NRI-Section

Fortunately for the NRIs, no special sanction or permission is required to buy property in India. NRIs are also allowed to rent a particular property and send back their rental proceeds to the country they are living in currently. Of course this amount will be subject to payment of taxes.

The real estate sector in India has come a long way from being dominated by a handful of players in the 90s to an expanding base of developers, investors and global stakeholders buoyed by the growing construction industry in the country. The sector has been undergoing corporatisation and professionalism and is recognised as a key sector contributing to the economic development of the country.

An Indian citizen or a foreign citizen of Indian origin who stays abroad for employment/carrying out business or vocation for 182 days or more or under circumstances indicating an intention for an uncertain duration of stay abroad is a Non-Resident Indian (NRI). Those who stay abroad on business visits, for medical treatment, study or such other purposes, which do not indicate an intention to stay there for an indefinite period, are not considered as NRIs.

A Person of Indian Origin (PIO) means a citizen of any country (other than Bangladesh or Pakistan), if:
(a) He/She at any time has held an Indian passport or
(b) He/She or either of his/her parents or grandparents was a citizen of India by virtue of the constitution of India or Citizenship Act, 1955 (57 of 1995) or
(c) He/She is a spouse of an Indian citizen or of a person referred to in (a) or (b) above.

FII means an institution established or incorporated outside India, which proposes to make investments in Indian securities and is registered with SEBI.

Your eligibility is calculated in the same way as it is calculated for resident Indians. More emphasis is laid on the following criteria in the appraisal of a NRI case:

a) Qualifications - the NRI applicant has to be graduate

b) Current job profile & Past experience

c) Probability of continuing abroad for the loan tenure

d) Probability of servicing the loan with an extended tenure in case you have to return to India.

If a person is NRI or PIO, she/he can, without the permission from theReserve Bank, open, hold and maintain the different types of accounts given below with anAuthorized Dealer in India, i.e., a bank authorized to deal in foreign exchange. NRO Savings exchangeaccounts can also be maintained with the Post Offices in India. However, individuals/ entities of .Bangladesh and Pakistan require the prior approval of the Reserve Bank.

According to the regulations of FEMA and RBI, an NRI is permitted to make specific investment in real estate. A NRI is allowed to do the following investments in property:
a.Any immovable property can be purchased by an NRI in India other than any agricultural land, farm house and plantation property.
b. He can get any immovable property as mentioned above by gift from Indian resident, Indian citizen residing outside India or person of Indian origin.
c. Obtain any property by inheritance.
d. He can transfer immovable property to any resident of India by sale.
e. He can transfer any agricultural land, farm house or plantation land to any resident of India by gift.
f. He can also transfer his residential or commercial property by means of gift to any person either residing in India or abroad or person of Indian origin.

Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after May 26, 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final of consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of the Reserve Bank of India within 90 days of the sale of property in Form IPI 8.

NRIs consider financial institutions as an easy option available in India for purchasing any property. At the same time financial institutions consider NRIs as their potential clients. Financial institutions provide home loans easily, efficiently and sooner to such people as they are very much prompt at the time of repayment. Furthermore, the repayment can readily be done by inward remittance through the proper banking channel. If someone is already getting income in India from sources like rent or dividend, he/she can directly repay the loan as well.
Now RBI has also predetermined these norms in home loans for non-residents who are looking forward to buying any property:
1. A maximum of 80 per cent amount is financed by the financial institution. The rest should be given by the NRI.
2. The remittance of the amount for down payment can be done from the place of residence by normal banking channels, i.e., NRO/NRE account in India.
3. The NRI has to repay his principal amount as well as interest part from that similar channel only.

An NRI has to shell out stamp duty as well as registration fees at the time of purchase. He is entitled to avail all sorts of benefits at par with Indian residents on the interest paid for the home loan. However, the tax process becomes full of twists and turns if the property is leased.
As the amount of income received from such action comes under the head of income from property, therefore, standard deduction is applicable as per the standard slab. In this case, the NRI wil l have to pay the applicable tax if he is residing in the country where worldwide income is taxable unless the country has Double Tax Avoidance Agreement with India.
The special advantage for an NRI is the amount which is paid for the interest of home loan is deductible from NRI's taxable income without any upper limit. The NRI is legally responsible for the payment of capital gains tax as prescribed under the Income Tax Act, in case he sells off the property.

Feel Free to Contact us

For more information on our projects call us today.