The term Transfer has a very wide scope under the laws in India. It has been defined differently under separate laws. Transfer can be of various types. A few of the aspects of transfer as explained under Indian laws are described below.
Section 5 of the Transfer of Property Act, 1882 defines the transfer of property, as an act by which a living person conveys property in present or in the future to one or more other living persons or himself and one or more living persons. Under section 6 of the act, any kind of property can be transferred except for the ones mentioned under this section.
An NRI can transfer any immovable property in India to a person residing in India under subsections 3, 4, 5, of section 6 of the Foreign Exchange Management Act, 1999. He may transfer any immovable property (other than agricultural property) to an Indian citizen resident outside India or a PIO resident outside India.
Section 2(ze) of the Foreign Exchange Management Act, 1999 (FEMA) Act also defines transfer. The definition includes leases, sale, purchase, exchange, mortgage, pledge, gift, loan, or any other form of transfer of right, title, possession or lien. FEMA (Acquisition and Transfer of Immovable Property in India) regulations, 2018, was notified by RBI on March 26, 2018.
Rule 5 of the regulation says that a foreign Embassy or Diplomats or Consulate-General may purchase or sell Immovable property in India other than agricultural land or plantation property or a farmhouse if clearance from Government of India, Ministry of External Affairs is obtained for such sale or purchase. Rule 11 of the said regulation says that any transaction involving the acquisition or transfer of immovable property under these regulations shall be undertaken through banking channels in India and should be subject to payment of applicable taxes and other duties in India.
FEMA states that a foreign national resident in India can acquire immovable property in India. This applies to individuals of all countries except Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka, Afghanistan, China, Iran, Macau, Hong Kong or the Democratic Peoples’ Republic of Korea who require prior approval from the RBI.
An office, branch or any other establishment of a business of a foreign company in India, acquiring all the approvals is allowed to buy immovable property in India. The property must only be used for business purposes and all the laws and regulations in force are applied to it. But the persons from the countries mentioned above need to take permission from the RBI to acquire such property for a period extending 5 years.
Similarly, a foreign company for the purpose of establishing a branch office or any place of business in India as per FERA or FEMA regulations can acquire real estate in India. If the foreign company has established a liaison office they are not allowed to acquire immovable property in India. In such cases, liaison offices can acquire the property by way of the lease only, not exceeding for 5 years.
Under section 2(47) of the Income Tax Act, 1961, transfer in relation to a capital asset, includes the sale, exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law.
In other words, we can say that transfer is the movement of assets, monetary funds and ownership of rights from one account to another. The transfer may require an exchange of funds when the change of ownership is in process.
The term transfer may also refer to the movement of an account from one bank to another. Banking brokerage, cryptocurrency, assets titles and loan transfer are a few examples of domains and transaction types where the transfer occurs.
Transfer is a broad term that has a vast scope among various industries and transaction types. Banking transfers can be defined as when an account holder moves funds from one account to another account. The transfer does not have to be within the same bank. Within the banking industry, funds can also be transferred cross-border through wire transfer from a domestic account to a foreign account and vice versa.
Brokerage transfers are defined as when investors normally transfer funds and assets from within or outside their brokerage accounts. An investor, who needs to fund his investment account to purchase more shares, may choose to make the transfer from another investment account held with the same or another broker. Most assets like company stock, bonds, certificates of deposit and mutual funds can be transferred from one investment account to another.
In the crypto economy, funds and cryptocurrencies are transferred frequently between users to a public address where the funds can be accessed with a private key unique to each separate user. When goods and services are traded the buyer would transfer from his holdings to the seller’s digital address. Cryptocurrencies can also be transferred from one cryptocurrency exchange to another exchange where they are deposited in an account also held by the sender or any other person that the seller is gifting or transacting with.
Tittles on assets like cars, land and homes can also be transferred if is sold or gifted to an individual or corporation. While selling, a landowner can transfer his title to a person or a corporation. Ownership transfer can be required to sell the land, gift it or by way of a will, the title to a beneficiary following a court order or foreclosure due to bankruptcy.
Loans can also be transferred. A homeowner with a loan can transfer the mortgage to someone else say a buyer if he is qualified for the concerned loan. This can be beneficial for both parties in the transaction.
