Real estate is one of the most popular NRI investments in India as it not only gives an attractive return on investment, but also makes them feel that they have tangible assets in their home country. NRIs can buy or own a ia, but they should be aware of legal provisions in the Foreign Exchange Management Act (FEMA) for purchasing the immovable property in India. It is only expected to grow, according to an ASSOCHAM report in 2014. NRI property investment is expected to surge by 35% with interest coming in from NRI property buyers residing in the Middle Est, the US, Singapore, Australia, UK, Canada and South Africa.
Moreover, with many NRI’s wanting in settle in India in the future, NRI Investment in India in Real Estate is witnessing new highs as it not only gives a good return on investment but also gives them a cushion for settling in India.NRIs who want to invest in commercial real estate in India or ask any question related to real estate can schedule a call with the NRI investment expert right away.
Apart from NRI Investment in India in Real Estate, NRI’s are always investing in Fixed Deposits and Shares of Indian Companies as the expected return of these instruments in India is much more as compared to the Western Countries.
Rules for NRI investment in real estate in India
1.NRIs are allowed to purchase any number of immovable property, both residential and commercial, which is neither agricultural land, plantation property nor a farm house.
2.Every property investment will come with stamp duty and registration charges. Apart from these two, property buyers also need to take the service tax into account. This tax depends on the property being purchased. In the case of an under construction property,
3.As per the income tax law, NRIs can own as many properties in India as they want.
4.Payments made for the purchase of property in India by NRI via traveler’s cheque or in foreign currency notes shall be accepted.
5,NRI buyers/ investors can make the payment for the purchase of a property through normal banking channels by way of inward remittances, using the NRE/ NRO accounts.
6. the money that is made through real estate investments is little tougher than either buying or selling them. They require a permission from the Reserve Bank of India to repatriate the sales proceeds. The repatriation should fulfill the conditions that the property was acquired in accordance with foreign exchange law in force at the time of the acquisition.
7. can take loans in Indian Rupee for their property purchases of up to 80% of the property value. The rest has to be funded by the NRIs themselves. The loans however have to be paid back in INR only.
8.You will be taxed at 30% through tax deducted at source (TDS) on rental income, and the remaining amount will be repatriated under the FEMA rules.
9.TDS on sale of property by NRI is applicable at the rate of 20% on the sale proceeds. Cess and surcharge will also be applicable over and above the TDS
10.Payments made for the purchase of property in India by NRI via traveler’s cheque or in foreign currency notes shall be accepted.
NRI Investment in India: Inheritance & Gift of Property
A NRI does not require any permission to acquire any real estate property in India other than agricultural property/farm house/plantation property by way of
Gift from a person resident in India
Inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him.
