Legal and Regulatory
Effective Date: 2026
1. Brief Overview - RealDeed India
Jurisdiction: Republic of India (All States & UTs)
Language: English (Authoritative Version)
RealDeed India is WOS (Wholly Owned Subsidiary) of RealDeed Proptech (DIFC) Ltd Dubai which is Incorporated under the laws of Dubai International Financial Centre and PropPass is a registered product of RealDeed for Fractional Ownership and Tokenized Assets. We as platform facilitating investment in immovable property situated within the territory of the Republic of India. The platform enables eligible investors to acquire, hold, and trade fractional beneficial interests in Indian real estate assets through the Special Purpose Vehicle SPV/LLP.
RealDeed facilitates the tokenization of real estate assets by converting immovable land (measured in square metres) into digital fractional ownership units known as PropPass®, structured through a Special Purpose Vehicle (SPV).
Each PropPass® represents a legally enforceable beneficial interest in the underlying SPV that holds the property. The platform integrates property title verification mechanisms, including validation through the National Generic Document Registration System (NGDRS) and other official land registry records, to ensure authenticity and transparency.
Accordingly, Indian properties with clear and verifiable title records may be acquired through an SPV structure and subsequently tokenized based on defined land area allocation.
2. Key Definitions
The following terms shall have the meanings set out below throughout this document and all associated platform agreements and offering documents:
PropPass
A Digital Share/Token digitally recorded unit of beneficial interest in an SPV holding Indian immovable property, issued and managed through the platform's compliant digital infrastructure.
Tokenized Asset
Immovable property situated in India whose ownership or beneficial interest has been fractionalized and digitally recorded in accordance with applicable frameworks.
Fractional Ownership
Proportional, undivided beneficial interest in an immovable property asset corresponding to the number of PropPass Units held relative to total units issued for a given scheme.
SPV (Special Purpose Vehicle)
A private limited company or LLP incorporated in India under the Companies Act, 2013, formed solely to hold a specific property asset and issue fractional interests to investors.
NGDRS National Generic Document Registration System - Department of Land Resources The system follows a "One Nation, One Software" concept to standardize the property and document registration process across various Indian states and Union Territories
RERA
Real Estate (Regulation and Development) Act, 2016 — the central legislation governing real estate projects and agents in India, administered by respective State/UT Real Estate Regulatory Authorities.
RBI / FEMA
Reserve Bank of India / Foreign Exchange Management Act, 1999 — governing body and statute regulating cross-border capital flows, NRI investment, and foreign exchange transactions in India.
KYC / AML / CFT
Know Your Customer / Anti-Money Laundering / Countering Financing of Terrorism — mandatory investor identification and monitoring obligations under PMLA 2002 and RBI/SEBI KYC Master Directions.
NRI / OCI
Non-Resident Indian / Overseas Citizen of India — categories of individuals of Indian origin residing outside India who may invest in Indian real estate subject to FEMA conditions.
Stamp Duty
State-level tax levied on the instrument evidencing transfer of immovable property or beneficial interest, governed by applicable State Stamp Acts.
TDS
Tax Deducted at Source — mandatory withholding of income tax on specified payments, including rental income and property sale proceeds, as required by the Income Tax Act, 1961.
3. Regulatory Framework & Legal Compliance
As Currently in India there is no spicif framework for direct land tokenization on blockchain but RealDeed PropPass operates within a multi-layered Indian regulatory framework. The platform's structure, offering mechanics, and investor relations are designed to comply with the following primary legal instruments:
Fractional sharein Indian real estate assets offered through the platform are structured as SPV/LLP Legal Wrapper where as Platfrom we incorproate a legal entity with spsecific articles to hold an asset and decided the revuew and economic part until unless asset is sold.
3.2 RERA Compliance — Real Estate (Regulation & Development) Act, 2016
All real estate projects and agents involved in the sale or marketing of fractional interests in under-construction or completed properties must comply with the Real Estate (Regulation and Development) Act, 2016 (RERA). Key compliance obligations include:
• Project Registration: Every real estate project with a plot area exceeding 500 sq. metres or more than 8 apartments must be registered with the applicable State RERA authority before any advertisement, marketing, booking, or sale including fractional interest sales.
• Escrow Account Compliance: For projects involving under-construction properties, 70% of amounts collected from investors must be deposited in a dedicated escrow account and used only for land and construction costs of that project.
• Disclosure Obligations: All information specified in Section 11 of RERA, including approved plans, approvals, completion timelines, and structural details, is disclosed to investors before any commitment is accepted.
• Grievance Redressal: Investors may file complaints with the relevant State RERA Authority or RERA Appellate Tribunal in case of disputes relating to the underlying real estate project cause from developer.
3.3 RBI Guidelines & FEMA, 1999 — NRI & Foreign Investment
Investment by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Foreign Nationals in Indian immovable property and fractional interests therein is governed by the Foreign Exchange Management Act, 1999 (FEMA) and RBI Master Directions.
The following conditions apply:
Investor Categor
NRI (on NRE/NRO Account)
Residential & commercial property (not agricultural land, plantation, or farmhouse)
Purchase consideration through inward remittance or NRE/NRO funds; repatriation subject to FEMA limits
OCI Cardholder
Same as NRI; subject to same restrictions on agricultural land
Same as NRI conditions; RBI general permission applies
Foreign National (Non-NRI)
Not permitted to acquire immovable property in India without RBI prior approval
Prior RBI approval required; platform restricts access pending approval
Resident Indian
Unrestricted investment in all permissible property categories
PAN mandatory; income tax compliance required
All NRI/OCI investors must route investment funds through a designated NRE or NRO bank account with an RBI-authorised bank.
The platform does not accept cash transactions.
Repatriation of sale proceeds and income is subject to applicable FEMA provisions and TDS deduction requirements under the Income Tax Act, 1961.
3.5 Companies Act, 2013 & MCA Compliance
Each Special Purpose Vehicle (SPV) holding real estate assets is incorporated as a private limited company under the Companies Act, 2013 and is administered by the Ministry of Corporate Affairs (MCA).
Compliance includes annual filing of financial statements and annual returns with the Registrar of Companies (RoC),
maintenance of statutory registers and minutes of meetings, compliance with related party transaction norms, and adherence to MCA notification requirements for any amendment to the SPV's memorandum or articles of association.
4. Token / Unit Structure & Investor Rights
This section describes the legal structure of PropPass units and the nature of rights conferred upon investors in the context of Indian law.
Ownership Structure
Each tokenized property offering is structured through an SPV incorporated in India. Legal title to the underlying immovable property is held by the SPV. PropPass units represent beneficial ownership in the SPV and confer upon unit holders the following rights:
• Pro-rata share of net rental income generated by the underlying property, distributed quarterly after deduction of property management fees, statutory levies, and applicable TDS.
• Pro-rata share of net capital proceeds upon sale of the underlying property, after settlement of all SPV liabilities, taxes, and transaction costs.
• Voting rights on material decisions of the SPV as specified in the Shareholders' Agreement / LLP Agreement, including approval of asset sale, change of property manager, and material capital expenditure.
• Access to audited annual accounts of the SPV, quarterly property performance reports, and RERA project updates (where applicable).
• Right to transfer PropPass units subject to applicable lock-in periods, stamp duty payment, and RBI/FEMA conditions for NRI/OCI investors.
Smart Contract & Digital Record-Keeping
Ownership records and transfer restrictions are maintained through a combination of Compliant digital record systems and smart contracts on a permissioned blockchain. Digital records maintained on the platform constitute prima facie evidence of ownership and are backed by physical/notarised documentation held in escrow.
5. Risk Factors
Investment in PropPass units involves significant risks specific to the Indian real estate market and regulatory environment. Prospective investors should carefully consider all of the following risks before making an investment decision.
Real Estate Market Risks
• Property Market Risk: Real estate values in India are subject to cyclical fluctuation driven by interest rate changes by the RBI, government housing policy, infrastructure development, local demand-supply dynamics, and macroeconomic conditions.
• Rental Yield Risk: Rental income from the underlying property may be lower than projected due to tenant vacancies, rent defaults, adverse market conditions, or changes in local commercial or residential real estate demand.
• Illiquidity Risk: Fractional interests in real property are inherently illiquid. While the platform facilitates secondary market transactions, there is no guarantee of a liquid market, and investors may be unable to exit at a desired time or price.
• Concentration Risk: Investment in a single property or a geographically concentrated portfolio amplifies exposure to local market conditions.
Regulatory & Legal Risks
• Regulatory Change Risk: The Indian regulatory framework for fractional real estate ownership, digital securities,, MCA notifications, RBI guidelines, FEMA, RERA, or tax laws could materially affect the platform's operations and investor returns.
• RERA Non-Compliance by Builder: Where the underlying property is part of an under-construction project, the builder's failure to comply with RERA obligations — including delivery timelines — could delay income generation or reduce asset value.
• Land Law Complexity: India's land law involves multiple overlapping central and state statutes. Certain categories of land (agricultural, ceiling-surplus, tribal) carry additional restrictions on transfer and use that could affect the underlying asset.
• Stamp Duty & Registration Dispute Risk: Changes in stamp duty rates or disputes with stamp duty authorities regarding valuation of fractional interest instruments could increase transaction costs.
Technology & Cybersecurity Risks
• Smart Contract Risk: Errors in smart contract code or protocol vulnerabilities may result in incorrect distributions, unauthorized transfers, or loss of digital ownership records. The platform commissions independent smart contract audits prior to each deployment.
• Cybersecurity Risk: The platform, SPV bank accounts, and digital wallets are potential targets for cyber-attacks, phishing, and fraud. Investors must maintain secure access credentials and report suspected breaches immediately.
Tax Risks
• Tax Regime Change: Amendments to the Income Tax Act, 1961, changes in GST applicability to real estate services, or new levies on digital securities could increase the tax burden on investors and reduce net returns.
• TDS Uncertainty: The rate and applicability of TDS on distributions, rental income, and sale proceeds for NRI investors may be affected by changes in DTAA (Double Taxation Avoidance Agreement) provisions or Finance Act amendments.
• GST on Platform Fees: Platform management fees and service charges are subject to GST at the applicable rate. Changes in GST rates or classification of services could affect the cost of investment.
6. Disclaimers & Limitations of Liability
No Investment Advice
Nothing in this document or on the RealDeed PropPass platform constitutes investment advice, legal advice, tax advice, or financial planning advice within the meaning of applicable Indian law. The platform is not a registered broker-dealer or investment advisor under the SEBI (Investment Advisers) Regulations, 2013 in relation to individual investor advice. All investment decisions should be made in consultation with a Chartered Accountant, and legal counsel familiar with your specific situation.
Forward-Looking Statements
Any projections, rental yield estimates, capital appreciation forecasts, or other forward-looking statements on the platform or in offering documents are based on assumptions that are subject to change without notice. Actual outcomes may differ materially from projections. The platform does not guarantee any specific return on investment. Past performance of any property or real estate market is not indicative of future performance.
Limitation of Liability
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE INDIAN LAW, REALDEED GROUP OF COMPANIES OR REALDEED INDIA, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, AND AFFILIATES SHALL NOT BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE LOSS OR DAMAGE ARISING FROM YOUR USE OF THE PLATFORM OR INVESTMENT IN PROPPASS UNITS.