Things NRIs Should Keep In Mind While Buying Property in India

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Owning a house in India as an NRI can be very
close to their hearts and also help them stay
connected to their roots and culture. Hence it is
not a wonder that a non-Indian resident wants to
buy a property in India. The Indian real
estate sector has really seen a price correction
in recent years and now it is easier and more
favorable to buy a property in India with
favorable currency rates. Just because you moved
to another country doesnt mean that you stop
buying residential property in India. NRIs play
a vital role in Indian real estate over the past
years. Seeing all the rules and regulations
involved in the process one might assume it is
very difficult to buy a property as an NRI. The
NRI investments in buying a property in India
will rise by 12 in the near future costing up to
14.9 billion dollars. Moreover, NRIs can even
apply for home loans to bridge their funding
shortfall. This particular article will help you
simplify the process and get a better
understanding.
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Propertys Nature Apart from agricultural lands
and farmhouses, an NRI can buy any immovable
property in India. To invest in any agricultural
land the NRI should get approval from the RBI and
the government. Taxation The TDS (tax deducted
at source) calculation takes place when an NRI
sells a property in India. This is done at the
rate of 20.6 on long-term capital gains and
30.9 on short-term capital gains. Selling a
property within the time limit of 3 years then it
is called short-term capital gain and selling the
property after 3 years is called long-term
capital gains where taxes are applicable. NRI
buying property in India is even offered certain
tax benefits. Home Loan Banks and housing
finance companies registered with the National
Housing Bank have been given permission by the
RBI to offer loans to NRIs to buy a residential
property in India. The loans are sanctioned in
Indian currency and are said to be repaid in
Indian currency as well. The loans can be repaid
using funds in an NRIs NRO/NRE account or FCNR
deposits. The loan amount however cannot be
credited directly into the bank account of an NRI
due to the rules and regulations.
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Power Of Attorney (POA) NRIs residing outside
India have the opportunity to give their power of
attorney (POA) to their friends or relatives to
complete the process of property purchase in
India. This means the NRI can choose someone who
is close to them (i.e., friends or relatives) to
complete the transaction on their behalf. FEMA
(Foreign Exchange Management Act) Buying property
in India has become a lot easier now for the
NRIs because of the foreign exchange act (FEMA)
initiated by the Reserve Bank of India. An
Indian-originated person or NRI as defined under
FEMA is eligible to buy any immovable property in
India other than agricultural land/plantation
property. However, no person who is a citizen of
Pakistan, Bangladesh, Sri Lanka, Afghanistan,
China, Iran, Nepal, or Bhutan is allowed to
acquire or transfer any immovable property in
India other than a lease that is not exceeding 5
years without prior permission from the Reserve
Bank. EMI and Forex Monthly installments can be
the easiest form of paying or repaying the loans.
However, the changes in Forex exchange can affect
the EMIs and add to your problems. It is always a
better option to pay through rentals. As an NRI,
you should make sure all your transactions are
trouble-free. Real-estate investments as an NRI
are very profitable investments and also help you
stay connected to your homeland.
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Verifications It is absolutely necessary to do a
mandatory back check of the builders before
proceeding with anything. To do that one can
always inspect their real estate companys social
media accounts or any other online platform. The
direct transaction is highly recommended and try
to avoid all forms of middlemen or brokers to
completely avoid frauds and mishaps. Make a
thorough background check done on the real estate
developers, builders, and whoever is involved in
the property that you are willing to buy. Also,
make sure to have the required documents while
buying any property. The basic essentials include
an Indian passport or Overseas Citizen of India
(OCI) card, PAN card, and power of attorney (POA)
certificate. A buyer in India can also purchase
a property located in India from an NRI seller as
well. But make sure you follow the correct rules
and regulations to avoid conflict and financial
problems. In the case of tax evasion, income tax
authorities have the power to cease the bank
accounts also. Hiring professional experts to
deal with the law is highly essential as real
estate agents sometimes dont have complete
knowledge of the law and regulation.
Buying property in India as an NRI can be
difficult and hard but with the above
information, it can be a little trouble-free.
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