guidelines for SAARC countries, which will continue.
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